…gov’t hails discovery as major step in Guyana’s emergence as an oil-producing state

EXXON Mobil Corporation (NYSE:XOM) on Tuesday announced it has discovered additional oil in the Payara reservoir offshore Guyana, increasing the total Payara discovery to approximately 500 million oil-equivalent barrels.

These positive well results increase the estimated gross recoverable resource for the Stabroek Block to between 2.25 billion oil-equivalent barrels and 2.75 billion oil-equivalent barrels, the company said in a statement. The well was successfully drilled by ExxonMobil affiliate Esso Exploration and Production Guyana Limited and encountered 59 feet (18 meters) of high-quality, oil-bearing sandstone in the Payara field. It was safely drilled to 19,068 feet (5,812 meters) in approximately 7,000 feet (2,135 meters) of water. The well is only 12 miles (20 kilometers) northwest of the recently funded Liza phase 1 project on the Stabroek Block, which is approximately 130 miles offshore Guyana.

“Payara-2 confirms the second giant field discovered in Guyana,” said Steve Greenlee, President of ExxonMobil Exploration Company. “Payara, Liza and the adjacent satellite discoveries at Snoek and Liza Deep will provide the foundation for world class oil developments and deliver substantial benefits to Guyana. We are committed to continue to evaluate the full potential of the Stabroek Block.”

The Stabroek Block is 6.6 million acres (26,800 square kilometers). Esso Exploration and Production Guyana Limited is operator and holds 45 percent interest in the Stabroek Block. Hess Guyana Exploration Ltd. holds 30 percent interest and CNOOC Nexen Petroleum Guyana Limited holds 25 percent interest.

Meanwhile, the Ministry of Natural Resources in a statement said it joins with President, David Granger, and the Guyanese people in congratulating ExxonMobil and its joint-venture partners Hess and CNOOC Nexen for their latest efforts that led to the confirmation of the volume of the petroleum reserves that were announced regarding the Payara 2 well in the Stabroek Block offshore Guyana. “The announcement marks another important milepost in the journey towards Guyana’s emergence as an oil producing state, and reinforces the reality that Guyana must continue to steadily and carefully build capacity in a race against time before that date,” the ministry stated.

The ministry said it looks forward to the support of all stakeholders, “as we work together to ensure that there is a strong regulatory and fiscal framework in place so that the production of petroleum could be done in a transparent and accountable manner and in a way that is respectful of our environment. We are thankful to all our local, regional and international partners who have committed to working with us to bring us into readiness for oil production. We call on the people of the Cooperative Republic of Guyana to embrace this new reality that has dawned upon our beautiful country and to prepare themselves to take advantage of the opportunities it presents.”

Back in June the ministry had approved the ExxonMobil Liza Phase 1 development plan and issued a production licence for the Liza field. This was an important milestone towards the first phase of oil production at the Liza field offshore Guyana. Production is expected to begin in 2020. Following the approval of the Production Licence and environmental permit, it is expected that ExxonMobil and co-venturers Nexen and Hess will make a final investment decision on the Liza Phase 1 development. In a separate process, the Guyana Environmental Protection Agency issued the Liza field environmental permit on June 1. The environmental permit ensures that the environment is protected through the lifecycle of the project. The Liza Phase 1 development plan includes completion of a floating production, storage and offloading (FPSO) vessel designed to produce up to 120,000 barrels of oil per day.

Meanwhile, Minister of Natural Resources, Raphael Trotman, had said that approximately two billion barrels of oil have been discovered in the Stabroek Block by ExxonMobil and its partners. The Government and people of the Cooperative Republic of Guyana will receive a royalty of 2 per cent on gross earnings and benefit from 50 per cent of the profits from the sale of petroleum once production commences.