US energy giant ExxonMobil said on 3 May it has funded the Liza Phase 2 development offshore Guyana after it received government and regulatory approvals.
Liza Phase 2 will produce up to 220,000 barrels of oil per day and further capitalize on the significant development potential of the Stabroek Block, where ExxonMobil estimates producing more than 750,000 barrels of oil per day by 2025, ExxonMobil said, adding that the US company to proceed with Liza Phase 2 development offshore Guyana.
A total of six drill centres are planned, as well as approximately 30 wells that include 15 production, nine water injection, and six gas injection wells. The Phase 2 startup is expected in mid-2022 and will develop approximately 600 million barrels of oil. Liza Phase 2 is expected to cost $6 billion, including a lease capitalization cost of approximately $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,” ExxonMobil Upstream Oil & Gas Company President Liam Mallon said. “We are actively pursuing significant development potential from numerous discoveries in the Stabroek Block.”
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 utilizing 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 the startup 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 Carron will drill a second well at the Ranger discovery. The Noble Bob Douglas drillship is completing development drilling operations for Liza Phase 1, ExxonMobil said, adding that the company 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, ExxonMobil said. 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 $60 million with more than 500 Guyanese vendors in 2018.
The Stabroek Block is 6.6 million acres or 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 the 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.