The combined equity of the Guyana affiliates of ExxonMobil, Hess and CNOOC was US$18.6 billion at the end of 2023. This is a 52% increase from US$12.2 billion in the prior year, boosting the group’s capacity to respond to an unmitigated oil spill offshore Guyana.
Altogether, the Stabroek Block group’s combined assets jumped 44% year-on-year. It Increased from US$19.4 billion to US$27.9 billion.
The three companies, led by Exxon, share stakes in the Stabroek Block. Three projects therein are currently producing approximately 630,000 barrels per day (b/d), set to double by 2027.
An unmitigated spill is unlikely, but in such an event, substantial financial wherewithal would be required to mount an effective response. Exxon has assured that it is up to the task.
ExxonMobil Guyana Vice President Phil Rietema underscored the company’s strong financial position during a meeting with Guyanese reporters in June. The financial statements for 2023 showed the company earned a US$2.9 billion profit in Guyana for 2023, and saw its own equity jump 47%.
The group would rely first on their equity and other sources of liquidity to respond to a spill. This includes insurance coverage of US$600 million per occurrence.
Should this all not be enough, the group has provided a US$2 billion guarantee to the government to activate if there is a disaster. Kemraj Parsram, Director of the Environmental Protection Agency (EPA), has said this amount represents a floor and that additional sums can be negotiated to fulfill excess costs.
There has been rigorous local media discourse over the years about the capability to respond to and recover from an unmitigated spill offshore Guyana. The government and Exxon agreed to have a capping stack constructed and brought in-country to boost preparedness.
The capping stack equipment arrived early June and sits at the Guyana Shore Base Inc. (GYSBI) facility at Houston. Exxon said the capping stack is one of two in Latin America, and 13 in the world. It was built by Trendsetter Engineering and is owned by Oil Spill Response Limited (OSRL).
Guyana is also preparing to publish a draft of oil spill legislation for public debate, to clearly outline liabilities. The legislation is expected to have a broad scope, not consigned to the oil and gas sector.
