Guyana is now an oil producing nation
Dated: December 20th, 2019
The South American country of Guyana has joined the league of petroleum producing nations with the official start of oil production at the Liza Phase 1 Development, announced on Friday December 20 by President David Granger, who proclaimed the day as ‘National Petroleum Day’.
This significant milestone comes approximately five years after the first giant discovery at the Liza field was announced in May 2015, and three months ahead of schedule, making it one of the fastest production ramp-ups in the industry’s history.
“Every Guyanese will benefit from oil production,” Mr. Granger said in a televised address, pointing out that his administration is putting all systems in place to ensure the prudent management of oil revenue.
ExxonMobil initiated oil and gas exploration activities in Guyana in 2008, collecting and evaluating substantial 3-D seismic data that led to the company safely drilling its first exploration well in 2015, Liza-1.
The Liza discovery was announced on May 20, 2015. Liza-1 well was the first significant oil find offshore Guyana. It encountered more than 295 feet (90 meters) of high-quality oil-bearing sandstone reservoirs. It was safely drilled to 17,825 feet (5,433 meters) in 5,719 feet (1,743 meters) of water.
The first phase of oil production at the giant Liza field marks a significant turning point for Guyanese and provides the country with an unprecedented opportunity to change its fortunes and potentially transition to one of the wealthiest nations in the world.
Based on projections, Guyana is expected to earn around US$300 million per year during the period of cost-recovery after which this will significantly increase.
Under the PSA terms, the government is set to receive 2% royalty and half the profit oil when production begins.
Production at the Liza Phase 1 Development will peak at 120,000 barrels per day. Liza Phase 2 is scheduled to start up in 2022 with double the production output and a third development at the Payara field is expected to get underway by 2023.
ExxonMobil is operator at the Stabroek Block with a 45% interest. Hess and CNOOC are co-venturers at the block with 30% and 25% interest respectively.
Dutch floater specialist SBM Offshore was contracted by ExxonMobil to build and operate the Liza Destiny FPSO. Over 1,000 Guyanese worked on projects that culminated with the completion of the vessel. Currently, there are more than 3400 people in Guyana working to support various aspects of the project, over 1700 of whom are Guyanese.
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