"On 18 July, the International Chamber of Commerce approved the attempt by the US energy multinational Chevron to replace Hess Oil as a stakeholder in one of the world's largest offshore oilfields, Guyana's Stabroek, as part of its $55bn (41bn) acquisition of the smaller company. Yet, as Chevron executives celebrated joining Exxon and China National Offshore Oil Corporation (CNOOC) as in producing Guyana's daily oil output of 650,000 barrels, the response from the Guyanese government, opposition leaders and environmentalists was muted."
"The 2016 production and revenue-sharing agreements allow the oil companies to use 75% of revenue from exploration to cover their costs in full. The remaining 25% is split in half, leaving 12.5% of revenues for Guyana, with the government also receiving 2% royalties on all production. Such one-sided deals make Guyana highly attractive to energy multinationals, industry experts say. Costs average about $30 (23) a barrel, making it one of the cheapest and most profitable countries to drill for oil in the world."
Chevron gained approval to assume Hess Oil's stake in Guyana's Stabroek field through a $55bn acquisition, joining Exxon and CNOOC in producing roughly 650,000 barrels per day. Local political and environmental responses were muted, and many Georgetown residents report few benefits for ordinary citizens. The 2016 revenue-sharing framework lets oil companies recover 75% of exploration revenue to cover costs, leaving Guyana roughly 12.5% plus a 2% royalty. Costs average about $30 a barrel, making drilling highly profitable. Guyana has introduced improved fiscal terms for new contracts, but Chevron avoided those terms by acquiring Hess.
Read at www.theguardian.com
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