The much-anticipated commercial oil production offshore Guyana, which was initially slated for 2020, has been brought forward, with Hess Corporation, one of the partners in the oil-rich Stabroek Block, saying production will now start in December – less than two months away.
In its third quarter report, Hess Corporation, which holds a 30 per cent stake in the Stabroek Block with ExxonMobil and other affiliates, announced that production is now targeted to start up in December this year.
This is according to Chief Executive Officer (CEO) John Hess.
“In September, we announced our 14th discovery in the Stabroek Block at Tripletail, offshore Guyana and are now targeting December for first oil from the Liza-1 development,” he said in the report.
Only in September, upon the arrival of the Liza Destiny floating production storage and offloading vessel (FPSO), it was indicated that first oil could be earlier than expected.
In fact, during a reception held to commemorate the FPSO’s arrival, Finance Minister Winston Jordan had hinted at the possibility that the United States oil giant, ExxonMobil, could begin pumping this year instead of the first quarter of 2020 as initially scheduled.
“I haven’t heard any change from the first quarter [when production will start]. There was no particular date in the first quarter. But I’m hearing now that first quarter may be an outside date. I’m not sure whether we’ll be able to get it this year or not. Signs are encouraging though,” the Minister stated.
Meanwhile, Director of the Department of Energy, Dr Mark Bynoe, at the same event, had noted that the Liza Destiny’s arrival, which was ahead of schedule, means that the Department of Energy’s own timetable has to be fast-tracked.
First oil from the Stabroek Block, where 14 discoveries have been made thus far, was initially set for the first quarter of 2020. The Liza Destiny FPSO travelled nearly 11,000 nautical miles for 42 days from the Keppel Shipyard in Singapore.
The vessel is a significant component of the Liza Phase 1 development, which involves four undersea drill centres with 17 production wells. Besides its production capacity of 120,000 barrels of oil per day, it also has an overall storage volume of 1.6 million barrels. During normal operations, there will be at least 80 persons living and working on-board the vessel.
With the 120,000 barrels of oil per day expected from production in the Liza Phase 1 development, it is estimated that Guyana will earn some US$300 million annually.
Warning
However, Opposition Leader Bharrat Jagdeo on Wednesday reminded that none of the monies earned from this sector can be used before next year’s March 2 General and Regional Elections.
“None of the resources… could be used before the elections because there is no budget. There’ll be no budget. The money has to be escrowed, placed in an account… properly guarded until after elections… I have no confidence that if they set up anything that it will be favourable to Guyanese, that is, this group here from the Department of Energy or wherever. They’re too compromised to set up anything to benefit our people. So it’s best that they produced the oil and they escrowed the resources, and then after the elections all of this is settled,” he posited.
According to the Opposition Leader, his party has already made it clear that it will not participate in any architecture that is illegally passed. For example, he noted the Natural Resources Fund was illegally established since it was done after the December passage of the No-Confidence Motion which toppled the coalition government.
“You’ve heard me argue that the Government, the politicians have too much control over the Natural Resources Fund, that we intend to repeal that Bill… We’ll pass a new architecture. The new architecture will have a more arms-length relationship from the politician, it will be more bipartisan,” Jagdeo asserted.
ExxonMobil has said there is potential for at least five FPSO vessels on the Stabroek Block, producing more than 750,000 barrels of oil per day by 2025. Liza Phase 2 Development is expected to start up by mid-2022. It had been reported that the project would use the Liza Unity FPSO to produce up to 220,000 barrels per day.
With Hess Guyana Exploration Ltd holding 30 per cent interest in the Stabroek Block, ExxonMobil’s affiliate Esso Exploration and Production Guyana Limited (EEPGL) has 45 per cent interest and is also the operator of the 6.6 million acres block while CNOOC Petroleum Guyana Limited, a wholly-owned subsidiary of China’s State-owned CNOOC Limited, holds the remaining 25 per cent interest.
