Oil production begins at Guyana’s 2nd 220,000bpd offshore development

…enhanced earnings to drive country’s development – Govt

Guyana’s oil production capacity will soon reach 340,000 barrels per day (bpd) following the commencement of production at ExxonMobil’s second offshore oil development on the Stabroek Block – Liza Phase 2 project.

The United States oil major said on Friday that production at the Liza Unity Floating, Production, Storage and Offloading (FPSO) vessel is expected to reach its target of 220,000 barrels of oil later this year, as operations continue to be brought safely online.

This now adds to the more than 120,000 bpd capacity at the Liza Destiny FPSO, which began production in December 2019 and is now delivering at better than design capacity.
The Liza Unity FPSO arrived in Guyana in October 2021. It is moored in water depth of about 1650 metres and will be able to store around 2 million barrels of crude. The Liza Unity is the world’s first FPSO to be awarded the SUSTAIN-1 notation by the American Bureau of Shipping in recognition of the sustainability of its design, documentation and operational procedures.
President of ExxonMobil Upstream Oil and Gas, Liam Mallon said with unparalleled project execution, the company now has two production facilities operating offshore Guyana.
“We are collaborating closely with the Government and people of Guyana to develop this world-class resource responsibly, helping to meet the world’s energy needs and delivering enhanced value for all stakeholders at a record pace and well ahead of the industry average,” Mallon noted.
Meanwhile, ExxonMobil Guyana’s Production Manager, Mike Ryan, said the commencement of production on Liza Unity is a culmination of years of hard work by thousands including Guyanese.
“The Unity team has shown tremendous resilience. From the start of engineering through to the delivery of Unity to Guyana [in] three and half, or so, years during a global pandemic [and] taking on lessons learned from Liza Destiny start up, getting better, a spirit of achieving excellence. I’m just so proud of the team and what they have accomplished,” Ryan posited.

Govt welcomes
On the other hand, the Government of Guyana welcomed the announcement on the start of production at the second offshore development from the Liza Unity vessel.
“The Government of Guyana and citizens welcome the operation of this new FPSO to sustainably extract and manage the country’s oil and gas resources, which will further enhance earnings from this sector to drive Guyana’s infrastructure development and improve the delivery of services to all citizens,” Natural Resources Minister Vickram Bharrat said in a missive on Friday.
According to Bharrat, the increased total daily capacity of oil augers well for Guyana, especially on the heels of operationalising the Local Content Secretariat and the Natural Resources Fund, in keeping with the Santiago Principles of transparency and accountability within the petroleum sector.
It was further noted that the Government will be taking all necessary steps to ensure that all Guyanese benefit from the earnings derived from the petroleum sector. To this end, the Natural Resources Ministry has been tasked with coordinating and working closely with international partners, local regulatory agencies, and key stakeholders within the petroleum sector to ensure the sector performs optimally in keeping with internationally recognised best practices.
The US oil giant’s operationalisation of two FPSO comes almost seven years after first discovering oil offshore Guyana.
The Stabroek Block’s recoverable resource base is currently estimated at more than 10 billion oil-equivalent barrels and has the potential to support up to 10 projects.
Exxon anticipates that four FPSOs with a capacity of more than 800,000 barrels per day will be in operation on the Stabroek Block by the end of 2025.
Payara, the third project in the Stabroek Block, is expected to produce approximately 220,000 barrels of oil per day using the Prosperity FPSO vessel, which is currently under construction.
The field development plan and application for environmental authorisation for the oil company’s the fourth project in the block – the Yellowtail project – have been submitted for Government and regulatory approval.
In fact, Vice President Bharrat Jagdeo recently disclosed that the review of the Yellowtail Field Development Plan is expected to be completed by next month, after which the licence would be awarded once all the criteria have been met. He said a draft licence has already been crafted as authorities await completion of the assessment.
Meanwhile, more than 3500 Guyanese are currently supporting ExxonMobil’s activities in Guyana. The oil major and its direct contractors spent approximately $219 million with more than 880 local suppliers in 2021, a 37 per cent year-over-year increase.
ExxonMobil’s local affiliate Esso Exploration and Production Guyana Limited (EEPGL) is operator and holds 45 per cent interest in the Stabroek Block. Hess Guyana Exploration Ltd holds 30 per cent interest and CNOOC Petroleum Guyana Limited holds 25 per cent interest. (G8)