ExxonMobil on Tuesday declared a US$56 billion net profit for 2022 as Guyana continues to feature as its premium investment and the company boasted of its excellent relationship with the government here and it expects to bring its third oil platform earlier than anticipated.
“We’re making really good progress. As we’ve said, we brought Liza 2 in ahead of schedule. We anticipate bringing Payara in ahead of schedule. We brought Liza 2 up very well, brought that online quickly, and began producing at above-nameplate capacity in the fourth quarter. And so, I feel really good about the quality of those projects and the operational ability to bring those up and run them effectively, making good progress there. We’ve got Yellowtail in for government approval. I expect that to be a bigger FPSO,” Company Chairman Darren Woods told a fourth quarter 2022 Earnings Call.
After giving an overview of the company’s finances and balance sheet for the quarter where it registered earnings of US$12.8 billion, or US$3.09 per share assuming dilution, resulting in full-year earnings of US$55.7 billion, or US$13.26 per share assuming dilution, questions were asked about Guyana.
Woods was asked by Wells Fargo Securities’ analyst Roger Read for an update on this country. “I know things are going well there, from a development standpoint, but I was just hoping you could address anything on the resource side and any update at all from a political side. There’s been a little noise out there on that end,” Read requested.
Win-win-win proposition
Woods said that the company’s position has always been one of having a “win-win-win proposition” across the board, as there “needs to be a win for the company. It needs to be a win for the Government of Guyana, and it needs to be a win for the people of Guyana.”
“And that’s what we’re seeing there, a lot of jobs, a lot of economic opportunity opening up in Guyana. We just — we’ve been working with the Guyanese government around a project to bring in gas power into the country. Lower emissions, more reliable. We’ve got work going on to help bring up some of the other social services in the country,” he said.
“So, I think people are seeing the progress. And the fact that we’re bringing this on sooner and at lower cost, I think, is a benefit to the government. They recognize the values coming faster than originally anticipated. So, it’s a — I think it’s a good story of the government, I think in ExxonMobil. We’ve got very good relationships, working very constructively. And, as I said, it’s a win-win-win proposition here, and we feel good about the progress we’re making,” he added.
Overall, he said that the company was ahead of schedule and ahead of the expectations that it has talked about, historically, with Guyana.
“The resource base, as you know, continues to grow. We continue to make discoveries. We continue to really optimize around those discoveries. And that’s a really big part of developing these projects …as we are in parallel to developing projects, continuing the exploration and continuing to better quantify and qualify that resource base is making sure that our projects are optimized around that. So, there’s a balance that we’re striking around how best to optimize, and feel good about what we’re doing there. And, frankly, I think the government feels really good about what we’re doing there. Importantly, the development of that resource and the value associated with that is manifesting itself in country, which is a really important part of the equation here,” Woods noted.
Needed it most
Guyana, Woods said, allows the company to continue to strengthen its industry-leading portfolio and increase production from the “high-return advantaged assets” here “at a time when the world needed it most”.
Here and at its Permian Basin projects in the southwest of the US, ExxonMobil said that it increased year-over-year production by over 30%.
Guyana’s outlook has been played up by all the partners in the offshore Stabroek Block, with Hess Corporation (Hess), last week announcing that this country along with North Dakota’s Bakken (USA) area will see some 80% of its US$3.7 billion capital projects spending committed to them.
Hess’s Chief Operating Officer, Greg Hill, had pointed out that the company, which has a 30% interest in the Stabroek Block, believes that the partnership “delivered exceptional facilities for liability, project delivery and exploration success in 2022.”
Hess reported a net income of US$624 million, up from US$265 million for the same period in 2021.
Guyana’s prospects were played up at that meeting, with its President John Hess, informing that its “financial priorities are to continue to allocate capital to our high-return low cost investment opportunities, to keep a strong cash position and balance sheet, and to grow our dividend and as market conditions and our return of capital framework provide to increase share repurchases.”
The Stabroek Block is 6.6 million acres (26,800 square kilometers). ExxonMobil affiliate Esso Exploration and Production Guyana Limited is operator and holds 45 per cent interest in the Stabroek Block. Hess Guyana Exploration Ltd. holds 30 per cent interest and CNOOC Petroleum Guyana Limited, a wholly-owned subsidiary of CNOOC Limited, holds 25 per cent interest.
The Production Sharing Agreement for the block allocates up to 75% of oil production to cost oil and the remaining 25% as profit which is split evenly between government and the partners.
