Guyana to begin earning more in oil revenue as share in oil block operations increases to 39.8%

Guyana will be raking in billions of dollars more in oil revenues as its share of oil in the Stabroek block has been increased from 12.5% to 39.8%, President Irfaan Ali has said.

This follows the full recovery of the US$55 billion investment by the ExxonMobil-led consortium since 2014.

During a Press Conference yesterday, the President said the Production Sharing formula has remained the same as in the 2016 agreement. However, he noted that ExxonMobil and its co-venturers recovered their investments two years earlier than expected.

“Guyana share of Stabroek Block oil has increased from 12.5% to 39.8%, this is occurred because the cost bank has been recovered two years earlier that expected. In terms of barrels, 75% of every 100 produced went to cost recovery, today, only about 20 barrels go to cost,” the President said.

The President said while the US$55B was paid off, the cost bank is not entirely depleted since there is still operating and other costs, which still form part of the cost recovery.

When that operating cost is recovered, the remainder would be split evenly between Guyana and the companies. Guyana’s share is about 38.9% of every 100 barrels.

Meanwhile, the President said the country’s fifth production vessel is expected to arrive this week and will push the country’s oil output to over one million barrels per day for the first time.

First oil from that vessel is targeted for the last quarter of this year.

“It is the largest FPSO in Guyana’s fleet, designed to add roughly 250,000 barrels per day and push national output to 1 million barrels per day for the first time. Currently, our four operating FPSOs, produce roughly between 900,000 to 920,000 barrels per day,” the President noted.

Meanwhile, the President said consideration is still being given for a local oil refinery in Guyana noting that a refinery will shield Guyana against shocks. He said the refinery can also create path to the establishment of a national oil company.

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