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Wednesday, February 24, 2021

Guyana approves ExxonMobil’s 220,000 bpd Payara Development, company moves to FID

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The Guyana Government on Wednesday announced the approval of the 220,000 bpd Payara Development – ExxonMobil’s third project offshore the South American country, paving the way for the company’s Final Investment Decision (FID).

The $9 billion development, targeted for start-up in 2024, will focus on an estimated resource base of about 600 million oil-equivalent barrels. Ten drill centers are planned along with up to 41 wells, including 20 production and 21 injection wells.

Prior to the approval, the Government of Guyana had decided to review the work already undertaken by the Department of Energy and Bayphase Oil and Gas Consultants on the Payara Project so that the interest of all Guyanese is protected and in keeping with international transparency and accountability standards. 

“Most importantly, the Canadian funded team of technical experts assessed the project to ensure that all relevant regulations are complied with and that they can be enforced,” Guyana’s Ministry of Natural Resources said on Wednesday. “This included environmental standards and reservoir management to safeguard the interests of the people of Guyana and that their resources are developed in a sustainable and responsible manner to the benefit of the country.”

Further, in approving the Payara production license, the government said it insisted that routine flaring is strictly prohibited without the approval of the EPA. Flaring to maintain oil production will not be permitted, it said. “ExxonMobil will pay the Government for the cost of gas wasted during flaring and will also be subject to fines under the EPA related to emissions from flaring,” the ministry said. 

The EPA, it stated, will establish a framework for a price on carbon to conform with international standards.

Additionally, the government said it has insisted that ExxonMobil manage produced water to an international standard to minimize the effects of discharging the liquid. The company, it said, is required to update its base design to include tie-in points and space for produced water injection equipment. It will carry out a study overseen by the Minister of Natural Resources to be completed by the first quarter of 2021 to examine the safe and efficient reinjection of produced water, including the effects on the reservoir. “This is in keeping with government’s commitment to preserve marine life and water quality,” the ministry stated.

Meanwhile, ExxonMobil said it remains committed to its exploration and production activities in the South American country.

“ExxonMobil is committed to building on the capabilities from our Liza Phase 1 and 2 offshore oil developments as we sanction the Payara field and responsibly develop Guyana’s natural resources,” said Liam Mallon, President of ExxonMobil Upstream Oil & Gas Company. “We continue to prioritize high-potential prospects in close proximity to discoveries and maximize value for our partners, which includes the people of Guyana.”

ExxonMobil’s first offshore Guyana project, Liza Phase 1, began producing in late 2019, well ahead of the industry average for development time. The company said Liza Phase 2 remains on track to begin producing oil by early 2022.

“It will produce up to 220,000 barrels of oil per day at peak rates using the Liza Unity FPSO, which is under construction in Singapore,” the company said.

ExxonMobil said it is evaluating additional development opportunities in the Stabroek Block, including Redtail, Yellowtail, Mako and Uaru resources, and plans to have five drillships operating offshore Guyana by the end of this year.

“As new projects proceed, investment in the Guyana economy increases,” the company stated. “More than 2,000 Guyanese are now supporting project activities on and offshore, a 50 percent increase since 2019. ExxonMobil and its prime contractors have spent over $300 million with more than 700 local companies since 2015.”

The company said more than 2,500 Guyanese companies are registered with the Centre for Local Business Development, which was founded by ExxonMobil and its co-venturers in 2017 to build local business capacity to support global competitiveness.

The Stabroek Block is 6.6 million acres (26,800 square kilometers) with current discovered recoverable resources estimated at more than 8 billion oil-equivalent barrels. The 18 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 2026.

ExxonMobil affiliate Esso Exploration and Production Guyana Limited is operator and holds 45 percent interest in the Stabroek Block. Hess Guyana Exploration Ltd. holds 30 percent interest and CNOOC Petroleum Guyana Limited, a wholly owned subsidiary of CNOOC Limited, holds 25 percent interest.

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