Understanding Energy: Looking beyond Liza Phase 1

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ONE month ago, Guyana’s first Floating Production, Storage and Offloading (FSPO) vessel, the Liza Destiny, arrived offshore. This sends a clear signal that first oil is no longer something on the horizon. Rather, oil production will soon be a reality.

Despite the fact that first oil is a major milestone, it’s never too early to start looking past the initial project to see what’s next. Current plans include development in two different offshore areas, Liza Phase 2 and Payara, to be advanced in stages over the course of the next few years. Right now, work is proceeding on all of these projects, but each is in a different stage of development.

The Liza Phase 1 project is almost complete after the arrival of the FSPO vessel, which will eventually produce up to 120,000 barrels per day. In the meantime, Exxon expects that by the end of 2019, four drillships will be operating off the coast, drilling exploratory wells in the area.

Meanwhile, development of Liza Phase 2 is also progressing. Exxon first announced, in May, that it had received the necessary approvals and had started work. Liza 2 is scheduled to begin producing up to 220,000 barrels of oil per day in 2022.

Finally, plans for Payara, the third project planned on the Stabroek Block, have been submitted for review. Payara would involve drilling of up to 45 development wells in the eastern half of the Stabroek Block, which is targeted to begin in 2020. Earlier this year, EEPGL submitted its Field Development Plan to the Department of Energy and its Environmental Impact Assessment (EIA) on the project to the Environmental Protection Agency.

Right now, the Payara Development Project is before the Environmental Advisory Board, which will decide whether the application for environmental authorisation should be granted and if additional conditions apply. In addition, the Department of Energy is reviewing the Filed Development Plan before a production licence can be approved.
This week, students, citizens, and industry experts met at an open house to discuss the Payara project and its impact. Similar meetings were held for the Liza Phase 1 and 2 EIAs in communities across the country. These meetings give citizens the chance to ask questions and voice concerns about the document.

If approval continues in a timely fashion, first oil for the field is expected as early as 2023, and a third FPSO, named Prosperity, would be built to operate off the coast.

When completed, the Payara Development Project will create jobs and economic opportunity for years to come. It is anticipated that oil production from the project will last at least 20 years and employ 600 persons during development well-drilling and peak-installation, and 140 persons during production operations.

Each of these stages contributes to the large production figures the industry is predicting for 2025. While production may grow gradually for the first few years, all the signs point to high levels of production in the future which means higher government revenues in turn.
Already, work on these projects is helping the economy. At a recent meeting, Exxon’s Country Manager, Rod Henson, said that the company had spent more than GY$30 billion on goods and services provided by nearly 500 local businesses since 2015. More than 1300 Guyanese are working on Exxon projects so far, including more than 300 women.