Aug 10, 2020 News Comments Off on Exxon could have 10 FPSOs producing oil offshore Guyana in 10 years – Rystad Energy
Rystad Energy, an energy research and business intelligence company, projects that ExxonMobil will be able to place one Floating, Production, Storage and Offloading (FPSO) vessel offshore Guyana, every year for the next 10 years. The Norwegian firm projected that, to do so, ExxonMobil would be expending around US$50B in project sanctioning in the period.
Oil-focused publication OilNOW revealed this in a recent report on Rystad’s work.
So far, ExxonMobil has started production in Liza Phase One, and is on track to produce in Phase Two in 2022, with total peak production at 340,000 barrels per day.
The US$50B figure does not include the funds already partitioned for Liza Phases One and Two, which have already been approved. It is meant for the 14 discoveries made after the Liza field on the Stabroek Block.
“So, with the fields that have not been sanctioned yet – the 14 discoveries that have not been sanctioned,” Rystad’s Schreiner Parker is quoted as saying, “these fields would require somewhere around 50 billion dollars in green-field expenditure, and that’s spending from project sanctioning to first oil.”
Parker, who is the firm’s Vice President for Latin America and the Caribbean, told OilNOW that 1.2M barrels a day of production could be sanctioned by 2025. He noted though that such investments could be jeopardized if the products are not able to be sanctioned.
“The danger is that this investment commitment of 50 billion dollars by 2030 is absolutely at risk if you cannot sanction these projects. That green-field expenditure is only going to come from sanctioning – the money that’s spent from sanctioning the first oil.” Parker is quoted as saying.
ExxonMobil has campaigned since the submission of its Field Development Plan (FDP) for the Payara project to be approved swiftly. Transparency advocates like Dr. Jan Mangal have urged Guyana not to approve the project, as it would operate under provisions of a lopsided contract, and would be managed by a Government that is unprepared to regulate the industry.
Guyana’s ability to scrutinize costs claimed by ExxonMobil has also been a matter of concern. The company projected the development of Liza Phase One to cost US$4.4B in 2017. The cost was later revised to US$3.7B in 2018, then US$3.5B in 2019.
Opposition Leader turned Vice President, Bharrat Jagdeo, had said last year that such a shift in projections is concerning.
As for Liza Phase Two, ExxonMobil projected it to cost US$6B. Canada-based Engineer Darshanand Khusial has raised concerns that this cost, compared to the cost for Liza Phase One, raises several questions that must be answered before Government moves forward with further project sanctioning.
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