Kaieteur News- In 2024, Guyana received a hefty bill of US$120M for exploration costs racked up by ExxonMobil and its Co-Venturers, Hess and CNOOC.
This was revealed in the 2024 Annual Report for American oil company, Hess Corporation. According to financial information contained in the document, exploration expenses, including dry holes and lease impairment for Guyana, amounted to US$36M in 2024.
Hess Guyana Exploration Ltd., a subsidiary of Hess Corporation, holds a 30% interest in the Stabroek Block. Meanwhile, ExxonMobil Guyana Limited (EMGL), the operator of the block, holds a 45% interest and CNOOC a 25% interest.
It could therefore be deduced that with its 25% share, CNOOC contributed US$30M to the exploration bill and EMGL another US$54M with its 45% share. As such, Guyana received a bill of US$120M for exploration costs in 2024 from the Stabroek Block partners.
Last year, ExxonMobil drilled eight exploration and appraisal wells successfully, which encountered hydrocarbons. In addition to the successful wells, Hess, in its Annual Report, said the operator encountered “one unsuccessful exploration well for which the well costs were expensed.”
In 2024, ExxonMobil was required to relinquish a 20% portion of the block, following a one-year extension that was approved by the former David Granger administration in 2020.
Kaieteur News understands that the process is yet to be completed.
EMGL was granted a one-year extension to continue exploring the Stabroek Block in 2020 after it complained that its exploration programme was affected by the COVID-19 Pandemic.
Financial statements for the company and Co-Venturers, however, revealed that the company racked up an exploration bill of $20B or US$100M during that same period.
Vice President Bharrat Jagdeo was therefore asked to explain why the country received such a huge bill for exploration when Exxon claimed it could not work due to the pandemic.
In granting the one-year extension to ExxonMobil, the former Head of State ordered that the licensee/operator shall present updated work plans detailing mitigation efforts, revised schedules, planned milestones and other information as requested by government.
The new government later said it was satisfied that the conditions were met to justify the extension. The PPP, however, refused to share reports detailing how the operator was affected during the pandemic.
Costs justified
Jagdeo explained, “President Granger in, I think August 2020, just before he left, he gave an extension. That document said that they would get the extension, but submit documents to us. So it happened before we assumed office. We then asked them to submit the original exploration plan and how it was affected, and they proved to the satisfaction of the Ministry that there was a departure from the original exploration plan.”
The Vice President therefore reasoned that this explains why exploration costs were recorded on the Stabroek Block partners’ financial statements.
According to him, “They did do some exploration but it was a more aggressive exploration plan. There was a departure and that is why the extension was given, but it was given before (we took office), but we concurred with it, that’s why we didn’t make an issue.”
Essential service
The Alliance For Change (AFC) previously presented documents indicating that Exxon’s operations was gazetted as an essential service during the pandemic, therefore permitting oil and gas operations to continue unhindered.
The government, however, maintains that it does not need to provide evidence to justify the extension it endorsed, allowing the company to continue exploring the oil-rich block.
Original link posted by Kaieteur News on April 13, 2025.
