Dec 10, 2019 News Comments Off on ExxonMobil, Merrill Lynch provide conflicting figures on oil production by 2025
By Kemol King
ExxonMobil and Bank of America Merrill Lynch aren’t carrying the same tune about what the oil company’s production figures will add up to in 2025.
The Oil Giant has said for some time now that it sees itself producing 750,000 barrels of oil per day by 2025 in Guyana. However, the American Bank, which works with ExxonMobil and has labeled the company its top oil major pick for the year, has said that it expects oil production to exceed 1M barrels of oil per day by 2025 in Guyana.
Just last month, Chief Executive Officer (CEO) John Hess, of ExxonMobil’s joint venture partner on the Stabroek Block, Hess Corporation, reiterated to a Global Energy Confab in Florida that 750,000 barrels per day is the target of the oil majors.
The currently approved projects, Liza-1 and Liza-2, would only add up to 340,000 barrels per day, a far cry from 750,000 barrels per day. Even if the Payara project, for which the Field Development Plan has not even been approved, is counted, that would take the total to 560,000 barrels per day, at peak production.
The three Floating, Production, Storage and Offloading (FPSO) facilities, the Lizas Destiny, Prosperity and Unity, have the capacity to produce at peak 120,000; 220,000 and 220,000 barrels per day, respectively.
The Hess Boss had had it pointed out to him during the Florida confabulation that the numbers don’t add up, and he could not make up the rest of the numbers, despite even saying that the total production by 2025 could even exceed 750,000.
He also said that the already discovered resource will underpin at least five ships. This is sure to take back Guyana’s energy officials within Government, who have only received Field Development Plans for three projects.
The Hess Chief added that the reason the appraisal is being done this year and the first half of next year in the Liza to Turbot area is to get better definition about what ship four, give, and potentially six and seven are.
The Hess Boss said that ExxonMobil would be able to give clarity on the production capacity and the number of FPSOs by March of 2020.
Merrill Lynch is saying, too, that Exxon will tell the public about its plans at its Analyst’s Day in March. The bank was entrusted by ExxonMobil in October to sell off its Malaysia assets. Recently, it has taken the time to meet with ExxonMobil management, including its Senior Vice President, Andy Sweiger. The Bank has also met with Exxon’s Investor Relations and its Guyana country team, headed by Rod Henson.
Its assessment is clear, that investors should cleave to ExxonMobil because the company is on track to experience eight years of growth, with gross operating production far exceeding 750,000 barrels per day.
The Bank expects a 2025 target of at least 1M barrels of oil per day to be confirmed at Exxon’s Analyst’s Day in March. How the American Bank has arrived at that figure, when ExxonMobil would not even account for 75 percent of it, is not clear.
What’s clear is that the Energy Department, headed by Dr. Mark Bynoe, has given a clear signal to the eager company to hold its horses.
The regulator intends to hire a third party reviewer to assess the development plans for the Payara project. He had said, during a press conference in November that increased scrutiny is needed for the development plans. Government cannot do it alone.
It has learnt a little from evaluations of plans for the Liza Phase One and Two Projects, but Dr. Bynoe said that the Energy Department is following through with an expedited procurement process for the third party reviewer with the help of the World Bank, one of Guyana’s international development partners.
Dr. Bynoe said that the Department is targeting the first week of December for the third Party Reviewer contract award and subsequent third Party Review into the first quarter of 2020.
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