President needs to clarify this 39.8% oil share figure

Dear Editor,

President Irfaan Ali indicated on August 18 that Guyana’s share of oil from the Stabroek Block has increased from 12.5% to 39.8%. See: https://youtu.be/kiP-WwYh1l4?t=593.^[1]

However, in its 2026 Half-Year Report, issued a few weeks later on August 28, 2026, by the Honourable Dr. Ashni K. Singh, M.P., Senior Minister in the Office of the President with Responsibility for Finance, the Bank of Guyana (BoG)^[2] appears to imply that Guyana’s profit share will be less than 30%. That would amount to billions of US dollars less than the figure implied by President Ali.

When President Ali made his statement, he implied that the maximum cost recovery going forward would be 20.4%. However, in section 3.63 on page 21, the BoG states:

“The Stabroek Block partners will continue to recover current costs, lower than 75 percent of gross revenue, and Government will receive more than 12.5 percent of gross revenue in profit oil. As additional projects are approved, and their development costs enter the cost bank, the profit-oil ratio will move again.”

This statement essentially means that the cost bank can rise to as much as 75% of gross revenue. Stated another way, Guyana’s profit share going forward could range from 12.5% to 39.8%.

When Exxon referred to US$55 billion in capital and operating costs being paid off by the end of 2Q2026, it was not clearly stated which projects were included. However, one could reasonably assume that Exxon was referring to the first seven oil projects. The eighth oil project has already been approved, while the ninth oil project is in the process of being approved. Thus, one can assume that the 39.8% profit share could be short-lived.

The Bank of Guyana’s own production and oil-price assumptions raise an important question about the implied profit share for the second half of 2026.

For the first half of 2026, the BoG reports that Guyana produced 163.3 million barrels from the first four oil projects at an average price of US$92.50 per barrel. At a 12.5% profit share, Guyana’s first-half profit oil would therefore be:

163.3 million × US$92.50 × 12.5% = US$1.89 billion

The BoG projects an average oil price of US$86 per barrel for the full year. We can therefore work backwards to determine the oil price that the BoG must effectively be assuming for the second half of 2026.

Scenario 1: Fifth project starts October 1

Assume the existing four projects produce another 163.3 million barrels during the second half of the year, and the fifth project contributes another 22.5 million barrels after starting on October 1 at approximately 250,000 barrels per day.

Second-half production would therefore be:

163.3M + 22.5M = 185.8 million barrels

Full-year production would be:

163.3M + 185.8M = 349.1 million barrels

For 349.1 million barrels to average US$86 per barrel for the year, after the first 163.3 million barrels were sold at an average of US$92.50 per barrel, the implied average price for the second half must be approximately:

US$80.29 per barrel

That gives second-half gross oil revenue of:

185.8M × US$80.29 = US$14.92 billion

If Guyana’s share during the second half is 39.8%, its second-half profit share would be:

US$14.92B × 39.8% = US$5.94 billion

Adding the first-half US$1.89 billion gives:

US$1.89B + US$5.94B = US$7.83 billion

Yet the BoG is projecting approximately US$5.97 billion in profit-oil revenue for the entire year.

Since approximately US$1.89 billion relates to the first half, the BoG projection leaves only:

US$5.97B − US$1.89B = US$4.08 billion

for the second half.

Against estimated second-half oil revenue of US$14.92 billion, that means the BoG projection effectively assumes a second-half profit share of:

US$4.08B ÷ US$14.92B = 27.4%

That is substantially below the 39.8% figure being used for comparison.

Scenario 2: Fifth project does not start until December 1

Now take a much more conservative assumption. Suppose the fifth project contributes only 7.5 million barrels during December. Using the same steps as in Scenario 1 and the BoG’s projection, the implied second-half share becomes 29.95%.

So, even if we use the BoG’s relatively low US$86 full-year oil-price assumption, its projected US$5.97 billion in profit oil appears to imply that Guyana receives only about 27.4% to 30% of second-half gross oil revenue, depending on when the fifth project starts.

If, in 2027, we produce 1.15 million barrels per day for the entire year at an oil price of US$100 per barrel, that would generate approximately US$42 billion in revenue for the year. If Guyana receives a 39.8% profit share, that would amount to approximately US$16.7 billion. However, if Guyana receives only 27.4%, the profit share would be approximately US$11.5 billion.

We are talking about a difference of US$5.2 billion — almost the amount of Guyana’s entire 2024 national budget.

President Ali needs to clarify: when he stated that Guyana will receive 39.8% of the Stabroek Block oil revenues, did he mean that this level would apply for only a couple of months?

References

1. The Errea Wittu FPSO is expected to arrive in Guyana this week as the Stabroek Block’s Uaru development advances toward first oil, President Irfaan Ali announced. | OilNOW — www.linkedin.com ↩
2. Guyana Approves a US$1.65 Billion - The Rio Times — www.riotimesonline.com ↩
3. https://www.oggn.org/about ↩