AFTER more than two months since it left its shipyard in Singapore, the Liza Unity, Guyana’s second floating production storage and offloading (FPSO) vessel, has arrived. This should be celebrated as a win for Guyanese, as the arrival of this new piece of technology means much more than just another FPSO.

The Liza Unity represents Phase 2 of the Liza project in Guyana’s Stabroek Block, a symbol of progress as the country continues to develop and grow its oil and gas sector. Liza Phase 1, supported by the Liza Destiny FPSO, began production in late 2019 and has already delivered over US$435 million to Guyana’s Natural Resources Fund, with a projected US$600 million by year end. With the addition of a second FPSO vessel, Guyana could more than double production by the end of next year, keeping the country on track to reach more than one million barrels of oil per day by the late 2020s; that means significantly more annual revenues for the government.

This approach has been beneficial for a couple of reasons. By installing a lower capacity FPSO earlier on, the Liza Destiny, Guyana was able to start producing oil more quickly. This also provided more time to build the Unity, which has significantly larger capacity with new features to help safely increase production by a large margin. This approach has also allowed Guyana to build quickly from initial production, as compared with neighbours like Suriname, which has stated it does not expect any final investment decisions for its own discoveries before 2022, meaning production likely won’t happen until several years later.

The Liza Unity’s 220,000 barrels of oil per day will combine with the Destiny’s output to reach more than 340,000 barrels per day, about one third of Guyana’s expected daily production within the next decade. The Unity is also capable of producing oil from nearly double the amount of wells as the Destiny. The Unity will draw from 30 wells across a large area of the seafloor. The ship also includes a number of state-of-the-art technologies that are aimed to ensure the highest environmental standards. For example, the Unity is designed to avoid all routine flaring, an issue that has been top of mind for Guyanese.

Significantly, it is the first FPSO worldwide to receive Sustain-1 notation, which, according to the American Bureau of Shipping, means that the design and construction of the unit were assessed against requirements that align with certain United Nations Sustainable Development Goals (SDGs). These many benefits signify the massive investment that the Unity required, and which the companies can now make back from production through cost recovery. This process, spelled out in the production sharing agreement (PSA), allows this kind of upfront investment to happen without any risks or costs to Guyanese taxpayers.

By the end of 2022, the Unity is expected to more than double Guyana’s production capabilities. And as oil prices continue to rise and are expected to remain elevated in the rest of 2021 and into 2022, according to analysts, Guyana will gain even more money. While the Unity is expected to begin production in early 2022, it will need time to ramp up production to full capacity to ensure everything is done as safely as possible. Total production output is expected to increase steadily over the year as systems and wells are brought online and tested one by one.

Stabroek Block operator, ExxonMobil, recently increased its estimated oil reserves in Guyana to ten billion barrels of oil equivalent, after extensive exploration efforts found significant oil deposits at the Pinktail and Turbot-2 sites. In the Stabroek Block alone, ExxonMobil is planning to drill at least 37 exploratory wells through 2025, a campaign that could find billions of additional barrels of reserves for Guyana. The company has previously stated that it could have as many as ten FPSOs to develop its current resource estimate.

Ongoing public discussions on the development of the Yellowtail and Redtail discoveries are also promising, as these are expected to be the largest project to date and will follow the Payara project. Payara is expected to start production in 2024, with Yellowtail to follow in 2025, providing even more long-term prosperity for Guyana.