… no dates for commencement of oil production – Harmon
In light of the June 30 “world-class discovery” of hydrocarbon reserves which is the equivalent to some 800 million to 1.4 billion barrels of crude oil offshore Guyana, there has been much buzz locally and internationally about Guyana’s emerging oil sector.
However, officials have stated that there is a process to go through before actual production commences.
Minister of State Joseph Harmon told a post Cabinet briefing on Wednesday at that production dates have not been indicated as yet by US-based ExxonMobil.
“The company said they are still in a phase which will require several other steps to be taken before they can arrive at decisions with respect to production dates but we are hopeful that those dates can be compressed so that we can have the benefit of exploration and the benefit of production very quickly,” Harmon stated.
Cabinet was briefed by a team from ExxonMobil on Tuesday last. The briefing saw Cabinet members being brought up to date with the operations of the US-based oil company and covered an array of activities including the overall preparation of eventual production in the coming years.
“The company outlined plans for the proposed usage of a floating production storage off-loading facility during the production phase and went through plans for training and integrating Guyanese into the various spheres of activities associated with petroleum exploration and production,” the Minister related.
Moreover, Harmon stated that Cabinet was briefed in detail about the potential for, and the utilisation of, the “associated” natural gas that was discovered in the Well. He noted that some areas that are being looked at to use the gas as a form of power generation, fertilisation production and the production of Liquid Natural Gas (LNG) for domestic use.
However, Jeff Simmons, Country Manager of Esso Exploration and Production Guyana Limited (EEPGL) – the local arm of ExxonMobil, told a Parliamentary Committee on Natural Resources later on Wednesday that it would not be feasible to utilise the gas because of the small amount found.
“Right now, the only real economics to the gas are to put it back in the ground and keep it there until we have a more significant gas find that we can generate some kind of plateau of gas production… The difficulty with associated gas instead of a pure gas reservoir is that a lot of the monetisation of that gas requires investment which requires the gas stream that’s consistent and expanded over more than five or six or seven years,” Simmons, who was among the team that briefed Cabinet on Tuesday, explained.
According to the official, the difficulty is getting sufficient gas to build a LNG facility over a long period. Moreover, he noted that EEPGL is carrying out a number of studies and will report to Government on a number of things that could potentially work with the gas.
The US-based oil and gas exploration giant announced in June the drilling results from the Liza-2 well, the second exploration Well in the Stabroek block located some 120 miles offshore Guyana, confirmed a “world-class discovery” of oil with a recoverable resource of between 800 million and 1.4 billion oil-equivalent barrels.
This is the second major announcement of oil find coming from ExxonMobil that has been conducting explorations off the shores of Guyana. On May 20, 2015, the company disclosed a significant oil discovery on the Stabroek Block after its well Liza-1 encountered more than 295 feet of high-quality oil-bearing sandstone reservoirs.
Against this backdrop, Simons told the Parliamentary Committee that EEPGL has already applied for an environmental permit and then would put arrangements in place to begin oil extraction and production by 2021.