Upon examining the latest financial reports of ExxonMobil, Hess Corporation and CNOOC/NEXEN, economist, Professor Clive Thomas, says he is convinced that Guyana remains essential to the future profitability of the Stabroek Block partners.

With respect to ExxonMobil which is the Operator of the block, Professor Thomas noted in his recently published writings that the American oil giant was forced to make significant cuts to its budget. The economist said ExxonMobil cut its global capital expenditure budget by 30 percent and its cash operating expenditure budget by 15 percent. This is in response to a share price decline in the first quarter of 2020 of 14 cents, compared to a gain of 55 cents per share in the first quarter of 2019. Further, the company recorded its first quarterly deficit, in over three decades.

As for the parent companies of the two other partners, the economist said both have fared similarly while noting that they continue to indicate the prioritization of Guyana’s offshore discoveries in their future profitability. In providing more detail on this front, Professor Thomas noted that Hess has cut its capital and exploration budget going forward by nearly 40 percent, while noting that it has taken a US$1 billion three-year term loan, but intends to maintain spending on its profitable priorities in the Bakken and Guyana. Similarly, CNOOC is cutting its capital expenditure by about 10 to 15 percent for 2020, after coming off an “excellent year” in 2019 but also prioritizes its Guyana holdings, going forward.

To date, the Stabroek Block has seen 16 discoveries. The 16th discovery, Uaru, has not yet been added to its calculation of recoverable resources. However, 15 discoveries at December 31, 2019 have estimated recoverable resources of at least 8 billion barrels of oil equivalent (BOE).


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