EXXON Mobil Corp said it has made a final investment decision to proceed with the first phase of development for the Liza field, one of the largest oil discoveries of the past decade, located offshore Guyana.

The development received regulatory approval from the government of Guyana, Exxon said in a statement. The Liza Phase 1 development includes a subsea production system and a floating production, storage and offloading or FPSO vessel designed to produce up to 120,000 barrels of oil per day. ExxonMobil noted that production is expected to begin by 2020, less than five years after discovery of the field. The Liza field is part of the Stabroek Block, which measures 6.6 million acres, or 26,800 square kilometers. Esso Exploration and Production Guyana Limited is operator and hold a 45 percent interest in the block. Hess Guyana Exploration Ltd. holds a 30 percent interest and CNOOC Nexen Petroleum Guyana Limited holds 25 percent.

Esso Exploration and Production Guyana Limited is continuing exploration activities and operates three blocks offshore Guyana – Stabroek, Canje and Kaieteur. Drilling of the Payara-2 well on the Stabroek block is expected to commence in late June and will also test a deeper prospect underlying the Payara oil discovery. Exxon Mobil also announced positive results from the Liza-4 well, which encountered more than 197 feet of high-quality, oil-bearing sandstone reservoirs that will underpin a potential Liza Phase 2 development. Gross recoverable resources for the Stabroek block are now estimated at 2 billion to 2.5 billion oil-equivalent barrels, which include Liza and other successful exploration wells on Liza Deep, Payara and Snoek.

Only on Thursday the Ministry of Natural Resources 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.