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Thursday, November 26, 2020

JUST IN: Guyana to earn 2% royalty from Liza field production; project deemed “technically sound”

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Guyana will be earning a 2% royalty on gross earnings from the Liza oil field production.

This will come, along with a 50/50 Production Sharing Arrangement, in which Guyana earns half of the ‘profit oil’ revenue while the other half goes to ExxonMobil, Hess and Nexen to be divided among them according to their stake in the joint venture investment. ExxonMobil’s subsidiary Esso Exploration and Production Limited (EEPGL) is operator and holds 45 percent interest, Hess Guyana Exploration Ltd. holds 30 percent interest and Chinese company CNOOC Nexen Petroleum Guyana Limited holds 25 percent interest.

It is expected that the Government of Guyana will approve the Production License for the Liza development within a few weeks. Contingent upon this approval were findings of a study on the ExxonMobil development plan done by Worley Parsons. The study has determined the project to be technically sound.

The Government of Guyana had contracted the Australian resources and energy consultant firm to review ExxonMobil’s initial development plan in preparation for petroleum production. This review was necessary for determining whether the oil giant would be granted a production license.

The joint venture partners are expected to make their Final Investment Decision for the Liza development soon, following their receipt of the production license.

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