Georgetown/Houston — Guyana’s lucrative agreement with an Exxon Mobil-led consortium in the South American country last year generated $6.33 billion for the partners, government data showed, yielding a net margin larger than that of chip-maker Nvidia Corp.
The trio’s combined net margin was 56%, greater than the 49% Nvidia earned in its most recent fiscal year.
The Stabroek offshore oil venture’s 2023 revenue soared 23% over the prior year, to $11.25 billion, as the addition of a third production vessel expanded output. The group is producing about 630,000 barrels of oil per day from three vessels and has three others coming.
The favorable contract terms have caused controversy. Chevron’s $53 billion bid to acquire Hess also has sparked a dispute with Exxon, which has challenged the sale.
Hess’s profits from the joint venture grew the fastest of the three partners, up 22% last year, on proportionately lower income tax expense than its partners. Its profit outstripped the $1.62 billion earning by the South American nation from its oil.
Guyana government filings show Exxon net profit was $2.9 billion, Hess Corp earned $1.88 billion and CNOOC took home $1.52 billion from the Stabroek joint venture.
The favorable contract terms were secured from Guyana when exploration risks were high and the country’s oil potential was unknown, said Marcelo de Assis, an oil consultant specializing in Latin America.
Guyana has since revamped its oil contract terms that will roughly double the government’s share to 27.5%, but they apply only outside the Stabroek block.
“Profits will be high during the investment phase,” Assis said. “After costs are recovered, the group will pay more taxes and profits fall.”
Reporting by Sabrina Valle in Houston and Kemol King in Georgetown; Editing by David Gregorio – Reuters
