Government data from Guyana revealed that last year, an Exxon Mobil-led consortium secured a lucrative deal generating $6.33 billion for partners. The trio enjoyed a combined net margin of 56%, surpassing that of Nvidia Corp. The consortium’s revenue rose by 23% to $11.25 billion in 2023 due to the addition of a third production vessel, allowing for the production of approximately 630,000 barrels of oil per day with six vessels in total.
The contract terms have sparked controversy, with Chevron’s $53 billion bid to acquire Hess leading to a dispute with Exxon. Hess’s profits from the joint venture grew by 22% last year, with lower income tax expenses compared to its partners. Guyana earned $1.62 billion from its oil, less than the profits of the three partners combined.
Exxon’s net profit was reported at $2.9 billion, Hess Corp earned $1.88 billion, and CNOOC took home $1.52 billion from the Stabroek joint venture. The favorable terms of the contract were negotiated when exploration risks in Guyana were high and the country’s oil potential was uncertain.
Oil consultant Marcelo de Assis, specializing in Latin America, noted that Guyana has since revised its oil contracts to increase the government’s share to 27.5%, but this only applies outside the Stabroek block. He suggested that profits would be high during the investment phase, but would decrease once costs are recovered, leading to higher tax payments and lower profits.
Overall, the consortium’s deal in Guyana has proven to be highly profitable, with significant revenues and net margins exceeding those of major corporations like Nvidia. The dispute between Chevron and Exxon over Hess’s acquisition adds another layer of complexity to the situation, highlighting the competitive nature of the oil industry in the region.
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https://finance.yahoo.com/news/exxon-led-guyana-oil-groups-090512445.html
