Guyana’s share of oil revenues from ExxonMobil’s operations could increase sooner than expected this year if high crude prices persist, the company’s Guyana President Alistair Routledge said Thursday.
Oil prices have climbed above $100 per barrel amid escalating tensions involving the United States, Israel and Iran, boosting earnings from Guyana’s growing output in the Stabroek Block. During a press conference at the company’s Ogle Headquarters, Routledge said the higher price environment could accelerate the recovery of billions of dollars in development costs, allowing a larger portion of production to be classified as profit oil and shared with the government.
Under Guyana’s production sharing agreement, Exxon and its partners, Chevron and CNOOC, can take up to 75% of output to recover costs. The remaining oil is split equally with the government, effectively giving Guyana a 12.5% share of total production, alongside a 2% royalty.
Routledge said the consortium had expected to recover its historical costs, which stand at some US$5 billion, by 2027. But at current oil prices, that timeline could shift forward.
“If you stay at the current oil price, then it will happen this year based on the level of expenditures and the production that we anticipate,” he told reporters.
He said this would lead to a “significant” increase in Guyana’s share of revenues, which currently averages about 14.5% when royalties are included. Guyana would also benefit directly from higher oil prices, which raise the value of each cargo sold.
Routledge said the production sharing framework is working as designed, to encourage heavy upfront investment while allowing the country’s share to grow over time without bearing any of the risk. The Exxon-led Stabroek Block consortium has committed some US$60 billion to develop the resources in Guyana. The company currently produces more than 900,000 barrels per day offshore Guyana.