• 5 minutes Covid-19 logarithmic growth
  • 8 minutes Why Trump Is Right to Re-Open the Economy
  • 12 minutes Charts of COVID-19 Fatality Rate by Age and Sex
  • 14 minutes China Takes Axe To Alternative Energy Funding, Slashing Subsidies For Solar And Wind
  • 5 hours Which producers will shut in first?
  • 8 hours The Most Annoying Person You Have Encountered During Lockdown
  • 1 hour Its going to be an oil bloodbath
  • 1 day We are witnesses to the end of the petroleum age
  • 5 hours Russia's Rosneft Oil Company announces termination of its activity in Venezuela
  • 24 mins How to Create a Pandemic
  • 7 hours Saudi Aramco struggling to raise money for this year's dividend of $75 billion. Now trying to sell their pipelines for $10 billion.
  • 7 hours Saudi Arabia Can't Endure $30 Oil For Long
  • 14 hours Wastewater Infrastructure Needs
  • 3 hours KSA taking Missiles from ?
  • 1 day A New Solar-Panel Plant Could Have Capacity to Meet Half of Global Demand
  • 1 day >>The falling of the Persian Gulf oil empires is near <<

‘’Guyana Lost $55 Billion On Oil Deal with Exxon’’

Oil rig

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

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage




Leave a comment
  • Bennett Williams on February 04 2020 said:
    Actually, the Guyana terms are what you would expect for a rank frontier province that had absolutely no oil production. The element missing from the 'analysis' is the risk profile, and there is an inverse relationship between the risk & prospectivity of a province and the level of government take.
  • Dan Pearson on February 04 2020 said:
    Watchdog Global Witness claims are totally hollow and without merit nor context. Guyana had no oil and their country had been explored extensively offshore and onshore without any commercial success.

    Guyana was a very high risk expensive deep water challenge that no one wanted to take on until Exxon took a very high risk to explore for oil where many wells had been drilled but plugged as dry holes.

    Guyana would have no oil production if Exxon & their JV partners had not put up the very expensive risky effort to find oil in a country that had no oil production and no oil infrastructure in place if any oil was ever found. Now after the risky high cost offshore deep water success has found oil there are many jobs for Guyana's talented Exxon trained citizens.

    Exxon even provided a University structure to allow the technical training of these Guyana citizens so they could/can work to produce the risky very expensive oil that Exxon & JV partners were willing to explore for and discover in a region that had no oil, and Exxon made sure this newly discovered oil was brought online faster than any other offshore deep water production in the world in 4 years time.

    Watchdog Global Witness needs to put some perspective in their claims because they are only out to stir the pot for their own media benefits. If they were reputable there would be some history included in their reports to let readers understand why there was no oil in Guyana and how much expense and huge risk was taken to find oil where many had tried to find it but no one could.

    Watchdog - Put some perspective in your report, any amount of perspective.
  • Mamdouh Salameh on February 04 2020 said:
    If this is proven the case, then it will be a case of a global oil giant like ExxonMobil taking advantage of an inexperienced government of a small country like Guyana to gain the upper hand reminiscent of the old imperialism displaying the ugly face of capitalism.

    Guyana should demand a renegotiation of the oil deal with ExxonMobil aiming for a far bigger share than the 52% it got for its offshore oil resources. Its share should range from 75%-80% after allowing ExxonMobil to recoup its exploration and production costs.

    If ExxonMobil refuses to accept, then Guyana’s government should apply for an independent arbitration. If this proves unsatisfactory, then it could cancel the deal with Exxon altogether and negotiate a fairer deal with another major oil company including Russian and Chinese majors.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News