…dominates oil investments in both upstream, downstream
Guyana has the distinction of being host to the single largest investor in the Caribbean between 2015 and 2022; namely: United States (US) oil giant ExxonMobil, whose US billions of investments in Guyana have dwarfed all other projects.
This is according to the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) in its most recent report, titled Foreign Direct Investment in Latin America and the Caribbean 2023.
The report states that when it comes to the origin of investments and investment announcements in the region, large international oil companies dominate… especially those from the US and France.
Notwithstanding the difficulty in reading trends due to the large sums of capital investments, certain facts stand out. This includes the fact that, between 2015 and 2022, 35 per cent of project announcements in Latin America and the Caribbean were made by United States firms. US firms dominated both in upstream and downstream investments; followed by Spain, France, Bermuda, Italy, Australia and the United Kingdom. When it comes to ExxonMobil, the firm is the largest single investor in the entire region.
“In this regard, the figures are biased by ExxonMobil’s US$10 billion project in Guyana in 2022, making the firm the largest single investor in the entire region between 2015 and 2022. Bermuda is also the fourth largest source of funds in the region.
“The country’s tax framework encourages firms from other origins to register their headquarters in the country. Project announcements originating in the region’s countries represent just 1 per cent of the total originating in Chile, Mexico, and the Plurinational State of Bolivia,” ECLAC said.
ExxonMobil, through its local subsidiary Esso Exploration and Production Guyana Limited (EEPGL), is the operator of the Stabroek Block, and holds 45 per cent interest in the block. Hess Guyana Exploration Ltd holds 30 per cent interest, and CNOOC Petroleum Guyana Limited, a wholly-owned subsidiary of CNOOC Limited, holds the remaining 25 per cent interest.
According to Exxon’s audited financial statements, EEPGL garnered GY$577.7 billion in profits from their local operations last year. Meanwhile, GY$239.7 billion went towards their operating expenses out of a total revenue stream of GY$876.8 billion.
Currently, Liza Phase 1 and Phase 2 developments in the Stabroek Block are operating at a combined gross production capacity of more than 360,000 barrels of oil per day (bpd) using the Liza Destiny and Liza Unity floating, production, storage and offloading (FPSO) vessels respectively. The third development in the Stabroek Block – Payara – is on track to come online by the end of 2023 with a gross production capacity of approximately 220,000 bpd. While this may be the gross production capacity, it is expected that the startup will see a much smaller number of oil barrels being produced. For instance, when Liza Phase Two started in 2022, it was producing significantly less than its current production.
Meanwhile Yellowtail – the fourth development – is slated for 2025 with a production capacity of some 250,000 bpd. Both these development projects have been approved by the Guyana Government. Uaru is the fifth development, and is expected to come online at the end of 2026 with a gross production capacity of approximately 250,000 bpd, with first oil anticipated at the end of 2026. The development plan for Uaru was submitted for Government approval in November 2022, and it has also received project approval.
ExxonMobil has said it anticipates at least six projects offshore Guyana will be online by 2027. Meanwhile, approval is being sought for the sixth oil development in Guyana’s waters. The Environmental Protection Agency (EPA) has been approached for environmental authorization for the Whiptail Project.
