Liza Phase 2 development offshore Guyana funded

Source: press release, 3 May 2019

‘Liza Unity’ FPSO
‘Liza Unity’ FPSO (photo: Hess)

ExxonMobil and Hess Corporation report the funding of the Liza Phase 2 development offshore Guyana after receiving government and regulatory approvals. Liza Phase 2 will produce up to 220,000 barrels of oil per day and further capitalise on the significant development potential of the Stabroek Block, where the Stabroek Block partners estimate they will produce more than 750,000 barrels of oil per day by 2025.

A total of six drill centres are planned as well as approximately 30 wells, including 15 production, nine water injection and six gas injection wells. Phase 2 startup is expected in mid-2022 and will develop approximately 600 million barrels of oil. Liza Phase 2 is expected to cost USD 6 billion, including a lease capitalisation cost of approximately USD 1.6 billion, for the Liza Unity floating production, storage and offloading (FPSO) vessel.

“With the government of Guyana and our partners, ExxonMobil is bringing industry-leading upstream capabilities to build upon Phase 1 and further develop the shared value of Guyana’s resources,” says Liam Mallon, president of ExxonMobil Upstream Oil & Gas Company. “We are actively pursuing significant development potential from numerous discoveries in the Stabroek Block.”

“We are excited to achieve another significant milestone in the development of the Stabroek Block,” Hess Corporation CEO John Hess says. “We look forward to continuing to work with the Government of Guyana and our partners to realise the extraordinary potential of this world class resource.”

Liza Phase 1 remains on track to achieve first oil by the first quarter of 2020. It will produce up to 120,000 barrels of oil per day at peak rates utilising the Liza Destiny FPSO, which is expected to arrive offshore Guyana in the third quarter of 2019.

Pending government and regulatory approvals, a final investment decision is expected later this year for a third phase of development, Payara, which is expected to produce between 180,000 and 220,000 barrels per day with start-up as early as 2023. ExxonMobil is evaluating additional development potential in other areas of the Stabroek Block, including at the Turbot area and Hammerhead.

By the end of 2019 ExxonMobil will have four drillships operating offshore Guyana. Following well completion activities at the recently announced Yellowtail discovery, the Noble Tom Madden will move to the Hammerhead-2 well. The Stena Carron is completing a well test at the Longtail-1 discovery, and will then move to the Hammerhead-3 well.

Later in 2019, the Stena Carronwill drill a second well at the Ranger discovery. The Noble Bob Douglasdrillship is completing development drilling operations for Liza Phase 1. ExxonMobil will add another exploration drillship, the Noble Don Taylor, in the fourth quarter of 2019.

As the projects proceed, the partners’ investment in the Guyanese economy continues to increase. The number of Guyanese nationals supporting project activities more than doubled in 2018 to more than 1,000. ExxonMobil and its co-venturers spent nearly USD 60 million with more than 500 Guyanese vendors in 2018. More than 1,500 Guyanese companies are registered with the Centre for Local Business Development, which was founded by ExxonMobil and its co-venturers in 2017 with the mission of supporting local businesses to become globally competitive.

The Stabroek Block is 26,800 square kilometres. Current discovered recoverable resources are estimated at more than 5.5 billion barrels of oil equivalent. The 13 discoveries on the block to date have established the potential for at least five FPSO vessels producing more than 750,000 barrels of oil per day by 2025. ExxonMobil affiliate Esso Exploration and Production Guyana Limited is operator and holds 45% interest in the Stabroek Block. Hess Guyana Exploration Ltd. holds 30% interest and CNOOC Petroleum Guyana Limited, a wholly owned subsidiary of CNOOC Limited, holds 25% interest.