Declaring a staggering $132B profit for the fiscal year 2021, ExxonMobil’s local affiliate Esso Exploration and Production Guyana Limited (EEPGL) yesterday said that it was the first it had made since it entered this country 23 years ago.
However, the company was quick to point out that the sum invested since that time is over $3 Trillion with $1.3 Trillion coming from its own coffers, and the overall sum doubling by 2025.
“What you will see in the financial statements is that we generated $254B of revenue and $132B of profit in 2021. This was the first year since our inception in 1999, that we generated profit in Guyana, underscoring the complexity of our business and the years of investment required before payoff,” Vice President and Business Services Manager, Phillip Rietema yesterday told media personnel at the company’s Duke Street Head Office.
“We continue to invest greater than the returns we receive and expect to do so for many years,” Rietema also noted.
EEPGL and its partners, Hess and CNOOC can reclaim up to 75% of oil revenues each year to cover their production and other costs.
All monies on the financial statements are quoted in Guyana dollars. This is the first time that EEPGL has ever publicly presented its financials.
Just for comparison sake, EEPGL’s profit for 2021 is 23.8% of the entire budget for Guyana this year. The company’s profit will heighten entrenched concerns that Guyana gave away far more than it should in the 2016 Production Sharing Agreement.
Rietema explained that EEPGL recently registered its 2021 financial statements with the Deeds Registry, in line with regulatory requirements and it was audited by TSD Lal & CO Chartered Accountants of Lot 77 Brickdam, Georgetown.
Those documents should be accessible to the public by next week.
“We have audited the financial statements of Esso Exploration and Production Guyana Limited (Guyana branch)…in our opinion, the financial statements present fairly, in all material respects, the financial position of EEPGL as at 31st December 2021, and its financial performance and its cash flows for the year then ended in accordance with international financial reporting standards,” TSD Lal & Co states.
Overall, expenses increased from 2020, in line with production.
The financials revealed that EEPGL’s revenue in 2020 was $75.4B compared to last year’s $254.1B.
In terms of expenditures, exploration in the Stabroek Block last year racked up $26 billion as compared to $18 billion in 2020. Production costs last year were $26.2B whereas it was only $10.3B in 2020.
Depreciation and amortization sums were respectively $23B in 2020 and $38B in 2021.
With only one oil production platform operating at the end of last year, EEPGL’s lease expenses, relating to the first production vessel, the Liza Destiny stood at $6.6 billion, down from $7.7 billion in 2020.
Administrative expenses, which include payment of salaries for 89 locals and overall 183 employees of the company, stood at $20.8B in 2020 and this figure dropped to $17.7B last year.
Royalty record
And given that under the 2016 Production Sharing Agreement royalty sums are deducted from Exxon and Stabroek Block partners Hess’ and CNOOC’s share of 12.5% profits, the sums reflected on the statement of profit and loss showed $2B in 2020 and $5.8B in 2021.
The company yesterday emphasized that the royalty regime here significantly benefits Guyana, as per the contract, since it comes out of its portion of profits, unlike the view that those monies are deducted before or during cost oil deductions. He explained using an example of the monies made at the end of a fiscal year being $100.
Guyana ends up with $14.50 of $25 and the partners $10.50 because the 2% royalty comes from EEPGL’s and the partners’ share of profits. “It is not subtracted at the beginning, not from cost oil,” the company contended.
And while continuous exploration and direct future investments plans make it difficult to give an exact time frame for when cost oil sums will be cleared, company officials estimate that by the next decade it should stabilize, even as cost oil sums decrease annually.
Balance sheet
EEPGL’s Balance sheet which includes assets, liabilities, and the company’s equity shows that non-current assets grew last year from $917B in 2020 to $1.2T last year. Property, plant and equipment accounted for the bulk of those sums with $866B in 2020 and $1.2T in 2021.
In the area of current assets, the sums reported were $53B in 2020 and $36B in 2021.
It is to this end that the company’s Total Assets stood at $971.4B in 2020 and $1.2T, which is the same that will be reflected in the balance sheet for its total equity and liabilities.
