This is according to the Bank of Guyana (BoG) second quarter Natural Resource Fund (NRF) Report.
The document in its ‘Local Updates’ chapter said that while the developer’s fifth project, Uaru received the green light from the Government of Guyana (GoG) in April, 2023, the sixth project is also expected to be approved before year end.
In the government’s 2023 Mid-Year Report, it was announced that the field development plan (FDP) for the Whiptail Project is set to be submitted this October. The project is pegged at US$13B.
The government said it has actively engaged with ExxonMobil, having participated in two pre-FDP discussions in April and June. These conversations seek to streamline the proposed developments and align them with the country’s policies.
Vice-President, Dr. Bharrat Jagdeo recently highlighted the government’s policy positions for the Whiptail Production Licence. Notably, he said new policies will ensure ExxonMobil provides prompt data. Additionally, he said there will be greater emphasis on safety during offshore operations and the imperative use of cutting-edge technology to mitigate carbon emissions.
During the recent Barclays CEO Energy-Power Conference, the Chief Executive Officer of Hess Corporation, John Hess said the co-venturers expect approval of the project in early 2024. Front-end engineering and design (FEED) work has also commenced for the project and will inform the field development plan.
The Stabroek Block is estimated to contain approximately 11 billion oil equivalent barrels and is operated by ExxonMobil Guyana Limited. Exxon holds a 45% interest in the block, Hess Guyana Exploration Ltd. holds 30% interest and CNOOC Petroleum Guyana Limited holds the remaining 25%.
Government had previously made its intent clear to fast track petroleum activities also vowing to take measures necessary to facilitate same.
It was the chief policy maker for the industry, VP Jagdeo who said in April this year that such an approach would include the timely award of production licences as well as encouraging investment in the sector. Given the pace at which discoveries are being made in the Stabroek Block, and the overall speed of development activities, Jagdeo said it is critical that the government adopts a complementary approach to ensure local and foreign businesses are not left with stranded investments.
The Vice President said, “All that we are doing is to sustain the level/(momentum) and we will do so aggressively and unashamedly to sustain high levels of activity for a minimum of 15 years. That means licencing new FPSOs (Floating, Production, Storage and Offloading vessels), consistently encouraging investment, going out, as we have done, to an auction in a manner that could potentially have a minimum of five different investors in the basin.”
Guyana is already producing an average 400,000 barrels of oil per day in the Stabroek Block from its two operational projects, the Liza One and Liza Two.
The Liza Phase 1 development began production in late 2019 while production from Liza Phase 2 began in February 2022. A third project, Payara, is expected to start up before year end.
Since it assumed office, the PPP/C administration has granted approval for ExxonMobil’s third, fourth and fifth oil projects. Payara received the blessings of the government in September 2020; this was followed by the approval of Yellowtail in April, 2022. Subsequently, the Uaru project got a green light in April 2023. Presently, the operator’s application for the sixth project- Whiptail- is pending approval.
It must be noted that should this project be approved before year end, it would mark the first time the company received two project authorizations in the same year.
It is projected that by 2027, six to seven projects will be in operation and that by the end of the decade, Guyana’s oil production will increase to more than one million barrels per day.
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