Guyana vows to honour ExxonMobil deal as countdown to first oil begins

Must Read

OilNOW is an online-based Information and Resource Centre

Speaking at a reception on Tuesday to mark the start of the development phase of Liza Phase 1 in Guyana, the country’s Minister of Natural Resources, Raphael Trotman, said responsible governments do not arbitrarily redefine contract terms with a company merely because it made significant oil discoveries.

Mr. Trotman’s statement is a direct reaction to calls which have been made by some in Guyana for the Production Sharing Agreement between the South American country and ExxonMobil to be renegotiated.

Guyana’s Minister of Natural Resources, Raphael Trotman

Addressing colleague ministers, ExxonMobil officials, special invitees and the media, Mr. Trotman stated, “Those of us here tonight are the purveyors of hope and happiness and it is worth restating that ExxonMobil, a company that has been in Guyana since 1999, has the same or very similar contractual terms as does Anadarko, CGX, Repsol, Ratio, Eco Atlantic and Mid-Atlantic, to name a few.”

Elaborating further on what that means regarding the agreement the country has with the US oil major, he said, “In that regard they will enjoy the same rights and obligations as every other company that has been contracted to explore and develop our hydrocarbons.”

The company initially signed an agreement with Guyana in 1999 after which it went on to make the giant Liza discovery in 2015 – the largest find in the world for that year. ExxonMobil has made seven discoveries offshore Guyana totaling more than 3.2 billion barrels of recoverable crude. This has prompted some in the country to call for a renegotiation of the deal in order for Guyana to get more than what was agreed to when the contract was signed.

But the Natural Resources Minister sees such an approach as irresponsible and not reflective of how organized states are governed.  “That they were the first to find a large deposit should not redefine their contractual terms or place them in any position lesser than that enjoyed prior to the discovery. For Government to do otherwise is just not how responsible and well organised and governed states function,” he pointed out.

Highlighting that the small country of 750,000 people has been waiting for more than 50 years – having gained independence in 1966 – to realize its full potential, Mr. Trotman said oil production paves the way to develop a modern, peaceful and cohesive state. “One in which every man, woman and child, without exception, reservation, and/or discrimination of any kind, is able to enjoy the full and equal benefits of the bounty we are about to be bestowed.”

Also in attendance at the reception to mark the start of the Liza development offshore was ExxonMobil Development Company Vice President, Lisa Waters, Country Manager, Rod Henson, and Ministers of State, Business and Public Infrastructure; Joseph Harmon, Dominic Gaskin and David Patterson respectively.

As reported by OilNOW on June 1, ExxonMobil spudded the first of 17 wells for the Liza Phase 1 development in Guyana at the beginning of May in what was described as a landmark occasion by the company. The first well also happens to be a ‘producer well’ and was drilled almost 3 years to the day the giant Liza discovery was announced back in 2015.

The development wells are being drilled by the Noble Bob Douglas which began spudding the first well following its unsuccessful search for oil at Sorubim-1 in April, some 83 nautical miles off the Guyana coast.

450 million barrels of oil will be produced in Phase-1 Liza development

8 wells at Liza will produce more oil than Delaware Basin’s 1,400 – Hess

The Liza Phase 1 development is located approximately 120 miles offshore in water depths of 1500 – 1900 meters. Four drill centers are envisioned with 17 wells in total; eight production wells, six water injection wells and three gas injection wells.

First oil is expected by March 2020 although some analysts believe this can come sooner.

Engineering for Liza FPSO advancing – SBM Offshore

Watch video for more on the landmark drilling of the first development well 


- Advertisement -

Latest News

Energy conference set to wrap up with major local content seminar by SBM Offshore Guyana

SBM Offshore Guyana is set to host a ‘Let’s Talk Local Content’ seminar today at the Guyana Energy Conference...

More Articles Like This