ExxonMobil, operator of Guyana’s Stabroek Block, is well positioned to optimise its offshore projects, thereby delivering hundreds of millions in additional annual revenues. Liza Phase 2 and Payara, ExxonMobil’s second and third Stabroek Block projects, each have the capacity to be debottlenecked by 10%.
Chief Executive Officer of Hess Corporation, John Hess recently stated this during Bernstein’s 38th Annual Strategic Decisions Conference in New York.
Debottlenecking is a process that provides for adjustments to an operation’s physical infrastructure to increase its efficiency.
Both the Liza Phase Two and Payara projects have nameplate oil production capacity of 220,000 barrels per day (bpd). Debottlenecking of 10% would add about 22,000 extra bpd to each project. Collectively, this amounts to 44,000 bpd in debottlenecked capacity.
ExxonMobil recently successfully undertook debottlenecking at the Liza Phase 1 project which had started out with nameplate capacity of 120,000 barrels per day. It now has oil production capacity of around 140,000 barrels per day – about 16% higher.
Debottlenecking of all three projects would therefore collectively add about 64,000 bpd to production offshore Guyana.
So, while production for these projects, based on combined nameplates, amounts to 560,000 barrels per day, debottlenecking would take that number to 624,000 bpd.
The value of debottlenecking is significant. With the example of Liza Phase 1, 20,000 extra bpd results in US$30 million in additional revenues in the duration of one month. With the price of oil sustained over US$100 a barrel over the last three months, this means that 20,000 extra bpd resulted in more than US$60 million in additional revenues for the month of May alone. With all three projects debottlenecked, that number would be somewhere over US$180 million in one month.
The government has urged the Stabroek Block partners to tailor their operations to be consistent with its goal of aggressively producing oil to ensure Guyana benefits from its petroleum resources as the world transitions.
In addition to Liza Phases 1 and 2, and Payara, ExxonMobil has received approval for the Yellowtail project, on track for first oil in 2025. It also plans to move forward with the proposed Uaru development, which it could startup as early as 2026, pending government approval.
ExxonMobil intends to have six FPSOs operating offshore by 2027, with oil production totaling 1.2 million barrels per day. The partners see potential for 10 floaters to develop the discovered resource at the Stabroek Block.