I refer to Dr. Tara Singh’s KN letter dated 5-19-2023, and captioned ‘Once Capital Costs are recovered by Exxon, the flow of oil money will accelerate!’. While I do not agree with this expectation of higher profits for Guyana, I will nevertheless examine in more detail some of the data Dr. Singh presented, under the assumption that the financial information and oil extraction data are accurate. Dr. Singh wrote that at the end of March 31,2023, the total oil extracted from Liza 1 and Liza 2 was 205,759,098 barrels.Additionally, she noted that the total revenues earned by Guyana from the extracted oil from the 205,759,098 barrels of oil was US$2.238 Billion, consisting of royalties in the amount of US$277 Million and profit oil in the amount of US$1.961 Billion. Given that Guyana received 14.5 percent of the total revenue (2 percent as royalty (R) and 12.5 percent as Profit oil (PO)), this implies that the total revenue (TR) from the sale of the oil is US$15.4 Billion, with EEPGL s
While some of us are engaged in various aspects of the Exxon contract, such as championing the need for adequate insurance/assurance coverage, environmental concerns, and the re-negotiation of the contract for better financial and other terms, my attention was also attracted to the impact of the cost recovery method on Guyana’s share of profit oil. The faster Exxon could recover its Exploration and Development (CAPEX) costs, the sooner Guyana would enjoy a higher share of profit oil, and so too would Exxon. For purpose of this analysis, I have utilized data gathered for Lisa Destiny FPSO Phase I and Lisa Unity FPSO Phase 2. The findings here are only applicable to these two projects.