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A new report suggests that the world’s newest oil exporter, Guyana, lost $55 billion from its deal with Exxon that would allow the oil major to develop its offshore oil resources, according to Bloomberg.
Watchdog Global Witness claims that Guyana is getting 52% of the revenue from the fields in question that the Exxon consortium is developing. However, the watchdog claims, “typical” deals usually offer a much higher percentage to the host country, in the realm of 65%-85%.
Global Witness claimed in its report that Guyana “deserves” a better deal. Guyana, the watchdog alleges, was in a position to negotiate a better deal following Exxon’s initial discovery, but that the government’s “inexperienced” bureaucrats failed to push as hard as they could.
Exxon continues to mention it has continued to operate within the law, both in negotiating the deal and in all aspects of doing business in Guyana.
Exxon has had a particularly rough week, reporting on Friday a 5% earnings slump to $5.69 billion, with earnings per common share falling 6% to $1.33. Exxon’s full-year earnings fell 31%. The grim quarterly results caused Goldman Sachs to downgrade Exxon to “sell”, causing the stock to fall 2.38% to $60.64 per share—from $64.79 on January 30, and from over $70 this time last year.
While its upstream segment and the cash from the sale of its Norway upstream business helped Exxon to weather the weaker crude oil and natural gas prices of 2019, its chemicals and downstream businesses didn’t perform well last quarter.
“Industry fuels margins were significantly lower than third quarter, reflecting seasonally lower demand and increased supply from reduced industry maintenance,” Exxon said, while it also flagged further weakening of chemicals margins from already depressed levels.
Despite the brutal Q4, Exxon continues to announce find after find in offshore Guyana. Its latest announcement increased its estimate of recoverable resources there by another 2 billion barrels of oil equivalent, to 8 billion boe. The oil major has 16 successful finds so far in Guyana.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.