Guyana production of nearly 360,000 barrels of oil exceeds design capacity – Exxon’s 3Q report

– as EEPGL 5-year local content master plan approved by Govt

Oil giant ExxonMobil has posted its third quarter results for 2022, which come up to US$19.7 billion, and has attributed increased production from its operations in Guyana, which have grown to 360,000 barrels and in excess of design capacity, as one of the factors in its massive earnings.
According to the company in its third quarter earnings report, higher volumes of oil from its assets in Guyana and the Permian were among the factors that contributed to its earnings. It said that assets in the Permian delivered 560,000 barrels of oil per day, an increase of over 50,000 barrels of oil.
However, its operations in the Stabroek Block offshore Guyana averaged nearly 360,000 barrels of oil per day. In fact, oil production in the Liza Phase 1 and 2 have been exceeding design capacity by more than 15,000 barrels of oil per day.
“In addition, two new discoveries were announced in the Stabroek Block, adding to the company’s extensive portfolio of development opportunities,” Exxon said, a reference to the oil finds at the Sailfin-1 and Yarrow-1 wells that were announced only a few days ago.

In its statement, Exxon Chairman and Chief Executive Officer (CEO) Darren Woods attributed the company’s strong showing in the third quarter to the hard work of Exxon staff, as well as the company’s cognisance of its role to produce oil and the energy products the world needs.
“The investments we’ve made, even though the pandemic, enabled us to increase production to address the needs of consumers. Rigorous cost control and growth of higher-margin petroleum and chemical products also contributed to earnings and cash flow growth in the quarter.”
“At the same time, we are expanding our Low Carbon Solutions business with the signing of the largest-of-its-kind customer contract to capture and permanently store carbon dioxide, demonstrating our ability to offer competitive emission-reduction services to large industrial customers around the world,” Woods added.

Master plans
The Government of Guyana has meanwhile approved the local content master plans of ExxonMobil subsidiary Esso Exploration and Production Guyana Limited (EEPGL), as well as Saipem and Gulf Engineering Services Guyana Limited (GESGI).
The Local Content Act requires companies in the oil sector to submit five-year master plans on how they intend to promote local content. And a few days ago, EEPGL, the operator in the Stabroek Block, became one of the latest companies to have their 5-year local content master plans approved.
Saipem, whose plan was also approved, is an Italian-owned company that was awarded contracts by ExxonMobil to develop its Liza Phase 2 project in 2018, its Payara project in 2019, and its Yellowtail project in 2022. The company is providing a number of services, including engineering and construction services.
According to a statement from the Ministry of Natural Resources, Natural Resources Minister Vickram Bharrat was present at the signing. He reminded the companies of some of the challenges faced by suppliers, such as cash flow, and the need to reduce payment periods.
The Minister also revealed that the Government is discussing with commercial banks to have contracts lodged as collateral. Meanwhile, EEPGL President Alistair Routledge described the signing as a step in the direction of ensuring local content.
“The resource we are producing belongs to the people of Guyana and we are committed to ensuring that they benefit from it. Today’s event was another step in that direction since we believe that growing local content across the oil and gas sector can increase social and economic benefits for Guyanese in the short and long term,” Routledge said.
The five-year master plan is intended to provide the Minister and the Local Content Secretariat with an understanding of the contractor, sub-contractor or licensee’s projected activities with regard to employment, procurement and capacity development of Guyanese suppliers.
Importantly, these plans include an amendment which ensures that Guyanese suppliers of the petroleum sector are paid within thirty (30) to forty-five (45) days upon receipt of the correct invoice. This plan is enforceable under the Local Content Act.
Just the week prior, the local content plans for 11 companies providing oil support services were approved. Two of the companies, Guyana Shore Base Inc (GYSBI) and its sister company, Sustainable Environmental Solutions (SES), had earlier this year also received their Local Content Certificates, after satisfying the requirements for Guyanese ownership.
The other companies were Cataleya Energy Limited, International SOS Incorporated, Leader Engineering Guyana Incorporated, Stena Drilling, Tenaris Guyana, G-Boats, Weatherford, TechnipFMC, and Seacor Marine LLC.