ExxonMobil to recoup initial costs and increase profits in Guyana

ExxonMobil's joint venture has recovered billions in investment to develop an oilfield in Guyana. The South American nation will receive additional oil money.

Since its discovery in 2015, Guyana's Stabroek Block has been a top asset for the U.S. oil company's portfolio. It is estimated that the block holds at least 11 billion bbls of oil-equivalent. Since its discovery in 2015, Guyana's Stabroek Block has become?one of the top assets in the U.S. oil producer's portfolio. The country now produces more than 900,000.

Exxon, Guyana and their partners were able to take up to 75 percent of the oil produced to cover exploration and development costs.

Exxon's Chief Financial Officer Neil Hansen stated in an interview that the $55 billion invested since 2014 was recouped two years quicker than expected due to the rapid development of this block.

Hansen stated that "We were able to bring these investments in at a pace and price advantage unprecedented,"

The PSC splits the profit oil with Guyana equally after recovering costs. Exxon is now booking about 100,000 less bpd as it enters its third quarter. However, free cash flow will increase to double the level in 2025 by 2030.

Exxon operates the 'Stabroek Block, with a 45% stake. Chevron owns a 30% share in the block, after purchasing Hess Corp., the original partner?in the consortium. Chinese oil firm CNOOC has a 25% stake.

Uaru, the consortium's fifth and sixth projects on the Stabroek block -- Whiptail and Uaru -- should begin oil production in this year and next year.

Guyana's economy, which has a population of 1 million, is still struggling to diversify beyond oil. Many local businesses are flourishing, but residents still struggle with long-term electricity blackouts and an ailing infrastructure. Reporting by Sheila Dang, Houston; Editing and production by Nathan Crooks & Tom Hogue

(source: Reuters)