ExxonMobil, Hess and CNOOC have managed to recover more than US$10 billion in investments so far, to explore and develop the prolific Stabroek Block.
The Stabroek Block Production Sharing Agreement (PSA) allows the partners to recover investments by taking up to 75% of annual production as ‘cost oil’ barrels.
The recovered expenses for the first three years of production were reported by ExxonMobil Guyana, adding up to approximately US$10 billion. As the Guyana government expects oil exports to generate US$11.3 billion in 2023, it is estimated that recovered expenses this year will be about US$8.5 billion.
By the end of 2023, the total recovered amount is expected to be approximately US$18.5 billion, which is closely equivalent to the development costs of the first three Stabroek Block developments – Liza Phases 1 and 2, and Payara.
The pace at which Stabroek Block investments are being recovered has engaged the attention of the local press and commentators, with some calling for the government to publish cost recovery statements. But Vice President Dr. Bharrat Jagdeo has said this is not in keeping with the norm.
Exxon and its co-venturers are expected to make billions more in investments in the coming years, which would extend the cost recovery period.
The oil major has already started the application process for its sixth development, called Uaru. The co-venturers have also indicated that the Fangtooth discovery could form the basis for their seventh project. They may operate as many as 10 projects simultaneously, each with its own floating production, storage and offloading vessel, in the Stabroek Block.
Additionally, the Environmental Protection Agency recently gave the greenlight for Exxon to embark on a 35-well exploration and appraisal campaign, which is expected to begin this year and conclude in 2027.
