Jan 28, 2020 News
ExxonMobil has revised its reserve estimate for the Stabroek Block to more than 8 billion oil-equivalent barrels.
Not 8 billion barrels of oil. The term ‘oil-equivalent’ includes the quantity of oil as well as the quantity of gas in the quoted estimate. The company still has not made public the proportion of oil to gas in most of its discoveries, despite calls for it to do so.
ExxonMobil had previously stated 6 billion oil-equivalent barrels as its estimate for the 15 discoveries it made on the Stabroek Block before the year started. Further appraisals gave the company the data it needed to make a more informed estimation of the reserves.
“With recent high-quality finds at Tripletail and Mako contributing to our recoverable resources, our investments will continue to provide benefits for the people of Guyana,” Senior Vice President of Exploration and New Ventures, Mike Cousins, is quoted as saying, in an ExxonMobil press statement.
Meanwhile, ExxonMobil announced a 16th discovery in the Block, called Uaru. It is the first discovery of 2020, and is not included in the revised estimate.
ExxonMobil said that in that discovery, it encountered approximately 94 feet (29 metres) of high-quality oil-bearing sandstone reservoir. The well, drilled in 6,342 feet (1,933 metres) of water, is located approximately 10 miles (16 kilometres) northeast of the Liza field, which began producing oil in December 2019.
Hess Chief Executive Officer, John Hess, said “We are pleased to have another significant oil discovery on the Stabroek Block at Uaru. Previous discoveries on the block including recent high quality finds at Tripletail and Mako underpin a significant increase in estimated gross discovered recoverable resources for current and future developments. We also continue to see multibillion barrels of additional exploration potential remaining.”
Energy Director, Dr. Mark Bynoe said in a statement from the Ministry of the Presidency, “All Guyanese should welcome this new discovery and should begin to appreciate that the nation is on the cusp of major economic transformation and sustained development. The Department of Energy remains committed to working with its partners and ecosystem of agencies, to ensure that the benefits from the sector, both direct and indirect, redound to every Guyanese.”
Four drillships are currently exploring and appraising, and a fifth drillship is expected to be added later this year, according to ExxonMobil and Hess.
ExxonMobil expects to ramp up production in the coming months for the Liza phase one project to the maximum production capacity of the Liza Destiny Floating Production, Storage and Offloading (FPSO) Vessel, 120,000 barrels per day.
The oil major and its partners have already gotten approval for production in the second phase of the Liza field. The Liza Unity, meant to operate in that project, is under construction in Singapore, and is expected to start production in 2022. It has a maximum production capacity of 220,000 barrels per day.
ExxonMobil hopes that Government will review and accept its third Field Development Plan, for the Payara project. The company has jumped ahead prematurely awarding contracts for works related to that project, including initial construction work for the third planned FPSO, the Liza Prosperity. It is being built to have the same production capacity as the Liza Unity, 220,000 barrels per day. The company expects to start production in 2023.
Dr. Bynoe stated that “The petroleum sector is already stimulating increased employment and expanded services, and we are expecting a ramping up of these benefits during the Decade of Development (2020-2029) which is aimed at ensuring that the country’s petroleum resources are utilised to improve citizens’ quality of life and retaining greater value from the sector for Guyana and Guyanese.”
The Ministry of the Presidency’s statement noted that Guyana will be getting two percent royalty and a minimum of 12.5 percent (which is profit oil), amounting to a minimum share of 14.5 percent. Government expects that Guyana’s share will increase as the capital and operating costs invested by Exxon and its partners are liquidated.
Hess and ExxonMobil expect that production on the Stabroek Block will meet 750,000 barrels per day by 2025, but still have not explained how that figure will be reached. Currently approved projects would take production to a peak of 340,000 barrels per day. If Payara is approved, production would peak at 560,000 barrels per day. The companies have indicated that they envision five FPSOs operating in the Block by 2025, but haven’t made the necessary proposals to Government yet.
The Stabroek Block is 6.6 million acres. ExxonMobil’s local subsidiary, Esso Exploration and Production Guyana Limited (EEPGL) is the operator with 45 percent interest. Hess Corporation’s local subsidiary, Hess Guyana Exploration Limited, holds a 30 percent interest. CNOOC International Limited’s local subsidiary, CNOOC Petroleum Guyana Limited, holds 25 percent.
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