Oil revenues generated by ExxonMobil and partners from the Stabroek Block have not yet matched the major investments they have made into exploring for crude and developing those fields. The companies have sanctioned more than US$40 billion in projects offshore Guyana, with that total expected to surpass US$50 billion when the next project is sanctioned in 2024.
In development costs, ExxonMobil and its partners have poured US$3.6 billion into Liza-1, US$6 billion in Liza-2, US$9 billion in Payara, US$10 billion in Yellowtail, and recently earmarked US$12.7 billion for the approved Uaru project. This staggering amount surpasses $40 billion and doesn’t even consider additional recoverable costs, such as pre-contract expenses, exploration endeavors, operational costs, and necessary onshore investments like the operations centre under construction at Ogle, on the East Coast of the Demerara River.
When these expenses are juxtaposed with the revenues, the Stabroek Block yielded US$1.06 billion in 2020, US$2.98 billion in 2021, US$9.98 billion in 2022, and anticipates a total of US$11.33 billion in 2023, according to the Ministry of Finance. These earnings, amounting to about US$25 billion, paint a clear picture – the revenues have yet to cover the total investment. Furthermore, the Guyana government receives approximately 14.5% of these revenues.
ExxonMobil’s ventures don’t stop here. They are eyeing the sixth project, Whiptail, which demands an estimated investment of US$12.9 billion. Pending governmental approval in 2024, this will further add to the investment pile. Moreover, a seventh project named Fangtooth is under consideration, and the potential exists for up to ten offshore projects.
The advantage is that as more simultaneous offshore projects results in an increase in annual revenues, a quicker recovery of investments is facilitated. The 75% cost recovery ceiling, stated in the Stabroek Block Production Sharing Agreement, permits this. While this high ceiling has been a point of contention among critics, the companies see it as an investment incentive.
ExxonMobil is the operator of the Stabroek Block offshore Guyana, with a 45% stake. Hess (30%) and CNOOC (25%) are its partners.
