Dec 22, 2019 News
By Gary Eleazar
An announcement by Head of State, President David Granger, much like a similar one made after taking office in 2015—has sent shockwaves across the country; Guyana is now an oil producing nation.
In 2015, the President soon after taking Office, announced that US oil major, ExxonMobil, working with its Joint Venture partners had made the ‘Liza discovery’ representing first significant oil find offshore Guyana.
The oil major had encountered more than 295 feet (90 meters) of high-quality oil-bearing sandstone reservoirs—safely drilled to 17,825 feet (5,433 meters) in 5,719 feet (1,743 meters) of water.
The task afterwards—after proving commercial viability from the Liza I discovery—was to then set about with a Field Development Plan (FDP) that was later approved and called for production 190 kilometres offshore Guyana using a Floating Production Storage and Offloading Vessel.
That development cost about US$460M with the massive offshore centre producing and storing the precious crude uses four drill centers on the seabed with 17 wells in total; eight oil producing wells, six water injection wells, and three gas reinjection wells.
The Liza Destiny—commissioned by First Lady Sandra Granger—is designed to produce up to 120,000 barrels of oil per day, with storage capacity of up to 1.6 million barrels.
FPSOs are not exactly built on a commercial production line that churns out hundreds or even dozens a year,
As such, Guyana’s oil and gas future begins in the hull of the specially ordered and designed Liza Destiny—a converted Very Large Crude Carrier (VLCC) that was rebuilt into the first FPSO for the ExxonMobil.
The company, soon after receiving approval for the field plans and an investment decision by shareholders, went ahead and placed an order for the Liza Destiny –Liza is a fish indigenous to the area–with a US$1B contract given to Dutch floater specialists, SBM Offshore.
A Bahamas-flagged VLCC was quickly identified and chosen by SBM Offshore for the conversion.
That process began in November 2017 when the tanker’s arrived at Keppel shipyard in Singapore, after which it embarked on a 50 day voyage to Guyana before being moored in the Stabroek Block.
The Liza I offshore oilfield field is located in the Stabroek block, which covers almost 27,000 square kilometers and extends to, between 120 kilometres and 200 kilometers offshore Guyana.
Exxon Mobil’s subsidiary, Esso Exploration and Production Guyana Limited (EE&PGL) is the lead operator in the historic venture. It holds a 45 percent interest in the Stabroek Block.
Hess Guyana Exploration Ltd. holds a 30 percent interest, and China National Offshore Oil Corporation (CNOOC- Nexen) Petroleum Guyana Limited holds a 25 percent interest.
The crude now being extracted from deep below the seabed is largely a composite of water, oil, gas and sand solution. It will be taken to and separated on the FPSO where the oil is then retained in the hull of the Liza Destiny
The water and natural gas is re-injected into the reservoir, in order to maintain maximum pressure.
According to the company’s projections, following start up on Friday the vessel is expected to house year round about 60 to 70 crew members but is built to accommodate 120 people aboard.
The 60 to 70 crew members will be operating on a daily basis with support services sourced in Guyana.
On shore, SBM Offshore has also indicated using a team of about 20 persons initially, particularly for logistics for its supplies and technical support such as the provision of training for staff.
The lease and operation contract for the FPSO between EEPGL and SBM Offshore, includes an initial period of ten years with extension options up to an additional ten years.
The company has since already indicated an intention to stay in Guyana throughout the course of the ExxonMobil operations.
Discoveries to date in the Stabroek Block have yielded in excess of 6.6 billion barrels. Exxon has already begun construction of a second FPSO—the Liza Unity—for production in the Liza Deep/Liza II discovery.
The announcement of oil production in Guyana came on Friday last on what will now be known as Guyana Petroleum Day—four months ahead of what was a scheduled March 2020 first oil.
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