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Stabroek Block produces 1.7M barrels of oil in January; Exxon collects over 1M for cost recovery

Apr 03, 2020 News

According to the latest Report on Petroleum Production and Revenues (RPPR), the Liza Phase One Project on the Stabroek Block produced 1,745,930 barrels of oil for January 2020, or 56,320 barrels of oil per day.
Of the 1,745,930 barrels produced, the Ministry of Finance which prepared the report said that a total of 1,020 barrels was used for facility fill.
The Ministry said as a result of the first lift of crude oil in January 2020 by ExxonMobil, this volume of crude will remain in the hose and piping between cargo tanks and the crude offloading hose point that connects to the offloading vessel.
With respect to the actual lift by ExxonMobil, the Ministry said that this amounted to 1,046,897 barrels. This lift included the 21,592 barrels of Marine Gas Oil and Intermediate Fuel Oil that was loaded onto the Liza Destiny in Singapore for commissioning activities. The Ministry was keen to note however that the lift by ExxonMobil was completely allocated to cost recovery while noting that the American oil company is still owed a few more barrels to cover the allotted sum that was supposed to be recovered for that time.
Expounding further, the report specifically noted that Article 11.2 of the Petroleum Agreement for the Stabroek Block, states that in any month during which crude is produced and sold, a maximum of 75 percent of crude produced after losses and operations (PALO), can be allocated to permissible recoverable costs incurred by the Contractor.
Taking this into account, it was stated that cost recovery based on the 75 percent ceiling amounted to 1,308,682 barrels, hence all 1,025,305 barrels produced and sold from the Liza field by ExxonMobil was allocated to cost oil.
Since it did not recover the full costs, the Ministry noted that Exxon under lifted 409,251 barrels at the end of January 2020.
Furthermore, the 719,605 barrels of PALO remaining after the allocation to cost oil, i.e. 1,744,910 – 1,025,305, is referred to as profit oil, of which the government is entitled to 50 percent, or 359,802 barrels.
It was further noted that there was no change in the volume of crude used as ballast in the cargo tanks. Additionally, there were no operational losses reported for this period and no crude was used for fuel or transportation in petroleum operations.

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