Exxon gets production licence
Minister of Natural Resources, Raphael Trotman
Minister of Natural Resources, Raphael Trotman

…oil discovery pegged at 2B barrels


THE MINISTRY of Natural Resources on Thursday approved the ExxonMobil Liza Phase 1 development plan and issued a production licence for the Liza field. This is an important milestone towards the first phase of oil production at the Liza field offshore Guyana, the ministry has said.

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 said approximately two billion barrels of oil have been discovered in the Stabroek Block by ExxonMobil and its partners. Trotman made the announcement on Thursday during deliberations on the Petroleum Commission of Guyana Bill 2017.

Earlier this month the government had indicated that following reviews of the technical and environmental aspects of the Liza Project-Development Plan that was submitted by Esso Exploration and Production (Guyana) Ltd (EEPGL) in December 2017, it was likely to grant the production licence to ExxonMobil for production of petroleum in 2020. The statement issued on June 2 said the licence will place emphasis on Guyanese employment and training, the procurement of goods and services in Guyana, infrastructural soundness and protection of the environment. According to the government, the production licence is required to be finalised before the developers make their Final Investment Decision (FID) for the project in June 2017.
“Extraction from the Liza field is expected to commence in 2020 at an initial rate of 100,000 barrels of crude per day in the first phase, with a Floating Production Storage and Offloading (FPSO) vessel providing the main infrastructural support for the project,” the Ministry of Natural Resources said in a statement. It added: “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.”
Trotman told fellow parliamentarians that “despite receiving one mishap in not being able to make a discovery… [ExxonMobil] also made two further discoveries which we are in the process of quantifying. We believe that to date the estimate…barrels of oil in the stabroek block by ExxonMobil may equal as much as two billion barrels of oil,” the Natural Resources Minister stated.
An official announcement is likely to be made in the coming days, the Minister noted. During the second reading of the Petroleum Commission of Guyana Bill 2017, Bill No.4 of 2017,Trotman made it clear that his government is working to ensure that the requisite policy, legislative and infrastructural framework are in place to ensure Guyana is prepared for oil production.

In late March, ExxonMobil had announced a major discovery of oil here at its Snoek well offshore Guyana, confirming some 82 feet of high-quality, oil-bearing sandstone reservoirs. ExxonMobil in a statement had said drilling targeted similar, aged reservoirs as encountered in previous discoveries at Liza and Payara. “The latest discovery at Snoek demonstrates the continued success we have achieved in this technically complex play, which is just part of the significant exploration province offshore Guyana,” said Steve Greenlee, president of ExxonMobil Exploration Company, in a statement.
According to the statement, ExxonMobil affiliate Esso Exploration and Production Guyana Ltd commenced drilling of the Snoek well on February 22, 2017 and encountered 82 feet (25 metres) of high-quality, oil-bearing sandstone reservoirs. The well was safely drilled to 16,978 feet (5,175 metres) in 5,128 feet (1,563 metres) of water on March 18. The Snoek well is located in the southern portion of the Stabroek Block, approximately five miles (9 km) to the south-east of the 2015 Liza-1 discovery.
Following completion of the Snoek well, the Stena Carron drillship has moved back to the Liza area to drill the Liza-4 well. “As we continue to evaluate the full potential of the broader Stabroek Block, we are also taking the necessary steps to ensure the safe, cost-efficient and responsible development of this world-class resource, which can provide long-term, sustainable benefits to the people of Guyana,” said Greenlee. The Stabroek Block is 6.6 million acres (26,800 square kilometres). Esso Exploration and Production Guyana Limited is operator and holds 45 per cent interest in the Stabroek Block. Hess Guyana Exploration Ltd holds 30 per cent interest and CNOOC Nexen Petroleum Guyana Limited holds 25 per cent interest.


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