Cost for Exxon's US$160M Ogle headquarters to be recovered from oil revenues

Days after the APNU+AFC Opposition raised questions about the cost for the massive headquarters being built for ExxonMobil Guyana at Ogle, the oil company today confirmed that the cost of that multi-million US dollar facility will be recovered from the sale of oil, which will impact the total revenue Guyana is likely to earn in the coming years.

The in-country headquarters is expected to cost some US$160 million, and according to President of ExxonMobil Guyana, Alistair Routledge the cost will be recovered as provided for under the Stabroek Block Production Sharing Agreement (PSA).

“It will be the operating centre for the offshore operations. I see the word HQ attached to it, but to me it is not a headquarters. It’s an office that will support the offshore operations like this one does today,” Mr Routledge said.

The official said the “cost recovery mechanism” embedded in the Stabroek Block PSA is pellucidly clear, and existed even under the APNU+AFC government.

Under the terms of the PSA, Guyana is entitled to two per cent of all pre-cost revenues as a royalty and 50 per cent of all profits. However, the agreement provides for as much as 75% of the revenues to go towards cost recovery.

Mr Routledge said Exxon has been in constant communication with the Ministry of Natural Resources about the cost of the facility and the rate of its construction. Noting that it is a fit for purpose facility, Mr Routledge said the project will aid in the better management of the company’s offshore operations in the Stabroek Block.

“It’s not going to be some fancy, lots of glass on the inside [building]. This is a fit for purpose development. The inside would be very functional with all the technology. One floor of one of the buildings will almost entirely be put aside to operate facilities including control rooms, monitoring facilities for the offshore operations connected by fibre optic. So, it’s very much an integral part of the offshore operation,” he said.

Currently, more than 250 persons are operating out of the ExxonMobil Kingston Office, and according to Mr Routledge that number is expected to surpass 500. He said it is important for the staff to operate in an environment that would increase their efficiency.

“We need somewhere that people can work together collaboratively and efficiently, and so that’s what the new office designers intended to do. It’s there solely in order to support the operation that we are running,” he said.

Earlier this week, Opposition Member of Parliament, Ganesh Mahipaul submitted a number of questions to the National Assembly on the construction of the oil company’s headquarter.

He had said that if the cost of the facility is recoverable, Minister of Natural Resources, Vickram Bharrat should inform the House on the real-time monitoring mechanisms that are in place to ensure costing is not overpriced.