News Americas, NEW YORK, NY, Mon. Aug. 25, 2025: As of August 2025, there are now 4 deepwater oil operations in production in Guyana, altogether capable of pumping 900,000 Barrels Of Oil Equivalent (bboe) a day, or US$1.8 billion in oil revenue per month, at today’s oil prices. There have been repeated calls for these projects to be ring-fenced.
To quote Christopher Ram’s definition of Ring-Fencing, “…it simply means that the revenue from one field, or such revenue earned under one production licence, cannot be used to finance exploration in other fields, even under the same agreement.” Mr Ram has been adamant that renegotiation of the Stabroek Block contract is not needed for ring-fencing to be applied.
We show in the calculations below that if ring-fencing were in place for the 3 projects that were in production in 2024, then the government would have had enough from 2024 oil profits to give about US$5,250 to each of the 800,000 Guyanese in Guyana, instead of giving out GYD 100,000 (approximately US$500) only to Guyanese 18 years or older. US$5,250 is more than 10 times larger than the 2024 payout!
As of 2024 – the year for which we have the latest financials of the oil consortium – there were 3 Floating Production, Storage, and Offloading (FPSO) vessels in production. Those 3 FPSOs were Liza 1, Liza 2 and Payara, with capital cost totaling US$18.5 billion as shown in Table 1 below. Altogether the three FPSOs were pumping upwards of 650,000 bboe a day.
Table 1
Now, if we had ring-fenced all 3 of these projects, Guyana would have to pay the Consortium US$18.5 billion in capital cost before the production expenses dropped below 75% of revenue. For simplicity, we will define expenses as capital cost + operational cost. We estimate that operational cost is around US$10 a barrel, based on HESS saying that the cash unit cost in 2027 would be US$10/barrel (see 2Q2023 HESS earnings call transcript). Also, in a 2020 report, Global Witness pegged operating cost at around US$11/barrel (during the withdrawal of its report, Global Witness said it stood by its fiscal modelling). For comparison, the 2017 IMF report estimated the operating cost at US$10.50/barrel.
From Table 2 below, we can see that in 2024, the average revenue per barrel was US$80. Now, if the capital costs of all 3 projects were not paid off, then Guyana’s profit share per barrel would have been US$80*(1-0.75)*0.5= US$10/barrel. But if the capital cost for the 3 projects had been paid off, then Guyana’s profit share was (US$80 – US$10)*0.5= US$35/barrel.
Table 2
We can observe in Table 2 that by the end of 2023, that Guyana had repaid the Consortium about US$15.5 billion in capital costs. That left in 2024, about US$18.5B – US$15.5B = US$3 billion in capital costs to be paid off, see Figure 1.
Figure 1
What we next need to determine is how many barrels would it take to pay off the remaining US$3 billion. We can figure this out by dividing the US$3 billion capital cost by how much capital cost was paid off per barrel in 2024 or (US$80*0.75)-US$10 = US$50/barrel. That works out to 60 million barrels or about 26% of the 225 million barrels produced in 2024. Using the derived pro-rating we arrive at Guyana’s share of 2024 oil profits – before the capital cost was paid off – of US$591 million, and after the capital cost was paid off of US$5.8 billion [(US$80-US$10 )*0.5*(225m-60m)] for a total of US$6.4 billion.
However, because of a lack of ring-fencing, Guyana’s 2024 profit share reported by the Bank of Guyana was only US$2.2 billion, or a forfeiture of US$4.2 billion. Divide that amount by 800,000 citizens, and in 2024 Guyana gave up US$5,250 per citizen.
The Liza 1 and Liza 2 projects were approved in the 2016 PSA by the APNU+AFC government without ring-fencing. The current PPPC government promised to renegotiate the contract if it got into power, see
The PPPC also knew about ring-fencing which requires no renegotiation. Hence, Guyanese have to be bewildered as to why the current government – with 4 chances to put ring-fencing in place: with Payara, Yellowtail, Uaru, Whiptail – looked the other way. Guyana’s forgoing of US$4.2 billion in 2024 will only increase because while in 2024 we were pumping 650,000 barrels a day, now in 2025 we are pumping 900,000 barrels a day.
According to the World Bank, more than 40% of Guyanese are struggling to survive on US$5.50 a day or US$2,000 a year. How does the government explain to them that it could have supplemented them in 2024 with an extra US$5,250, if it had ring-fenced all 3 oil projects when Payara was approved in September 2020?
EDITOR’S NOTE: This article represents the opinion of OGGN solely and not News Americas. It was written by Darshanand Khusial with contributions from Andre Brandli and Janette Bulkan for the Oil & Gas Governance Network Guyana (OGGN)