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Exxon-led Guyana Group’s 52% Equity Boost Enhances Spill Response Capacity

Strengthened financial position enhances Exxon-led group’s capacity for oil spill management in Guyana.

Exxon-led Guyana Group’s 52% Equity Boost Enhances Spill Response Capacity

The equity of the Guyana affiliates of ExxonMobil, Hess, and CNOOC reached US$18.6 billion by the end of 2023, marking a 52% rise from the previous year’s US$12.2 billion. This significant increase strengthens the group’s ability to handle a potential unmitigated oil spill offshore Guyana.

The assets of the Stabroek Block group surged 44% year-on-year, growing from US$19.4 billion to US$27.9 billion. ExxonMobil, Hess, and CNOOC, which share stakes in the Stabroek Block, are leading this growth. Currently, three projects in this block are producing about 630,000 barrels per day, a figure expected to double by 2027.

While an unmitigated spill is considered unlikely, it would require substantial financial resources to address effectively. ExxonMobil has confirmed its readiness to handle such a situation. During a June meeting with Guyanese reporters, ExxonMobil Guyana Vice President Phil Rietema highlighted the company’s robust financial standing. The 2023 financial statements revealed a US$2.9 billion profit in Guyana for the year, with Exxon’s equity rising by 47%.

In the event of a spill, the group would initially rely on their equity and other liquidity sources, including insurance coverage of US$600 million per incident. Additionally, the group has provided a US$2 billion guarantee to the Guyanese government, which can be activated in case of a disaster. Environmental Protection Agency (EPA) Director Kemraj Parsram noted that this amount serves as a minimum, with the possibility of negotiating further sums to cover excess costs.

Local media has extensively debated the capability to respond to and recover from an unmitigated spill offshore Guyana. To enhance preparedness, Exxon and the government have agreed to bring a capping stack into the country. This equipment arrived in early June and is housed at the Guyana Shore Base Inc. (GYSBI) facility in Houston. The capping stack, one of two in Latin America and 13 worldwide, was built by Trendsetter Engineering and is owned by Oil Spill Response Limited (OSRL).

Guyana is also planning to release a draft of oil spill legislation for public discussion, which will clearly outline liabilities. This legislation will have a broad scope and will not be limited to the oil and gas sector.

Source: https://oilnow.gy/featured/with-52-equity-boost-exxon-led-guyana-group-better-positioned-to-handle-a-spill/

Date: 20 juli 2024

Categories:  Olie- en Gasindustrie, Suriname 

Tags:  CNOOC, EPA, ExxonMobil, Guyana, Guyana Shore Base Inc, Hess, Oil Spill Response, Oil Spill Response Limited, Phil Rietema, Stabroek Block, Trendsetter Engineering, capping stack, environmental protection, equity boost, financial capacity, offshore drilling, oil spill legislation 

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