Vice President Dr. Bharrat Jagdeo on Thursday clarified that the Government of Guyana (GoG) does not own 50% of ExxonMobil Guyana Limited (EMGL) and, therefore, has no ownership of Exxon’s assets.
Speaking at a press conference, Dr. Jagdeo emphasized that Guyana is entitled only to a specified percentage of the revenues generated from the Stabroek Block. His remarks came in response to a question about whether the State has part-ownership of the two Floating Production Storage and Offloading (FPSO) vessels recently purchased by Exxon from Dutch shipbuilder, SBM Offshore, after leasing them for some time to support its Guyana operations.
“It’s a simple, simple thing. You’re not, you’re not part owner of any company. You don’t own these assets,” Jagdeo said. He outlined that ExxonMobil has to find the capital to develop the resources and Guyana is entitled to the 50% of profit oil.
“The company has these assets. We’re entitled to receive, in the future, 50% of, once everything is paid off. Let’s create a situation, a simple situation, once all the debts, everything is paid off, which will come from the cost oil, you’re entitled to collect 50% of future profits,” Jagdeo said.
Under the Production Sharing Agreement (PSA) governing operations in the Stabroek Block, ExxonMobil and its partners, Hess and CNOOC, are allowed to recover up to 75% of the revenues generated from oil sales as “cost oil.” The remaining 25% is categorized as “profit oil,” which is split evenly between Guyana and the oil companies. Additionally, Guyana receives a 2% royalty from the oil companies’ share.
At a prior press conference, Vice President Dr. Bharrat Jagdeo explained that the cost of the two FPSOs purchased by Exxon will be recovered as cost oil, meaning the expenses will be recouped from revenues generated by the Stabroek Block. However, he clarified on Thursday that this does not mean Guyana is an owner or part owner of the FPSOs.
The Vice President said, “It’s a simple thing. Why do we have to keep explaining this all the time? We don’t own 50% of the company. We have an entitlement as a State to 50% of the revenue. So that is why we’re not, we don’t have to supply any capital to invest. We don’t supply as a country, we don’t, we don’t supply any capital.”
Looking ahead, he said if there is a dissolution of the company and Exxon sells off the assets, “I guess we’re entitled to 50% of the assets in this situation where you dissolve the company. So, I hope that clarifies your question.”
