President Irfaan Ali has been asked to publicly indicate just how much oil Exxon Mobil has produced in the Liza Phase 1 development and clarify for the public how much has been accessed for operational use under Article 11.9 of their Production Sharing Agreement (PSA) with Guyana.
In a letter dated September 27 and seen by Stabroek News, attorney Melinda Janki reminded that under Article 11.9 of the PSA, ExxonMobil and its partners have the right to use any amount of the oil produced for its “Petroleum Operations”. Janki stressed that according to the PSA any oil used or lost in these operations is “excluded from any calculations of Cost Oil and Profit Oil.”
The lawyer argues this “free oil” is missing from the standard financial assessments of the PSA which have instead focused on the Cost Oil provision which grants ExxonMobil et al 75% of production for however long they continue to explore as well as half of profit oil.
Guyana it has repeatedly been stated will receive 12.5% of oil produced but since this unknown amount has not been considered, Guyana’s share is less.
“Guyana’s share is 12.5% of what is left of the actual production after Esso, Hess and CNOOC have taken their free oil under Article 11.9,” she concluded.
In light of this Janki is asking that Ali instruct the relevant Minister to publicly reveal the total amount of oil that has been produced in the Liza Phase 1 Develop-ment. This amount remains unknown as neither government nor ExxonMobil has released these figures.
In March Ali told the Guiana Basin Summit that the first phase of the Liza offshore crude project had achieved its intended full production capacity of around 130,000 barrels per day (bpd) but there was no indication of how much has been lifted by the company.
Government has however publicly stated the number of barrels of oil, Guyana has accessed as its share of profit oil. In August 2021 that number stood at a total of 7,056,262 barrels.
Janki is also requesting that the public be informed of the total amount of oil that Esso, Hess and CNOOC have taken under Article 11.9, the total amount of Cost Oil recovered by the operator and the total amount of Profit Oil.
She maintains that the information which should be shown in barrels of oil each month up to August 2021 should be readily available since Annex C section 5 of the Petroleum Agreement, entitled ‘Production Statement’, requires the Con-tractor to submit a monthly Production Statement to the Minister showing (a) the gross quantity of crude oil and natural gas produced and (b) the quantities of crude oil and natural gas used for the purpose of carrying on petroleum operations.
