ExxonMobil Guyana Limited alongside its coventurers, Hess and CNOOC, have so far been able to recover about US$19 billion out of the US $29 billion it spent in the prolific Stabroek Block offshore Guyana.
This is according to the ExxonMobil Guyana President Alistair Routledge who spoke at a press conference earlier this week.
“On a total basis, we’ve invested US$29 billion in Guyana,” Routledge said.
This sum includes capital spending which comprises purchasing the equipment needed for oil production, and day-to-day operating expenses.
And he added, “(of that US$29 billion), we’ve recovered US$19 billion to date since startup operations in 2019.”
Though there is about US$10 million left to recover, ExxonMobil and its coventurers are still investing in new projects, namely the Yellowtail, Uaru and Whiptail projects. So those costs will have to be recovered eventually too.
Nevertheless, Routledge noted that as ExxonMobil and its coventurers recover more of their costs overtime, the money Guyana gets should significantly increase.
This is so because of the cost-recovery mechanism in place. Guyana started to produce oil in December 2019. Through oil production, the country is involved in a revenue-sharing mechanism with ExxonMobil, Hess and CNOOC.
As per Guyana’s 2016 oil contract, up to 75% of the costs (or money invested) can be recovered or recouped as the oil produced is sold.
The remaining 25% of revenues is split equally between the companies and the government; the government also gets an additional two per cent in royalties from total revenues.
Since ExxonMobil, Hess and CNOOC are co-venturers in the Stabroek prolific block, they share the costs and profits based on their varying stakes in the projects.
Exxon has a 45% stake; Hess, 30% and CNOOC, 25%.
My kindergarten grand kids could easily do the maths: $29 Billion US invested, recovered $19 Billion US, that leaves $10 Million US ??????