Guyana’s Oil Brings Better Margins Than Nvidia’s Chips

The profitability of the oil field in Guyana, held by a US-Chinese consortium of oil companies, has reached a level that even the leader of the technology sector, Nvidia, would envy in terms of margins. According to Reuters, a report from the government of Guyana – a small South American country in the north of the continent – showed that the consortium, which includes American companies Exxon Mobil, Hess, and Chinese CNOOC, made a profit of $6.33 billion last year by extracting oil from the Stabroek field. This is a massive offshore field located nearly 200 kilometers from the Atlantic coast of Guyana, which hides more than 11 billion barrels of oil across nearly 50 confirmed wells. The field spans 27,000 square kilometers and was discovered by Exxon Mobil in 2015. Production began in 2019.

Currently, three oil platforms are operating in the Stabroek field, producing about 630,000 barrels of oil daily, with three more set to come online soon. In the consortium extracting oil from this field, Exxon Mobil holds the largest share at 45%, Hess holds 30%, and the remaining 25% belongs to the Chinese company. Documents show that the consortium’s total revenue jumped by 23% last year, reaching $11.25 billion. The margin was 56%, which is a better result than Nvidia, which, during the rise of artificial intelligence, recorded a margin of 49%.

Data shows that Hess’s profit grew the fastest last year, by 22%. The company made a profit of $1.9 billion, Exxon Mobil made $2.9 billion, while CNOOC took $1.52 billion back to China. CNOOC’s profit is slightly less than what the Guyanese government earns from oil exploitation, which is $1.62 billion. Hess’s result is particularly interesting in the context of last year’s ‘war’ between Exxon Mobil and Chevron.

In fact, Chemron announced a $53 billion takeover bid for Hess last October. Analysts estimate that Hess’s share in Stabroek alone is worth $50 billion. The main motivation for the acquisition, of course, is Chevron’s entry into the profitable Stabroek. The acquisition has (so far) been blocked by Exxon Mobil, activating a provision that gives other consortium members the right of first refusal on the share of a member wishing to exit the business.

Chevron, however, responded that this provision does not apply to the acquisition of a consortium member by a third company. Therefore, Exxon requested arbitration in March. As things stand now, the dispute between Exxon and Chevron will not be resolved this year.