Jul 28, 2016 News
– Associated natural gas to be stored until viable purpose is identified
Jeff Simons, the Country Manager for Exxon Mobil, yesterday told the Parliamentary Sub-Committee on Natural Resources that the Company is seeking to drill a third well later this year.
Simons was at the time providing a status report on the Project when he made this announcement.
The drilling of Liza 3 will commence later this year after the completion of the current well he said, while adding, that the key issue is that the Liza 2 results supports the initial development and further drilling is required to confirm the expanded area of block.
He added that the company had collected seismic data, geotechnical data, met ocean data and other well data during drilling. It is that data which will allow the Company to move forward and make decisions.
“We’ve had a group of engineering folks back in Houston (Texas) starting to do scoping studies on what kinds of developments; what the developments will look like; what will the apparatus be out there; the floating production system; and the things on the sea floor, and what will they actually look like, and how they need to be designed etcetera”
Simons did indicate that the company will be seeking to use a Floating Production Storage and Offloading (FPSO) system, which entails a modification of a super tanker to house the facilities and the equipment required to extract the Hydrocarbon.
He added that the oil when extracted will accompany natural gas. This gas when it comes to the surface, will be separated and later, injected back into the ground and stored. The additional data will determine what can actually be done with the gas until commercial purpose (s) can be established. An assessment of the gas itself is being conducted Simons said.
He added that the company has already applied for an environmental permit and then would be pursuing its development plan.
Asked by the Chairman of the Natural Resources Committee, Odinga Lumumba, whether it would be in the Guyana Government’s interest to find an investor in natural gas, Simons said the Company was conducting a number of studies before returning to government on a number of things that could potentially work with the gas.
He said that until a feasible option is identified, it is best to store it until more gas is found.
Minister of State, Joseph Harmon, during a press briefing yesterday, said that the natural gas would be used to generate electricity, produce fertilizer and make liquid propane gas for domestic consumption.
In May last year, Exxon Mobil indicated that it had made a significant find approximately 200 Kilometres offshore of Guyana in the “Liza One” Well which had been under exploration.
Subsequently, last June, there was a declaration which was made following the successful drilling of a second Well – Liza Two, which was classified as an appraisal well. It was confirmed that the estimated volume of hydrocarbons within, ranged from 800 Million to 1.4 Billion barrels of recoverable hydrocarbons.
The Minister of Natural Resources and the Environment, Raphael Trotman, said yesterday as he appeared before the Parliamentary Sub-Committee on Natural Resources stated that since the announcement was made in May, the Government is optimistic that Guyana will enjoy the wealth that is going to come ‘relatively’ soon.
He added that in the meantime, the Ministry has been pulling out all the stops to ensure that persons are trained, by working along with various international agencies who have been lending support including the United States Government, through its Energy Capacity Initiative; the United Kingdom, the Government of Canada; the Mexican Petroleum Institute; the European Union; and the United Nations Programme.
“We have said yes and we are in the process of coordinating the process…The Commonwealth Secretariat is also assisting the government in drafting of the legislation.
He added, that most of these works would have commenced before the change of government, so what is happening now is but a continuation of that process.
However, there were some changes. This, he said, was due to the transition process from the exploratory stage to actually confirming that there is Hydrocarbon within the area being explored.
Minister Harmon asked the Country Manager about the involvement of locals in the oil production process. “Starting from the philosophical part of how the company operates, we always work to maximise local content…Look at many of our mature affiliates whether it’s Malaysia or Germany or Africa, those we typically achieve local workforce content above 80 percent and often above 90 percent.”
He added that during the drilling of the first well, they had established an office in Guyana which did not include much local content. However, with the second well in place, they have made some improvements by increasing the size of their shore base which has allowed them to bring in a cement plant and a mud plant. These are to come in shortly.
“The Companies that we are using, the contractors are starting to expand here in the community so you’ll start to see storage fronts, housing, leasing, transportation and security. All of those things are increasing here as we go on in the exploration phase.”
Simons stated that the operation right now in Guyana is running a drilling rig or two rigs, and this is what the company will be doing in Guyana for the next couple of years. The next step he said, is the production process and when that commences, it will allow require personnel between 50 to 100 persons.
He added that the FPSO will not require much personnel however, persons will benefit indirectly due to the millions of dollars of fuel, the food, security, transportation and medical supplies all of which will be purchased locally.
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