GUYANA’S first oil lift from the Liza Unity floating production storage and offloading (FPSO) vessel, which is servicing ExxonMobil’s Liza Phase Two project, could earn the country approximately US$106 million.
According to information from the Ministry of Natural Resources, Guyana’s first entitlement lift of one million barrels of oil was sold to ExxonMobil Sales and Supply, LLC, following a competitive bidding process by five companies, including the other shareholders of the Stabroek Block.
The Stabroek Block’s recoverable resource base is currently estimated at more than 10 billion oil-equivalent barrels.
ExxonMobil’s affiliate, Esso Exploration and Production Guyana Limited, is the main operator, holding some 45 per cent interest in the Stabroek Block, while Hess Guyana Exploration Ltd. holds a 30 per cent interest, and CNOOC Petroleum Guyana Limited, a wholly-owned subsidiary of CNOOC Limited, holds a 25 per cent interest.
Production in this block jumped to 340,000 barrels of oil per day, following the operationalisation of the Liza Unity FPSO in February this year.
The new production vessel has added to the more than 120,000 barrels per day being produced at the Liza Destiny FPSO, which began production in December 2019.
The Ministry of Natural Resources said the ExxonMobil affiliate’s bid for Guyana’s first lift from the Liza Unity FPSO was the best on the pricing differential for the crude, and this lift will incur no marketing fee by the lifter. The forecasted price for this lift is US$106 per barrel.
“This lift is a one-off arrangement for the company. The GoG [Government of Guyana] will be working to ensure that Guyana receives the best price for each cargo from both the Liza [Destiny] and Unity Gold crudes,” the Natural Resources Ministry related.
As it is now, without the addition of funds from the imminent sale, Guyana has US$719,713,039 in its Natural Resources Fund (NRF).
It was reported recently that revenue generated from the local oil-and-gas sector is expected to catapult Guyana to the ranks of wealthiest countries in the Western Hemisphere, thereby increasing the government’s fiscal space to invest in initiatives geared at expanding the economy, and improving the overall welfare of citizens.
“Guyana is now poised to be one of the wealthiest countries in the hemisphere; we intend to employ the gains from exploiting these deposits into initiatives geared at expanding the economy, improving competitiveness, giving people the best social services, increasing productivity, enhancing food production, and building new sectors,” President Dr. Irfaan Ali had said in his keynote address during a virtual faculty workshop on the microeconomics of competitiveness hosted by the Harvard Business School.
In painting a vivid image of what is expected of the oil-and-gas sector in the near term, Dr. Ali said that by 2025, operating cash flow, based on total investment, is expected to reach US$3.5 billion.
The performance of this sector is expected to improve even further as the years go by, since the success rate is 80 per cent, and there are already 28 commercial discoveries in the Stabroek Block.