While the full extent of the Stabroek Block’s oil potential is still being assessed by an ExxonMobil-led consortium, Chairman of the Wales Development Authority, Asgar Ally revealed earlier this year that approximately 15 billion barrels of oil have already been discovered. This is 4 billion barrels more than what was stated by ExxonMobil back in 2022 during its last resource upgrade.
The former Guyanese finance minister and former Deputy Governor of the Bank of Jamaica, shared the foregoing insight during a conversation at the Jamaica Stock Exchange’s Conference earlier this year.
He shed light on the magnitude of the discoveries, stating, “At this point in time. We don’t know the full extent of the oil deposits buts it’s huge…It’s about I would say they have identified 25-30% of that.”
Ally underscored the significance of the Stabroek Block, highlighting ongoing exploration efforts by the block operator, ExxonMobil Guyana Limited. He noted that Exxon has moved to developing several sanctioned projects, now totalling six to date.
Delving into the geological history of the region, Ally elucidated that at one point, Africa and Latin America were joined together. He continued, “So West Africa is closer to the South American coast of which Venezuela, Guyana, Suriname are part of and there is under that coast, a basin of oil, huge basin of oil nobody knows the full extent of; everyday they’re finding more.” It should be noted that while Guyana and Suriname are newcomers to the oil industry, in the past Venezuela’s oil production, was once a cornerstone of its economy.
Moreover, from an economic standpoint, Ally spoke about the transformative impact of the oil and gas sector on Guyana’s growth trajectory. He remarked, “To understand how that growth has come about, most of it is, or half of it is because of the new oil and gas sector. So you’re growing from a low base and as you grow, to the growth increases and the base gets bigger.”
Furthermore, Ally outlined the intricacies of revenue sharing from the Stabroek Block between Guyana and Exxon and its block partners. He noted that Guyana receives 14.5% of a barrel of oil.
“Because how it works is this Exxon is in control of the oil sector virtually. They establish the wells, they drill for the oil, they bring the oil up and they sell it…” he continued. Guyana then receives the 14.5% which includes royalty and profit.
Ally added, “which is very small but still it makes a lot of difference in Guyana and the GDP (Gross Domestic Product) growth is huge.”
The former minister outlined, “But some 75% of a barrel of oil is retained by Exxon for expenses and they use them to pay for all the equipment that they bring in. But that’s really a high percentage, if I may say so.”
Responding to inquiries about the duration of this revenue-sharing arrangement, Ally stated Guyana will continue to receive 14.5% until the oil reserves are depleted within the Stabroek Block.