…price for Guyana’s first oil sale still not known
Esso Exploration and Production Guyana Limited (EEPGL), ExxonMobil’s local subsidiary, has begun its installation activities for its Liza Phase 2 development, which will see the oil giant drilling as many as 30 wells.
The ship being used by Saipem
This is according to a notice issued by the Maritime Administration Department (MARAD), which announced that ExxonMobil began its preparations on February 29, 2020, activities that will conclude this year-end.
“On February 29, 2020, Esso Exploration and Production Guyana Limited will commence installation activities in the Liza Phase 2 field, within the Stabroek Block of the Guyana Maritime zone,” the notice stated.
“This exercise is scheduled to conclude on December 31, 2020, and will incorporate the use of pipe laying vessel Saipem FDS2, which will display the international signal [of] vessels engaged in such activities. The field is approximately 102 nautical miles from the coast of Guyana and covers an area of 14 square kilometres.”
Saipem is the company that was awarded contracts by Exxon to develop its Liza field 2 since 2018. The Italian-owned company will provide a number of services, including engineering and construction.
Back in May 2019, EEPGL was granted approval by the Environmental Protection Agency (EPA) to go ahead with its Liza Phase 2 Development offshore Guyana. The oil company had said that the project will have the capacity to produce 220,000 barrels of oil per day.
Exxon had also revealed that the Liza Phase 2 development was funded at the cost of some US$6 billion, including a lease capitalisation cost of approximately $1.6 billion, for the Liza Utility floating production, storage and offloading (FPSO) vessel.
For the Phase 2 Development, six drill centres are planned, along with approximately 30 wells – 15 production, nine water injection and six gas injection wells. Department of Energy Head Dr Mark Bynoe had said that Exxon’s approval to pursue the project was subject to a number of conditions and confirmatory studies.
These include the establishment of a Regional Capping Stack or other solution to ensure that a Capping Stack can be deployed within five days of a well control event with loss of containment; improving the targeted availability of the overall production system of the Liza Phase 2 FPSO to between 98 per cent and 99 per cent, and identifying potential cost savings synergies between Liza Phase 1 and Lisa Phase 2. However, while drilling and production continues apace, the price for Guyana’s first million barrels of its share of profit oil which was shipped on the MV Yannis more than a month ago has still not been announced by the Department of Energy. While the price that was accepted by the Government from the buyer Shell, which it selected without open bidding, is based on the Brent Crude price, this fluctuated widely at the time of sale.
Hammerhead
Meanwhile, the EPA itself also issued a notice informing the general public over the weekend that EEPGL had submitted an application for environmental approval to develop the Hammerhead project.
“The proposed project will be implemented in multiple stages which include the following activities; well drillings and completions, mobilisation and installation of subsea equipment, umbilicals, risers and flowlines, installation of a Floating Production, Storage and Offloading facility.”
“The proposed project will be undertaken in the marine offshore environment within Guyana’s territorial waters and would require land-based activities for support at maritime shore bases. As a result of the intended activities, possible effects to the environment may include impacts on marine water quality, air quality, marine fauna, socio-economic resources,” the notice said.
