MOST Guyanese will already know the story: on December 22, the Venezuelan navy intercepted a seismic exploration vessel looking for oil in the western part of the Stabroek Block. The ship was forced to turn back even though they were exploring with permission and permits from the government within Guyanese territorial waters.

In the weeks since, Venezuela has doubled down on its actions and reiterated its claim over the western part of Guyana’s maritime territory despite its actions being condemned by the United States and the international community. The situation is uncertain enough that the seismic vessels have not yet been able to return to the area.

According to reports, the incident occurred more than 110km west of the nearest discovery to date—the Ranger find. While the situation must be resolved, the good news is that development of existing finds is continuing on schedule and as planned.

Nearly all of the 5 billion barrels discovered at 10 sites in our waters so far has been found in the southeastern part of the block, far from the maritime zone that Venezuela is encroaching upon. ExxonMobil has stated that its progress on developing the Liza Phase 1 project is continuing and that the project is still set to produce as much as 120,000 barrels of oil per day by early 2020.

Planning for Liza Phase 2 is also progressing, and that project could be producing even more oil by 2022. Liza Phase 2 is currently awaiting a variety of approvals and permits from the government, but Venezuela’s recent activities are not slowing progress.
Exploration drilling continues as well. Last week, the drillship Stena Carron started drilling the Haimara-1 exploration well 31 km east of the Pluma discovery in the southeast region of the block. And, the Noble Bob Douglas is slated to drill a second exploration well called Tilapia-1 later in the month. This well is set to be drilled in the Turbot region, where a series of discoveries, like the Longtail well, have helped add nearly a billion barrels to Guyana’s estimated reserves over the past several months.

The Turbot area is where a seismic research ship is currently using sound waves to map the rock under the sea floor as part of a multi-million US dollar exploration program. That ship, under contract with Exxon and owned by the Norwegian company, Petroleum Geo-Services, is making a detailed map of the underlying geology to aid in exploration—a process discussed at length in a previous Understanding Energy column.

Guyana energy development remains on track and we still have the potential to be producing as much as 750,000 barrels per day by the late-2020s. Drilling has proceeded rapidly in the Stabroek over the last two years with an unprecedented success rate for wells and unexpectedly porous subsea rock that has made drilling easier and faster. Much of that success has been clustered in specific “sectors” like the Turbot.

According to reports from Norwegian energy consulting firm, Rystad Energy, one day each of these clusters of wells could support its own floating production storage and offloading (FPSO) vessel. Exxon has stated that up to five of these ships could be needed for offshore development.

So even with some exploration activity halted, finds to date and estimated production rates could push Guyana past Mexico and Venezuela in terms of oil production by 2025. In addition to the billions of US dollars in revenue that the production will create, that kind of development could also help establish Guyana as a regional economic centre and allow us to properly fund our own border security.

Overall, it seems that despite Venezuelan threats and actions, Guyana is rapidly moving towards becoming a major oil producer, putting us in an increasingly strong position for the future.