…Exxon to drill 30 wells, estimates 600 million barrels of oil
LIZA Phase 2 Development Offshore Guyana has received ExxonMobil’s approval through funding and the new development will see some 30 wells being drilled and approximately 600 million barrels of oil as a result.
ExxonMobil made the announcement on Friday, giving indication that it intends to commence startup in mid-2022, with hopes of producing up to 220,000 barrels of oil per day.
ExxonMobil’s local subsidiary Esso Exploration and Production Guyana Limited (EEPGL) was granted permission from the Environmental Protection Agency (EPA) and the government for the project.
Liza Phase 2 is expected to cost $6B including a lease capitalization cost of approximately $1.6B for the Liza Unity floating production, storage and offloading (FPSO) vessel.
A total of six drill centers are planned as well as approximately 30 wells, including 15 productions, 9 water injections and six gas injection wells. The company will now work to further capitalize on the significant development potential of the Stabroek Block, where ExxonMobil estimates producing more than 750,000 barrels of oil per day by 2025.
“With the government of Guyana and our partners, ExxonMobil is bringing industry-leading upstream capabilities to build upon Phase 1 and further develop the shared value of Guyana’s resources,” said President of ExxonMobil Upstream Oil & Gas Company, Liam Mallon.
He added: “We are actively pursuing significant development potential from numerous discoveries in the Stabroek Block.”
ExxonMobil stated that the Liza Phase 1 project remains on schedule for first oil by the first quarter of 2020. It will produce up to 120,000 barrels of oil per day at peak rates utilizing the Liza Destiny FPSO, to arrive offshore Guyana in the third quarter of 2019.
Meanwhile, the direct and indirect Guyanese workforce has more than doubled in 2018 to more than 1,000 employees. The release stated that pending government and regulatory approvals, a final investment decision is expected later this year for a third phase of development at Payara which is expected to produce between 180,000 and 220,000 barrels per day with startup as early as 2023.
“ExxonMobil is evaluating additional development potential in other areas of the Stabroek Block, including at the Turbot area and Hammerhead. By the end of 2019 ExxonMobil will have four drillships operating offshore Guyana,” the company said.
Following well completion activities at the recently announced Yellowtail discovery, the Noble Tom Madden will move to the Hammerhead-2 well.
Meanwhile, the Stena Carron is completing a well test at the Longtail-1 discovery, and will then move to the Hammerhead-3 well. Later in 2019, the Stena Carron is expected to drill a second well at the Ranger discovery.
The Noble Bob Douglas drillship is completing development drilling operations for Liza Phase 1 while ExxonMobil will add another exploration drillship, the Noble Don Taylor, in the fourth quarter of 2019.
“As the projects proceed, the partners’ investment in the Guyanese economy continues to increase,” the release stated. “ExxonMobil and its co-venturers spent nearly $60 million with more than 500 Guyanese vendors in 2018. More than 1,500 Guyanese companies are registered with the Centre for Local Business Development, which was founded by ExxonMobil and its co-venturers in 2017 with the mission of supporting local businesses to become globally competitive.” There are 13 discoveries on the 6.6M acres Stabroek Block with the current discovered recoverable resources estimated at more than 5.5B barrels of oil equivalent.
