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Guyana begins oil production at Liza Phase Two without full coverage insurance
The Liza Unity FPSO begins oil production in the Stabroek Block
Kaieteur News – American oil giant, ExxonMobil Corporation, announced yesterday that it has commenced oil production at Guyana’s second offshore development area called Liza Phase Two in the Stabroek Block. Along with the Liza Phase One Project, this will bring total production capacity to more than 340,000 barrels per day. This second project comes only seven years since the country’s first discovery in 2015.
Exxon said production at the Liza Unity floating, production, storage and offloading (FPSO) vessel is expected to reach its target of 220,000 barrels of oil later this year, as operations continue to be brought safely online. It adds to the more than 120,000 barrels per day of capacity at the Liza Destiny FPSO, which began production in December 2019 and is now delivering at better than design capacity.
“We are collaborating closely with the government and people of Guyana to develop this world-class resource responsibly. Helping to meet the world’s energy needs and delivering enhanced value for all stakeholders at a record pace and well ahead of the industry average,” said Liam Mallon, President at ExxonMobil Upstream Oil and Gas. He added, “With unparalleled project execution, we now have two production facilities operating offshore Guyana.”
ExxonMobil said it anticipates that four FPSOs with a capacity of more than 800,000 barrels per day will be in operation on the Stabroek Block by year-end 2025.
Expounding on upcoming projects, the American company said Payara, the third project in the Stabroek Block, is expected to produce approximately 220,000 barrels of oil per day using the Prosperity FPSO vessel, which is currently under construction. The field development plan and application for environmental authorisation for the Yellowtail project, the fourth project in the block, have been submitted for government and regulatory approval.
Exxon said timely development of these additional projects and continued exploration success offshore will enable the steady advancement of Guyanese capabilities and enhanced economic growth while adding that more than 3,500 Guyanese are now supporting ExxonMobil’s activities in Guyana.
Kaieteur News previously reported that the Liza Unity arrived in Guyana in October 2021. It is moored in water depth of about 1,650 metres and will be able to store about two million barrels of crude. The Liza Unity is also the world’s first FPSO to be awarded the SUSTAIN-1 notation by the American Bureau of Shipping in recognition of the sustainability of its design, documentation and operational procedures.
Importantly, operations have commenced at the Liza Phase Two project in the absence of Guyana being provided any full coverage insurance to cover costs associated with an unmitigated oil spill or similar environmental disaster.
Following the announcement by ExxonMobil, its partner in the block which holds a 30 percent working interest, Hess Corporation, said it is proud to be involved in the successful development of a world class oil resource. The entity’s CEO, John Hess in brief remarks said, “We look forward to continuing to work with the Government and the people of Guyana to realise the remarkable potential of the Stabroek Block for the benefit for all stakeholders. The world will need these low cost oil resources to meet future energy demand and help ensure an affordable, just and secure energy transition.”
As for the Ministry of Natural Resources, it welcomed the operationalisation of the Liza Unity FPSO while noting that it increases earnings from the oil sector. Specifically, Natural Resources Minister, Vickram Bharrat said earnings from the new FPSO coming on stream will drive Guyana’s infrastructure development and improve the delivery of services to all citizens.
Minister Bharrat pointed out that the increased total daily capacity of oil augers well for Guyana, especially on the heels of operationalising the Local Content Secretariat and the Natural Resources Fund, in keeping with the Santiago Principles of transparency and accountability within the petroleum sector. He said the government will continue to work closely with the Stabroek Block partners to ensure the safe development of the country’s oil resources.
ExxonMobil affiliate, Esso Exploration and Production Guyana Limited (EEPGL), is operator of the Stabroek Block and holds a 45 percent working interest. Hess Guyana Exploration Ltd. holds 30 percent interest and CNOOC Petroleum Guyana Limited holds 25 percent interest.
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