For the first time in the more-than-20 years since ExxonMobil, through its subsidiary Esso Exploration and Production Guyana Limited (EEPGL), began operating in Guyana, the company has registered a profit in its Guyana operations – to the tune of Gy$132 billion.
According to the company in its Statement of Profit or Loss and Other Comprehensive Income, its 2021 revenue increased to $254 billion, while its profits came in at $132 billion. This, according to the company, reflects higher production volumes and higher oil prices.
EEPGL’s share of royalty expenses when it comes to production in the Stabroek block has been pegged at $5.8 billion, an increase of 184 percent versus 2020. Its overall expenses were also up versus 2020. This has been attributed to increased production costs and higher depreciation, both of which were driven by increased oil production.
“Lease expenses were primarily related to the Destiny FPSO lease, and were down 15 percent versus 2020. There is no other debt financing for EEPGL… In the Statement of Financial Position, at year-end 2021, assets totalled $1.3 trillion, an increase of 30 percent versus prior year, (and) mostly reflecting substantial incremental investments in the Stabroek block,” a fact sheet on the company’s 2021 figures stated.
“EEPGL’s equity increased 25 percent versus year-end 2020, driven by earnings and additional equity contributions. This underscores EEPGL’s strong financial position to meet its ongoing obligations to the Government and people of Guyana.”
According to EEPGL Vice President and Business Services Manager Phillip Rietema, the length of time it took EEPGL to turn a profit exemplifies the level of investment that must be made in such operations before seeing a return. He also gave a breakdown of the money Exxon has invested in its Guyana’s operations so far, and also plans to invest.
“This was the first year since our inception in 1999 that we have generated a profit in Guyana, underscoring the complexities of our business and the years of investment required before payment,” he said.
“Our total investments to date total Gy$1.3 trillion. With our partners, its over Gy$3 trillion. And the plans we have in place out to 2025 will take investments north of Gy$6 trillion. In our Statement of Financial Position, you’ll see these assets reflected in Property Planning and Equipment.”
Rietema further explained that the company’s equity has increased by 25 per cent to Gy$875 billion, driven by the company’s profitability and also investments from parent companies. The Vice President also emphasised the importance of Guyana to Exxon.
“To ExxonMobil, I can say it’s an extremely important affiliate to us. It’s the place where we’re making some of our largest investments, and we continue to plan for significantly more investments. As I pointed out, we’ve already invested $1.3 trillion. We see that growing, along with our partners, to over $6 trillion, and that’s just for the four projects,” he has said.
ExxonMobil has said it anticipates at least six projects offshore Guyana will be online by 2027, with developmental drilling having been recently started on the second one, the Liza Phase 2 project. Production has already started in the second phase, with the Liza Utility floating, production, storage and offloading (FPSO) vessel in operation.
The third project –the Payara Development – will meanwhile target an estimated resource base of about 600 million oil-equivalent barrels, and was at one point considered to be the largest single planned investment in the history of Guyana.
Meanwhile, the Yellowtail development, which will be oil giant ExxonMobil’s fourth development in Guyana’s waters, will turn out to be the single largest development so far in terms of barrels per day of oil, with a mammoth 250,000 bpd targeted.
The oil rich Stabroek Block is 6.6 million acres (26,800 square kilometres). Exxon, through subsidiary EEPGL, is the operator and holds 45 per cent interest in the Block. Hess Guyana Exploration Ltd holds 30 per cent interest, and CNOOC Petroleum Guyana Limited, a wholly-owned subsidiary of CNOOC Limited, holds the remaining 25 per cent interest.