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ExxonMobil aims for deductions in 2024 for work that remains two decades away

August 06, 2021

Kaieteur News: 

By the end of 2024—three years from now—ExxonMobil Guyana would have already recovered some US$227M worth in deductions for future works. The monies are deducted annually as Amortised Abandonment Costs, and fall under the category of recoverable costs by the Stabroek Block Operator, Esso Exploration and Production Guyana Limited (EEPGL).

Amortisation refers to the systematic repayment of a debt or writing off of an account over a period of years. The payment schedule is documented in a recently published report by Director of Financial Analysis for the Institute for Energy Economics and Financial Analysis (IEEFA), Tom Sanzillo.

According to the analysis, even before 2020, EEPGL had already deducted US$1M, and that was raised to US$16M by the end of that year. This year, EEPGL, according to Sanzillo, anticipates deducting some US$18M as part of its annual recoverable expenses for abandonment costs.

By the end of next year the company will deduct an additional US$32M which then doubles in the following year –2023—to US$64M. In 2024 EEPGL will deduct from oil sold from the Stabroek Block up to US$95M for a total of US$227M to be deducted as Amortised Abandonment Costs—works to be undertaken some 20 years in the future at the projected end of the lifespan of the Liza 1 oilfield.

More: Exxon will by 2024 deduct US$227M for works 20 years in the future — IEEFA’s Sanzillo 

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