ExxonMobil reported US$15.4 billion in earnings for the third quarter of 2026, up from US$14.5 billion in the second quarter, while adjusted earnings increased to US$17.5 billion from US$14.7 billion.
However, the company's upstream earnings, which cover its oil and gas exploration and production activities, declined from US$7.93 billion in the second quarter to US$7.09 billion in the third quarter.
In its October 30 earnings release, ExxonMobil attributed the sequential decline in upstream earnings to lower oil prices and what it described as an “accelerated Guyana entitlement impact.”
The reference points to the changing share of production available to the oil consortium as development costs are recovered under the country's production-sharing agreement (PSA).
The company also reported that its upstream segment generated US$7.308 billion in adjusted earnings during the third quarter, compared with US$9.189 billion in the previous quarter. This is a decline of approximately 20.5%.
Under the 2016 Stabroek Block PSA, the contractor group, led by ExxonMobil alongside Hess and CNOOC, is allowed to recover eligible petroleum costs from production.
The agreement provides for:
- A 2% royalty payable to Guyana.
- Up to 75% of production, after the applicable royalty calculation, to be allocated towards recovering eligible costs.
- The remaining production, known as profit oil, to be divided equally between Guyana and the contractor group.
As the consortium recovers more of its accumulated development costs, less production is needed for cost recovery and more becomes available for the 50-50 profit-oil split.
In August, President Irfaan Ali said Guyana's share had risen to approximately 39.8 barrels out of every 100 barrels produced, reflecting the reduction in the consortium's cost-recovery allocation. The Ministry of Natural Resources subsequently clarified that this 39.8% represents Guyana's share of total production, not its share of profit oil. Guyana's share of profit oil remains 50%, in addition to the royalty.
This changing allocation is relevant to Exxon's financial reporting because the company and its co-venturers receive a smaller share of production as Guyana's entitlement increases.
The company said the reduction in upstream earnings also reflected lower oil prices. Its financial presentation further identified lower advantaged volumes, including the accelerated Guyana entitlement impact, among the factors affecting its upstream performance.
The development comes as Guyana's oil industry continues to expand, with production from the Stabroek Block reaching around 900,000 barrels per day from four producing floating production, storage and offloading (FPSO) vessels.
.png)
