I had absolutely no intention of diverting public attention to a group of retired seniors associated with an entity called the Oil and Gas Governance Network (OGGN). But it is painful having to read this sort of nonsensical analysis almost every day in the mainstream media, where they are given endless space to propagate a series of catastrophically flawed interpretations of Guyana’s oil and gas fiscal outcomes.
My response is specifically to address their recent critique of a statement made by ExxonMobil Guyana’s Country Manager, who correctly asserted that the company remains in a negative position on its investment in Guyana. OGGN took issue with this claim and sought to disprove it by pointing to the reported profits of the oil companies.
The analytical flaw lies in the failure to contextualise the argument within the comprehensive investment commitments undertaken by the oil companies in the Stabroek Block and the economic fundamentals underpinning the project. A robust analysis must incorporate these dimensions to accurately assess the viability and implications of the sector.
Towards this end, the total committed investment in the Guyana market – specifically in the Stabroek Block, which to date contains proven reserves of approximately 11 billion barrels of crude oil – amounts to about US $65 billion. As of 2024, the book value of the oil companies’ asset base in the Stabroek Block stands at US $34 billion, representing roughly 52 per cent of the total committed investment.
This means that the consortium still has US $31 billion in additional investment yet to be realised on future projects within the Block, based on the proven reserves. Consequently, from a financial standpoint, the companies are still in a net negative position of approximately US $31 billion, or 48 per cent of total committed investment.
It is that simple.
Conclusion
When OGGN focuses narrowly on reported profits without understanding the broader investment and capital recovery structure, it produces analyses that are not merely incomplete – they are misleading. The oil companies’ balance sheet position must be viewed through the lens of total project economics, where cumulative investment, capital depreciation, and future development obligations define profitability. Until the total committed investment is recovered and returns are realised beyond that threshold, the assertion that the consortium remains in a negative position is not only correct but financially irrefutable.