…December 20 named “National Petroleum Day”
United States oil giant ExxonMobil has commenced production of Guyana’s oil in the Stabroek Block, where 14 discoveries of crude in commercial quantities have been made since 2015.
“ExxonMobil [on Friday] announced that oil production has started from the Liza field offshore Guyana ahead of schedule and less than five years after the first discovery of hydrocarbons, which is well ahead of the industry average for deepwater developments,” a statement from the company revealed.
It was noted that production from the first phase of the Liza field, located in the 6.6 million acres Stabroek Block, is expected to reach full capacity of 120,000 barrels of oil per day in the coming months, and the first cargo is set to be sold within several weeks.
Only in September, the Liza Destiny floating production, storage and offloading vessel (FPSO) arrived in Guyana’s waters. The vessel is a significant component of the Liza Phase One 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 onboard the vessel.
With the 120,000 barrels expected daily from production in the Liza Phase One Development, it is estimated that Guyana will earn some US$300 million annually.
ExxonMobil had previously said there is potential for at least five FPSO vessels in the Stabroek Block, producing more than 750,000 barrels of oil per day by 2025. Liza Phase Two 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.
Meanwhile, President David Granger has issued a proclamation to declare December 20 as ‘National Petroleum Day‘.
According to the Head of State in a release from the Ministry of the Presidency late Friday evening, the proclamation will remind Guyanese of their duty to protect the country’s patrimony and to ensure the sustainable management of finite hydrocarbon resources.
“…three months ahead of the original schedule, Guyana has become a petroleum-producing state,” he declared.
President Granger noted that oil production will be a transformative process in the country’s economic development. The petroleum sector, he added, will stimulate increased employment and expand services.
The Head of State went on to outline that the coalition Government will unveil a “Decade of Development, 2020-2029” aimed at ensuring that petroleum resources will be utilised to provide the “good life” for all.
“The ‘Decade’ is a ten-year plan to intensify development and improve citizens’ quality of life. Every Guyanese will benefit from petroleum production. No one will be left behind,” he asserted.
The President continued that the coalition Government has taken steps to safeguard the national interest. This includes setting up the Department of Energy to manage the country’s hydrocarbon resources. The Department, he noted, is seeking the best advice, including international best practices as it builds the institutional, legislative and regulatory capability to manage this sector effectively and efficiently.
Another step highlighted by the President is the passage of the Natural Resource Fund Act 2019 in the National Assembly back in January this year. He pointed out that the “Act” provides for ensuring that the country’s resource wealth “…benefits both current and future generations…”, and that it incorporates oversight, accounting, reporting and auditing mechanisms to promote prudent, transparent and accountable management of oil revenues.
“Guyanese, I assure that your Government will manage petroleum revenues prudently to ensure fiscal discipline, financial sector stability, sustainable levels of public debt and low inflation. Withdrawals from the ‘Fund’ will follow a balanced approach, prioritising investment in public education, public health, public infrastructure, public security, social protection and other social services and will support private sector development,” the Head of State posited.
Further, President Granger stated that petroleum production has brought the prospects of a higher quality of life closer to Guyanese households and neighbourhoods. He added that it is a momentous event that should be commemorated for perpetuity.
“Guyana’s future is brighter with the beginning of ‘first oil’. The ‘good life’ for everyone beckons. Let us work together to build a happy and prosperous country for the present and future generations,” the President stressed.
ExxonMobil signed its contract with Guyana in 1999 under the People’s Progressive Party Government.
In 2015, the oil giant announced a significant oil discovery on the Stabroek Block, located approximately 120 miles offshore Guyana. The well encountered more than 295 feet (90 metres) of high-quality oil-bearing sandstone reservoirs.
On May 8, 2015, days prior to General and Regional Elections, the then Government – PPP/C – had announced that ExxonMobil discovered hydrocarbons offshore Guyana while drilling the Liza-1 exploration well at the Stabroek Block. However, now coalition Government, which was in Opposition at the time, had said that the PPP’s announcement was a mere elections gimmick.