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In absence of a Depletion Policy, Exxon ramps up plans to drain Guyana’s oil
By Kiana Wilburg
Institutions such as the World Bank, the United Nations Development Fund (UNDP), and the International Monetary Fund (IMF), have all acknowledged that the authorities of the State have the fundamental right to determine how fast or how slow their country’s oil and gas resources should be developed.
In fact, the UNDP had commissioned a report in 2016 for Guyana, which recommended that the government pays attention to the rate at which the oil resources could be depleted. The adoption of a policy that regularizes the pace of production by ExxonMobil and other oil companies operating offshore Guyana, was also suggested.
But in the absence of this crucial policy, ExxonMobil and its partners, Hess Corporation and CNOOC/NEXEN, are steaming ahead with plans to extract Guyana’s oil as quickly as possible from the Stabroek Block.
Oil production was initially projected to occur between January and March of 2020. But due to ExxonMobil’s impressive progress on all the necessary installations, that target has been brought forward to December, 2019. While these plans are moving ahead for oil production from the Liza Phase One Project, ExxonMobil is ramping up its development plans for Liza Phase Two.
During its third quarter earnings call this week, Hess Corporation disclosed that development drilling of Liza Phase Two will commence in the first quarter of 2020 with first oil expected by mid-2022. Pending government approvals, ExxonMobil is also eager to start a third oil production field on the Stabroek block called Payara. It is expected to utilize a Floating Production Storage and Offloading (FPSO) vessel with a gross production capacity of 220,000 barrels of oil per day. If the government grants the required approvals in keeping with the company’s expectations, oil can be produced from Payara as early as 2023.
As it pushes ahead with those plans, ExxonMobil is also conducting appraisals of other wells to determine their productivity, all in an effort to maximize profits for its shareholders as quickly as possible. Two of these wells include the Ranger Two and Hammerhead.
But that’s not all Exxon is busy doing on the Stabroek Block. It is also preparing to send the Noble Tom Madden drillship to drill another prospect called Uaru-1. It is located approximately 10 miles east of the Liza-1 well. Further to this, Kaieteur News understands that a fourth drillship, the Noble Don Taylor, is expected to arrive in Guyana to drill the Mako-1 exploration well, located approximately six miles south of the Liza-1 well.
Also on the block, Hess Corporation disclosed that the Stena Carron drillship is currently conducting well operations on the Ranger-2 appraisal well. Following Ranger-2, the rig will move to the previously announced Yellowtail-1 discovery to conduct a production test.
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