Mar 25, 2021 News
– break-even price set at US$25 per barrel; remainder is profit
Kaieteur News – The ExxonMobil-led consortium producing in the Stabroek Block offshore Guyana believes that its second Floating Production Storage and Offloading (FPSO) vessel will be producing at a much cheaper rate than its predecessor, in addition to its increased production capacity.
This was disclosed by consortium partner, Hess Corporation’s Chief Executive Officer, John Hess, on Tuesday at the virtual Scotia Howard Weil Energy Conference.
Hess told the conference that the Liza Phase One operation, which utilizes the Liza Destiny FPSO has a breakeven oil price of $35 per barrel Brent.
This, contrasted against the projected cost of $25 per barrel from its Liza Two operation using the Liza Unity FPSO, would mean a US$10 decrease in production cost for even more crude being extracted.
The Liza Destiny currently operating at full capacity produced some 120,000 bpd, while the Liza Unity is slated to produce almost double that at 220,000 bpd.
According to Hess, the projected cost for the Payara operation is pegged as $32 per barrel—a cheaper production cost from its first operation.
He told stakeholders that the partners at the Stabroek Block where Liza is located, and where two additional developments in various stages of construction will lead to their production in 2022 and 2024, also foresee two more developments that will come online in 2025 and 2026.
The total five developments will underpin production estimates of more than 750,000 barrels of oil equivalent a day in 2026, John Hess said.
“We continue to see multibillions of future exploration potential remaining” in Guyana, where the three partners including ExxonMobil and China’s National Offshore Oil Company (CNOOC) have made 18 discoveries.
According to Hess, the partners eventually foresee up to 10 separate developments produced by floating production, storage and offloading vessels.
Expanding on the Stabroek Block Operations, Hess reminded that Liza Phase Two—the second Stabroek development—will have nearly double the FPSO capacity of 220,000 bpd, as will Payara, the third development on the block under construction north of the Liza field.
He disclosed too that the fourth planned development, Yellowtail, sited southeast of Liza, has not yet been sanctioned.
“Guyana’s reservoirs rank among the highest quality in the world,” with high recovery rates, he added. “The reservoirs are relatively shallow with no salt, so wells can be drilled faster than other deepwater basins in the world,” according to the Hess Corp. CEO.
According to Hess, the drilling time and costs at the Stabroek Block are less than half those of a typical offshore deepwater exploration, a Hess slide accompanying the CEO’s presentation revealed.
ExxonMobil and its production partners in the Stabroek Block are currently on track to triple its production capacity offshore Guyana, as its second FPSO—Liza Unity—nears completion.
The massive 220,000 bpd FPSO is being constructed at the Keppel shipyard in Singapore with SBM Offshore announcing recently that the topsides lifting campaign for the Liza Unity FPSO was recently completed.
The vessel, which is scheduled to arrive in Guyana as early as mid-year, is scheduled for production in the Stabroek Block and will bring the country’s total capacity to some 340,000 taking into account the 120,000 bpd Liza Destiny—currently operating offshore Guyana.
The hull was built in China, with topside modules built by Keppel and Dyna-Mac.
Once completed, the FPSO is expected to sail to Guyana, where it will be deployed as part of the second phase of ExxonMobil’s Liza field development.
The Liza Unity FPSO is also designed to have an associated gas treatment capacity of 400 million cubic feet per day, and water injection capacity of 250,000 barrels per day.
The vessel, moored in a water depth of about 1,600 meters, will be able to store around two million barrels of crude oil.
According to the company, “the project continues to target first oil in 2022 in line with client planning.”
Once online, the FPSO will be the second FPSO in production in Guyana, after the Liza Destiny FPSO started producing oil in December 2019.
The Liza Destiny was also refurbished by SBM Offshore, which converted the one million barrels storage capacity Very Large Crude Carrier (VLCC) into an FPSO.
The Dutch based company was last October awarded a contract with the Stabroek Block Operator—ExxonMobil and its Guyana partners – to build an FPSO for what will be the third offshore development in Guyana, namely at the Payara field.
Under the contract, SBM Offshore will construct, install, and then lease and operate the FPSO named Prosperity at the Payara project offshore Guyana for a period of up to two years.
The FPSO’s ownership and operation will transfer to ExxonMobil, which operates the Stabroek offshore block in Guyana, along with consortia partners, Hess Corporation and China National Offshore Oil Company (CNOOC).”
The Prosperity FPSO is said to utilize a design that largely replicates the design of the Liza Unity FPSO with first oil expected in 2024.
ExxonMobil has so far signalled intentions to have six FPSOs producing from the Stabroek Block by 2027.
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