Recovered Stabroek Block expenses exceed US$14 billion at H1, 2023

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Kemol King
Kemol King is an independent journalist with six years of experience in Guyana's media landscape, contributing to OilNOW on a freelance basis. He covers the oil & gas sector and its impact on the country's development.

ExxonMobil, Hess and CNOOC, have reached a significant cost recovery milestone as they develop the immensely lucrative Stabroek Block. As of the first half of 2023, the Stabroek Block partners have successfully recovered over US$14 billion in investments. This has been made possible through a provision of the Stabroek Block Production Sharing Agreement (PSA), which grants the partners the ability to recuperate their investments by claiming up to 75% of annual production as ‘cost oil’ barrels.

In the initial three years of production, ExxonMobil Guyana reported recovered expenses totaling approximately US$10 billion. This figure was further boosted when the Bank of Guyana disclosed that more than US$4 billion had been recovered in the first half of the fourth year, 2023. As the Guyana government anticipates oil exports generating in excess of US$11 billion in 2023, it is projected that recovered expenses for this year alone will exceed an impressive US$8 billion.

The table below offers a concise breakdown of the recovery progress:

YearAmount Recovered (USD)
2020633,410,000
20211,960,740,000
20227,400,000,000
H1, 20234,033,800,000
14,027,950,000

Looking ahead, the trajectory indicates that by the end of 2023, the total amount recovered is expected to surpass US$18 billion. This sum would be roughly equivalent to the development costs incurred for the first three Stabroek Block projects: Liza Phases One and Two, and Payara.

DevelopmentEstimated Cost (USD Billions)
Liza 13.6
Liza 26
Payara9
Yellowtail10
Uaru12.7
Whiptail12.9
Total54.2

ExxonMobil and its partners have injected significant sums into its development projects for the Stabroek block and continue to commit more. Beyond the ongoing developments, exploration and operating costs are expected to add up to billions more in investments, resulting in a hefty cost bank. ExxonMobil has already initiated the application process for its sixth development, known as Whiptail. Furthermore, the partners have indicated their intent to base their seventh project on the Fangtooth discovery. Ambitious vision could see the operation of as many as 10 projects concurrently, each with its dedicated floating production, storage, and offloading (FPSO) vessel within the Stabroek Block.

Additionally, the consortium is determined to unlock further barrels. The recent approval from the Environmental Protection Agency (EPA) for ExxonMobil to commence a 35-well exploration and appraisal campaign in the Stabroek Block, set to run from this year until 2027, represents a significant step in this direction. Moreover, Exxon is awaiting approvals for two 12-well campaigns in the Canje and Kaieteur blocks.

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