ExxonMobil Contract: Guyana could earn US$300M annually from oil reserves

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By Michael Younge

 After much criticism and public dissatisfaction, the Government today released the controversial petroleum agreement it signed with US oil giant, ExxonMobil as it announced that Guyana could pocket over $80B US dollars over the next few years once commercial operations commence.

Each barrel would be calculated at US$50 and worth some US$160B altogether. This means that Guyana would be receiving US$1M per day and US$300M each year based upon the agreement. This is based on the fact that some 3.2B barrels of oil reserves were discovered in the Stabroek block Liza 1 field.

some of the persons present at the public disclosure event

The revised agreement makes provisions for an increase in the annual rental fee from US$240,000 to US$1 million with training being increased from US$45,000 to US$300,000.

It would see a new allocation of US$300,000 for social and environmental programmes and the payment of a 2% royalty. 75 percent of the earnings would be set aside for cost recovery.

The agreement also reveals that the US$18M signing bonus by ExxonMobil which was paid over to the Government but kept secret and stashed in a special Bank of Guyana account was paid for a 10 year extension of the agreement.

Speaking at a ceremony flanked by State Officials, civil society represents and President David Granger held at Ministry of the Presidency this morning, Natural Resources Minister Rapahel Trotman again defended the agreement and the role his Government played.

Trotman did not directly address concerns over the legality of the decision to hold the monies outside of the Consolidated Fund or other serious criticisms of aspects of the deal.

Meanwhile, ExxonMobil’s Country Manager, Rod Henson said Guyana would earn about US$1.5 billion from the Liza 1 well after a period of five years. He explained that US$7 billion would also be earned over a 20 year period while noting that hat while those figures are guaranteed; they are based on price assumptions.

 

 

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