ExxonMobil makes 18th oil discovery offshore Guyana

…Local Content Panel begin work, policy to be drafted – Govt

ExxonMobil has made its 18th oil discovery offshore Guyana and the second discovery for the year, bolstering the already 8 billion oil-equivalent barrels estimated to be contained in the Stabroek Block.

The announcement was made by Natural Resource Minister Vickram Bharrat, who released a statement on Tuesday revealing that the find was made at the Redtail-1 exploration well. According to him, exploration efforts from ExxonMobil continue to turn up high-quality reservoirs in close proximity to their previous discoveries.
“The Government of Guyana welcomes the Redtail discovery and remains committed to the development of Guyana’s oil and gas resources… the ExxonMobil exploration programme continues to identify high-quality reservoirs in close proximity to previous discoveries. This will play an integral part in our long-term growth plans which will bring significant value to Guyana’s development,” he said in the statement.
“This discovery comes in wake of our country’s Budget for the year 2020 and complements the number of progressive measures announced by Dr Irfaan Ali, President of Guyana and Vice President Dr Bharrat Jagdeo. I assure you that the Government will do everything possible to ensure benefits from this and other sectors enhance the lives of all our people,” he added.
According to Bharrat, the discovery complements the Lisa-1 well, which he pointed out has already netted Guyana US$150 million ($31.3 billion) from three oil lifts and two royalty payments.
The Liza 2 well is expected to start production in early 2022 from the Liza Unity Floating Production Storage and Offloading (FPSO) vessel with a capacity to produce up to 220,000 barrels of oil per day, the Minister said.
“Additionally, upon successful conclusion of the negotiations and approval, Payara will follow Liza 1 & 2 with Prosperity FPSO, also producing 220,000 barrels of oil. The Government of Guyana is committed to ensuring Guyanese benefit from this sector.”

The Minister said that the Government’s commitment can be seen in the appointment of a local content panel, which he revealed has already started its work. Moreover, a policy document will be drafted to replace the much-criticised one drafted by the previous A Partnership for National Unity/Alliance For Change (APNU/AFC) Government.
“The panel has already commenced work in this regard and will soon be holding consultations and workshops with the relevant stakeholders with the intention to draft a policy document and eventual local content legislative framework,” he explained.
“These significant discoveries in the new and emerging oil and gas sector will provide the impetus to the Government’s effort to re-vitalise and re-capitalise the traditional productive sectors so that Guyanese can enjoy progress and contribute to wealth generation under the People’s Progressive Party Administration.”
Last year, Exxon made five discoveries offshore Guyana. Discoveries were made in the Tilapia-1 well, Haimara-1, Yellowtail-1, Tripletail-1 and the Mako-1 well. These discoveries had pushed the total estimated recoverable barrels of oil equivalent to over six billion.
The company also discovered oil in the Uaru-1 well back in January 2020. Uaru was ExxonMobil’s 16th oil discovery in the Stabroek Block. The Uaru-1 well was drilled in a new reservoir, encountering approximately 94 feet (29 metres) of high-quality oil-bearing sandstone reservoir and was drilled in 6342 feet (1933 metres) of water.
And in July of 2020, ExxonMobil’s partner in the Stabroek Block, Hess Corporation had revealed that two high-quality reservoirs offshore Guyana were found in 2020 around the time the company was appraising the Yellowtail-2 well.
So far, Guyana has received three cargo lift payments and two royalty payments courtesy of the Liza-1 well for which production started last year. This means approximately US$150 million has been deposited in the Natural Resources Fund housed in the United States (US) Federal Reserve.
However, this money has remained untouched, as the protracted political crisis that followed elections sabotaged any attempt to set up a system for withdrawing funds. The Natural Resource Fund Act stipulates that various committees must be established to provide oversight for the fund. It is expected that this legislation will be reviewed by the current Government.