…amid growing calls from Guyanese for changes to the contract
(Kaieteur News) – Less than seven years after first oil, ExxonMobil and its Stabroek Block partners have produced the billionth barrel of crude from Guyana, marking another major milestone in the country’s rapidly expanding petroleum industry.
ExxonMobil said the milestone underscores the speed at which Guyana has emerged as a significant global energy producer since production began at the Liza field in December 2019. But while the company is celebrating the scale and pace of the achievement, the billion-barrel mark also comes as Guyanese continue to demand a change to the 2016 Production Sharing Agreement that exempts ExxonMobil from paying taxes, no ring-fencing provision, a 2% royalty among other lopsided terms.
ExxonMobil said the milestone underscores the speed at which Guyana has emerged as a significant global energy producer.
In a press statement Exxon said the journey from discovery to the billionth barrel has taken less than a decade. The company and its co-venturers made their first major discovery in the Stabroek Block just over a decade ago, while first oil followed in less than five years, one of the fastest deepwater development timelines in the industry. Production has since expanded from a single offshore development to four major projects, supported by the Liza Destiny, Liza Unity, Prosperity and ONE GUYANA floating production, storage and offloading vessels.
The developments have pushed installed production capacity beyond 900,000 barrels per day, transforming Guyana into one of the world’s fastest-growing oil-producing jurisdictions. The Uaru project is expected to come on stream by the end of 2026, while construction is underway on the sixth and seventh approved developments, Whiptail and Hammerhead. Whiptail is targeted for startup in 2027, with Hammerhead expected to begin production in 2029. Exxon estimates that the Stabroek Block contains just under 11 billion barrels of oil-equivalent resources, with plans for as many as eight offshore developments by 2030. The company said Guyana’s growing production is helping supply energy markets in the Americas, Europe and Asia.
The other side of the barrel
The billion-barrel milestone, however, comes against a backdrop of intense national debate over Guyana’s petroleum agreement with Exxon and its partners, particularly the distribution of revenues and the pace at which production is taking place. The original 2016 Production Sharing Agreement provides for a 2 per cent royalty and a 50-50 split of profit oil after allowable costs, while the contractor can recover up to 75 per cent of production in a given month for its cost bank.
As Exxon moves deeper into production, Guyana’s share of the proceeds has become a central issue in public discussions over the country’s oil wealth. The company has maintained that the Stabroek developments represent a major economic opportunity for Guyana and that its investments have helped establish an entirely new offshore industry. The Government has also pointed to rising oil revenues and increased public spending made possible by petroleum production.
At the same time, critics have questioned the terms under which the resource is being exploited, including cost recovery, the absence of ring-fencing across projects and the extent to which Guyana can maximise its take as additional developments are approved.
Local participation
In the area of local content, Exxon said thousands of Guyanese employees, contractors and suppliers have contributed to the development of the industry, with local workers and businesses now playing an increasingly important role in offshore operations and project development. The company also highlighted investments outside the oil fields, including workforce development, supplier development and a US$100 million initiative aimed at strengthening STEM education among Guyanese students. Exxon said the milestone reflects collaboration among the company, its co-venturers, the Government, local communities, workers and suppliers.
Source: Kaieteur News
