Increased oil price, production accelerating ExxonMobil’s cost recovery

Last Updated on Thursday, 19 March 2026, 22:51 by Writer

The rising world oil price and increased production are allowing ExxonMobil Guyana to fast track the recovery of all of the remaining exploration, production and other costs in the Stabroek Block this year rather than next year, company President Alistair Routledge said on Friday.

Currently, historic costs remain at about US$5 billion out of an estimated US$40 billion cost bank.

He said the current oil price of about US$100 per barrel would allow ExxonMobil to “accelerate” cost bank recovery this year.

“What we’re now seeing in this price environment is that will accelerate. Now, we don’t forecast oil prices, but if you stay at the current oil price, then it will happen this year, based on the level of expenditures and the production that we anticipate. So that’s a significant acceleration,” he told a news conference.

According to the top company official, Guyana was currently producing more than 900,000 barrels per day.

Mr Routledge said the company began wiping out the accumulated cost bank over the past two years due mainly to higher production. Originally, the company had anticipated recovering historic costs in 2027, largely because of increasing volumes of production that is bringing in higher revenues to offset the ongoing expenditures plus recover historic costs.

The top ExxonMobil official explained that the historic costs date back to 1999 when the contract with Guyana was signed and were incurred.

After the company began operations in 2019, he said revenue started coming in from 2020 “but at that point, we were still spending faster and we were generating revenue.”

ExxonMobil says it is committed to spending up to US$60 billion in capital expenditure during the life of its operations in Guyana, apart from annual operating expenses amounting to billions of dollars.

The ExxonMobil Guyana government production sharing agreement allows for up to 75 percent of gross revenues for cost recovery.

He said after the historic costs are all recovered, Guyana would earn profit oil greater than the 14.5 percent, including 2 percent royalty.

He could not say what the increased percentage would be as that would depend on the oil price, volume of production and monthly expenditures. “It’s going to be, we will move into a much more dynamic world from the point of view of the amount of revenue the country is receiving, but it is in a positive trajectory,” he said.

Under such circumstances, he said the production sharing contract would encourage as much investment as possible in the Stabroek Block.