China’s ExxonMobil, Hess, and CNOOC recorded a combined net profit of $6.33 billion for their joint oil operations off Guyana last year re, with net profit margins exceeding those of chipmaker Nvidia, according to data cited by the Guyanese government and relayed by Reuters.
The Exxon-led consortium struck a lucrative contract with the Guyanese government when it began exploration off the South American country in the 2010s. Since the discovery of the first oil in what turned out to be the highly prolific Stabroek block, the consortium partners – Exxon, Hess and CNOOC – received billions of dollars in revenues and profits net, production having increased to now exceed 600,000 barrels per day (bpd).
Exxon recorded a net profit of $2.9 billion from operations in Guyana last year, according to Guyanese government statements cited by Reuters. Hess generated $1.88 billion and CNOOC recorded a net profit of $1.52 billion from the Stabroek joint venture in 2023.
The joint venture’s total revenue grew 23% year-over-year to $11.25 billion in 2023.
As a result, the combined net margin of the Stabroek block joint venture stood at 56%, higher than Nvidia’s 49%, according to Reuters estimates.
The Exxon-led consortium secured highly favorable tax and tax terms for the Stabroek block ahead of the discovery of billions of barrels of oil there. Since then, Guyana has adjusted its contracts to double the government’s share to 27.5%, but these terms apply to oil contracts outside the Stabroek bloc.
The main immediate change in the consortium operating in the Stabroek block will likely come from Chevron’s proposed acquisition of Hess. Chevron proposed a multibillion all-stock deal to buy Hess, a minority Exxon partner in the block with a 30 percent stake. ExxonMobil challenged the sale in arbitration proceedings over its right of first refusal for Hess’s stake.
The merger between Chevron and Hess could be delayed until next year due to the arbitration panel settling a dispute with Hess’ Guyana partner, Exxon. Three months after the arbitration request was filed, there is still one arbitrator to be named to complete the panel, Reuters reported last week, citing unnamed sources familiar with the matter.
By Tsvetana Paraskova for Oilprice.com
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