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“Guyana’s Stabroek Block is a once-in-a-lifetime world-class asset” – ExxonMobil Vice President
Stabroek Street District
Kaieteur News – Phillip Reitema, Vice President and Business Services Manager, ExxonMobil Guyana Limited (EMGL), highlights the unique value of the Stabroek Block located offshore Guyana.
ExxonMobil Guyana is the operator of the Stabroek Block with a 45% interest, Hess Guyana Exploration Ltd. has a 30% interest, and China National Offshore Oil Corporation (CNOOC) Petroleum Guyana Ltd. has a 25% interest. Guyana has one of the fastest growing economies in the world thanks to its offshore oil production.
In a recent interview with Energy Perspectives, Reitema was asked how the Stabroek block compares to other projects in ExxonMobil’s portfolio. “Is there any project that can compare to it in terms of return on investment?” he was asked.
Retma responded by saying Exxon has a very special opportunity in Guyana. He also said the Stabroek block provides “a unique opportunity for Exxon and all of us in our industry to have a truly special impact on this country.”
Retma, who has been working in Guyana for the past two years, said the country was “truly the opportunity of a lifetime” when he explained why he came to Guyana.
Phillip Reitema, Vice President and Business Services Manager, ExxonMobil Guyana Limited (EMGL)
He explained that while the Stabroek development was unique, there were other successful projects in the oil and gas industry, but noted that some projects might not be able to ramp up production as quickly as ExxonMobil’s Stabroek development.
“Guyana does have world-class assets, world-class revenues, and is in a good growth cycle, and the country has a small population,” said the ExxonMobil vice president.
Furthermore, he explained that the Guyana projects are internationally competitive. “They are among the best deepwater projects in the world and we are very proud of them. I know our chairman has said something like this: We expect the Guyana project that we are doing in Stabroek to be one of the greatest deepwater projects in the history of the industry,” he added.
June 2024 will mark ExxonMobil’s 25th year in Guyana. Reflecting on the company’s journey, Retma explained that the company has three projects producing oil in the Stabroek Block since the first discovery in 2015. He added: “Today we produce over 600,000 barrels of oil per day, and the oil produced is revenue, which will be shared by the people of Guyana and our shareholders.”
“… and then we have three projects in development, Yellowtail, Uaru and Whiptail,” Reitema noted. By the end of 2027, ExxonMobil’s production capacity is expected to exceed 1.3 million bpd.
The Production Sharing Agreement (PSA) signed between Guyana and ExxonMobil in 2016 is the subject of ongoing debate. The agreement was signed with ExxonMobil in 2016 by former Natural Resources Minister Raphael Trotman, who served in the APNU+AFC coalition government from 2015 to 2020. The agreement signed by Trotman exempted oil companies from all taxes, gave Guyana a 2% royalty on abundant resources, and agreed that oil companies would recover 75% of their investment and then share the remaining 25%, with Guyana receiving 12.5%. Due to the lack of earmarked protection, under the arrangement, Guyana would pay for projects that have not yet started production activities. Every month, bills for future production development projects are added to the list of expenses that ExxonMobil is expected to recover costs.
Additionally, a battle among oil majors is currently underway between ExxonMobil Corp. and Chevron Corp. for the Stabroek Block to determine who will go down in history as a participant in the industry’s most successful deepwater development.
Hess has agreed to sell all of the company’s shares to Chevron for $53 billion. The deal gives Chevron access to the Stabroek block. As a result, ExxonMobil and CNOOC filed for arbitration because the oil giant believes it has a preemptive right, which allows shareholders to acquire shares before they are sold to others.
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