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Oil production doubles: Gov’t says increased earnings will drive development for all

ExxonMobil on Friday announced that it has started production at Guyana’s second offshore oil development on the Stabroek Block, Liza Phase 2, bringing total production capacity to more than 340,000 barrels per day. This announcement comes just seven years since the country’s first discovery and one day after the country’s 2022 national budget is passed. The budget, for the first time, includes sums from the sale of crude to fund major projects.

Production at the second Floating, Production, Storage and Offloading (FPSO) vessel – the Liza Unity – is expected to reach its target of 220,000 barrels of oil later this year, as operations continue to be brought safely online, the company said in a statement. It adds to the more than 120,000 barrels per day of capacity at the Liza Destiny FPSO, which began production in December 2019 and is now delivering at better than design capacity. The Stabroek Block’s recoverable resource base is currently estimated at more than 10 billion oil-equivalent barrels.

“We are collaborating closely with the government and people of Guyana to develop this world-class resource responsibly, helping to meet the world’s energy needs and delivering enhanced value for all stakeholders at a record pace and well ahead of the industry average,” said Liam Mallon, president, ExxonMobil Upstream Oil and Gas was quoted saying.

The Liza Unity arrived in Guyana in October 2021. It is moored in water depth of about 1,650 meters and will be able to store around 2 million barrels of crude.

ExxonMobil anticipates that four FPSOs with a capacity of more than 800,000 barrels per day will be in operation on the Stabroek Block by year-end 2025. Payara, the third project in the Stabroek Block, is expected to produce approximately 220,000 barrels of oil per day using the Prosperity FPSO vessel, which is currently under construction.

The field development plan and application for environmental authorization for the Yellowtail project, the fourth project in the block, have been submitted for government and regulatory approval.

During the recent national budget debates, Minister of Natural Resources Vickram Bharrat noted that international firms are being engaged to conduct review of the field development plan.

In a statement on Friday, the Natural Resources Minister said; “The Government of Guyana and citizens welcome the operation of this new FPSO to sustainably extract and manage the country’s oil and gas resources, which will further enhance earnings from this sector to drive Guyana’s infrastructure development and improve the delivery of services to all citizens.”

Minister Bharrat pointed out that the increased total daily capacity of oil augers well for Guyana, especially on the heels of operationalizing the Local Content Secretariat and the Natural Resources Fund, in keeping with the Santiago Principles of transparency and accountability within the petroleum sector. Further, the GoG will be taking all necessary steps to ensure that all Guyanese benefit from the earnings derived from the petroleum sector.

ExxonMobil affiliate Esso Exploration and Production Guyana Limited is operator and holds 45% interest in the Stabroek Block. Hess Guyana Exploration Ltd. holds 30% interest and CNOOC Petroleum Guyana Limited holds 25% interest.