Govt was advised to continue oil production – Bynoe

…despite falling Brent oil prices

When it comes to suggestions that Guyana cap oil production until global prices improve, Department of Energy Director, Dr Mark Bynoe has poured cold water on these suggestions.

In an online press conference on Monday, Bynoe confirmed that indeed, Guyana plans to continue oil production as per normal. He noted that the country is pressing full steam ahead based on the advice they received from the experts.
“Having discussed with industry experts, the general impression [is] that Guyana should continue producing at steady-state position with Liza destiny.”
“This is a time to keep production as is and do nothing to jeopardise the operational integrity of Liza. Shutting down existing production can prove costly and detrimental to any future production from that reservoir,” Bynoe added.
Moreover, Bynoe noted that Guyana’s crude oil is only just starting to leave a global footprint that will benefit the country’s reputation as a light crude producing nation.

“We are beginning to see that the Liza Crude is indeed having a global impact, a number of refineries are touching to know how it will perform. That feedback that comes to us gives us a very good idea as to how our crude is performing and how it can be marketed,” Bynoe said.
Guyana had entered an agreement to sell its initial share of crude to Shell’s Barbados subsidiary. Only recently, Guyana received almost US$55 million for its first one million barrels of oil sold.
It also received its first royalty payment for the first quarter of the year. But given the market volatility, there has been concern that if Guyana continues selling its oil it would get less than it would in stable conditions.
Bynoe also explained that Guyana’s oil is sold on ‘dated Brent’, which means payment of the average price at least 10 days after the oil is delivered.
Guyana only became an oil-producing nation last year, with Exxon so far making 16 oil finds in the Stabroek Block. I’m 2019, the company made five discoveries. These discoveries have pushed the total estimated recoverable barrels of oil equivalent to over six billion.
In addition, Exxon has its Liza Phase Two project, which will contain approximately 30 wells and which has already received the requisite approval from the Environmental Protection Agency (EPA). Payara, meanwhile, is expected to have 45 wells that include production wells, water and gas injection wells.
But the onset of the global coronavirus pandemic has had a serious impact not just on lives but also the global economy and specifically, oil. With it came a massive slump in demand and an oversupplied market.
Brent crude is currently trading at around US$30 per barrel. While this is a recovery considering how low it previously sank, it is also a steep drop compared to a few months ago when it was being traded at over US$50.
Since oil production started, Guyana produces an average of between 75,000 and 80,000 barrels of oil per day in the Liza field. Moreover, production is expected to be ramped up to 120,000 barrels per day by next month.
Meanwhile, Guyana’s second lift of 1 million barrels of oil is expected in a couple of weeks. This comes on the heels of Guyana’s first lift of its 1 million barrel share of the crude oil in February of this year.