As ExxonMobil celebrates five years of oil production in Guyana
ExxonMobil Guyana is celebrating five years of oil production since the start-up of the Liza Destiny Floating Production Storage and Offloading (FPSO) vessel. In this short span, ExxonMobil’s deepwater developments in Guyana have been hailed as the most successful in the world.
On Wednesday, ExxonMobil Guyana President Mr. Alistair Routledge reflected on the company’s achievements and growing partnership with Guyana. Mr. Routledge emphasized Exxon’s commitment to the country’s development and the importance of collaboration in achieving shared goals.
“We’re focused on capacity building, local content development, and environmental stewardship to ensure the benefits of Guyana’s oil-and-gas production reach every corner of the country,” Routledge stated.
He acknowledged the critical role of ExxonMobil’s co-venturers—Hess and CNOOC—and the Government of Guyana in responsibly developing the country’s natural resources.
Achievements in Deepwater Operations
ExxonMobil’s operations in Guyana have set a global benchmark for success. Three major offshore projects launched on schedule in just five years, and the company is now advancing plans for five additional projects by the end of the decade.
“Working alongside our co-venturers and the Government, we are doing our part to foster a brighter future for all Guyanese. ExxonMobil Guyana proudly celebrates this five-year milestone as a shared achievement, and we look forward to continuing our successful collaboration with the people of Guyana,” Routledge added.
Transformative Impact on Guyana
ExxonMobil highlighted its collaboration with Guyana’s public and private sectors, which has been a driving force behind the country’s rapid transformation. The company noted that 1,700 local Guyanese businesses are part of its supply chain.
“ExxonMobil Guyana is dedicated to enhancing local capacity, and Guyanese businesses and workers play critical roles in its operations. More than 6,000 Guyanese are currently employed in good-paying industry jobs, and ExxonMobil Guyana and its suppliers have invested more than GY $2 trillion to procure goods and services from more than 1,700 local Guyanese businesses,” the company shared.
Through its subsidiary Esso Exploration and Production Guyana Limited (EEPGL), ExxonMobil operates the Stabroek Block with a 45% interest. Hess Guyana Exploration Ltd holds 30%, and CNOOC Petroleum Guyana Limited owns 25%.
Production and Revenue Sharing
The Liza Phase One, Liza Phase Two, and Payara projects produce over 600,000 barrels of oil daily. Three FPSO vessels operate in the Stabroek Block, powering these projects.
ExxonMobil has been in Guyana since 1999, initiating exploration activities in 2008. Under the 2016 Production Sharing Agreement (PSA) signed by the APNU/AFC Government, 75% of gross revenue goes to cost oil, while Guyana receives 14.5% in revenue and royalties, with Exxon retaining 10.5%.
The PPP/C Government has introduced a new PSA model for future contracts. Key changes include lowering the cost recovery ceiling from 75% to 65%, retaining a 50-50 profit-sharing structure, increasing the royalty rate from 2% to 10%, and imposing a 10% corporate tax. Additionally, the model PSA mandates signature bonuses of up to US$20 million for deepwater blocks and US$10 million for shallow-water blocks.
This updated PSA will apply to new oil contracts expected to be signed with companies that were successful in Guyana’s inaugural oil block auction last year.
ExxonMobil’s journey in Guyana is a testament to the potential of strategic partnerships and the transformative power of responsible resource development.
Mr. Alistair Routledge has been a significant contributor to Guyana’s economic growth while demonstrating a strong commitment to its people’s welfare. His support has extended beyond the oil sector to include various organizations in sports and culture, reflecting a holistic approach to national development. His efforts have made a meaningful impact, and it is only fitting to acknowledge his contributions.
Over the past years, Mr. Routledge has proven to be a valuable partner in advancing the nation’s progress and a true asset to Guyana.