Latest update November 5th, 2024 1:00 AM
31.4 million barrels of oil extracted from Stabroek Block in first year
A breakdown of how the first year of production was divided between Guyana and the ExxonMobil led consortia.
Kaieteur News – The Stabroek Block has seen more than 31.4 million barrels of oil being produced in its first year of production from the Liza Destiny Floating, Production, Storage and Offloading (FPSO) in Guyana’s offshore Exclusive Economic Zone (EEZ).Looking ahead, the country is now poised to uplift six million barrels of oil this year as its projected entitlement from production in the Stabroek Block—having uplifted five since production began in December 2019—but the country remains without a marketing firm for its crude.
Minister of Natural Resources, Vickram Bharrat, yesterday told this publication that work on the drafting of the Terms of Reference (ToR) for that initiative are still ongoing, as such, the document is still to be finalized.
Minister of Natural Resources, Vickram Bharrat
“We are still drafting the Terms of Reference,” he said, before adding that the information will be made available in due course.
An earlier request for proposals last month had been cancelled, making this the third effort by government to secure a marketing firm.
The People’s Progressive Party/Civic Administration (PPP/C) in August 2020—following the swearing in of President Irfaan Ali—cancelled the original tender, saying the previous administration’s process was flawed.
ExxonMobil’s consortium partner in the Stabroek Block, Hess Corporation, was awarded the country’s last entitlement of the country’s share of crude, in the process getting its highest earnings for a shipment since the country commenced production.
The country received US$61.1M for the cargo that was lifted on February 5, 2021, from the Liza Destiny FPSO unit that is working the Liza-1 well.
Hess Corporation had also lifted the country’s fourth entitlement in January last while the first three entitlements went to Shell in a restricted opening tender.
This publication understands that Guyana had scheduled five lifts of its entitlement in 2020 but did not achieve this because of a lower than expected production from the Stabroek Block project. This was due to a recurring problem with a gas compression unit.
Output from the Liza Destiny, according to information released by the Ministry on Thursday, reveals that production up to January this year saw the operation extracting 31.5 million barrels of oil.
Production fell sharply in June and July last year to just about 1.5 million barrels of crude each month—less than half of the FPSO’s capacity.
The previous three months production—from February to May 2020—averaged 2.2 million barrels, while production in August rebounded to 2.1 million barrels of crude with a steady increase in production despite ongoing problems with the FPSO’s flash gas compressor, which has led to the company’s increased flaring above pilot levels.
In October last year, production—according to the information released by the Minister—stood at 2.9 million barrels, maintaining a upward trajectory and reaching a high of 2.9 million barrels of oil.
The Ministry had a day earlier announced that earnings from its sale of oil for its first year of production. Deposits in the Natural Resources Fund total just about US$246.5M in profits with $21.5M earned in royalties.
According to the information released by the Ministry of Natural Resources, the country obtained its first shipment of oil in February 2020, collecting 1,006,321 barrels of crude and sold it for US$54.9M.
The second shipment earned the least so far with the country selling its 980,854 barrel take for just over US$35M.The highest earnings to date, comes from the February 2021 shipment of 997,420 barrels which was sold for US$61M.
With Guyana uplifting just over five million barrels of oil to date year, it would mean that—the last being in February, ExxonMobil and their partners uplifted 27 million barrels of oil.
Using a world market average price of US$60, it would mean that ExxonMobil and its partners would have earned an estimated $1.6B, while Guyana got US$246.5M
Under the Production Sharing Agreement (PSA) signed with ExxonMobil Subsidiary, Esso Exploration and Production Guyana Limited (EEPGL) and its partners—Hess Corporation and China National Offshore Oil Company—the country will share profits 50/50, minus royalty and cost oil.
The two percent royalty accepted by Guyana under its PSA with the oil consortium has been long criticized domestically and internationally by experts in the field.
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