Durrant Pate/Contributor

Exxon Mobil Guyana is manoeuvring rising global oil prices to fast-track the recovery of all of the remaining exploration, production and other costs in its Stabroek Block this year rather than next year.

In making the announcement, company President Alistair Routledge reports that the current oil price of about US$100 per barrel would allow Exxon Mobil Guyana to “accelerate” cost bank recovery this year, adding, “What we’re now seeing in this price environment is that it will accelerate.”

Addressing a recent news conference, Routledge said, “Now, we don’t forecast oil prices, but if you stay at the current oil price, then it will happen this year, based on the level of expenditure and the production that we anticipate. So that’s a significant acceleration.”

Currently, historic costs remain about US$5 billion out of an estimated US$40 billion cost bank. With Guyana currently producing more than 900,000 barrels per day, Routledge explained that the company began wiping out the accumulated cost bank over the past two years, due mainly to higher production. 

Originally, Exxon Mobil Guyana had anticipated recovering historic costs in 2027, largely because of increasing volumes of production, which are bringing in higher revenues to offset ongoing expenditures, plus recover historic costs. These historic costs date back to 1999 when the contract with Guyana was signed and incurred. 

After the company began operations in 2019, the Exxon Mobil Guyana president said revenue started coming in from 2020, “but at that point, we were still spending faster, and we were generating revenue.” Exxon Mobil reiterates its commitment to spending up to US$60 billion in capital expenditure during the life of its operations in Guyana, in addition to its annual operating expenses of billions of dollars. 

The Exxon Mobil-Guyana government Production Sharing Agreement allows for up to 75 % of gross revenues to be used to recover costs.