Exxon says there is significant benefit to Guyana as it announces its FID
DPI/GINA, Guyana, Friday, June 16, 2017
Minister of State Joseph Harmon at today’s post Cabinet press briefing said he has “full confidence” that the Minister of Natural Resources has negotiated, with “the best advice possible”, an agreement that is “in the interest of Guyana”.
Guyana will receive a royalty of two percent on gross earnings and benefit from 50 percent of the profits from the sale of petroleum once production commences in 2020.
Minister of Natural Resources Raphael Trotman yesterday announced that his Ministry has issued Exxon and its partners the production license for the Liza field.
Meanwhile, ExxonMobil will investment US$4.4B in the first phase development of the Liza field and noted there is potential for enhancing Guyana’s local content.
A press release published on the company’s website (news.exxonmobil.com) confirmed that a finical investment decision has been made to proceed with the Liza Phase 1 development.
The release said the Liza Phase 1 development “can provide significant benefits to Guyana, including jobs during installation and operations, workforce training, local supplier development and government revenues to fund infrastructure, social programmes and services”.
the Liza Phase one development includes “a subsea production system and floating production, storage and offloading (FPSO) vessel designed to produce up to 120,000 barrels of oil per day”. The FPSO is expected to develop approximately 450M barrels of oil, the release explained.
However, the release cautioned that “references to barrels of oil and other quantities of oil or gas…include volume that are not yet classified as proved reserves under SEC definitions but…we believe will ultimately be produced”.
President of ExxonMobil Development Company Liam Mallon is quoted in the release as saying, “We’re excited about the tremendous potential of the Liza Field and accelerating first production through a phased development in this lower cost environment.”
Mallon also pledged that his company will work with the government and its partners in developing the resources to have “long-term and meaningful benefits for the country and its citizens”.
The Liza field is located some 190 kilometers offshore Guyana in the 6.6M acres known as the Stabroek Block. Exxon’s partners are Hess Guyana Exploration Ltd and CNOOC Nexen Petroleum Guyana which hold and 30 and 25 percent interest in the Liza field respectively.
By: Tiffny Rhodius