Guyana poised to make almost US$1 billion from oil this year, with Liza Unity start-up

With oil major ExxonMobil announcing the start-up of the Liza Unity floating production, storage and offloading (FPSO) vessel offshore Guyana on Friday, Guyana is projected to make almost US$1 billion from the tripling of its oil production in 2022.

This start-up marks the second offshore development since the discovery of oil offshore Guyana in 2015, joining the Liza Destiny which commenced production in December 2019. The Liza Phases One and Two operations, at 120,000+ barrels per day and 220,000 barrels per day respectively, take Guyana’s daily production to 340,000 barrels per day.

ExxonMobil said the Liza Unity, which arrived in Guyana in October 2021, is the world’s first FPSO to be awarded the SUSTAIN-1 notation by the American Bureau of Shipping, in recognition of its sustainable design, documentation and operational procedures.

Minister of Natural Resources, Vickram Bharrat, has been on the forefront of advocating for sustainability in the extraction of Guyana’s natural resources.

“The Government of Guyana and citizens welcome the operation of this new FPSO to sustainably extract and manage the country’s oil and gas resources, which will further enhance earnings from this sector to drive Guyana’s infrastructure development and improve the delivery of services to all citizens,” Minister Bharrat said, commenting on the announcement.

He expressed pride that the government was able to put two critical pieces of legislation in place, the Local Content Act 2021 and Natural Resource Fund Act 2021, before the start-up. The local content legislation demands an increasing place for Guyanese workers in the industry, and the natural resource legislation sets out transparent, and robust provisions for management of Guyana’s share of the oil wealth. The Government emphasised that it will take all necessary steps to ensure all Guyanese benefit from the earnings derived from the petroleum sector, and that it will work with its international partners and key stakeholders in the sector to ensure the sector performs in-keeping with international recognised best practices.

ExxonMobil, in full speed ahead, said the current Stabroek block resource estimate of 10 billion oil-equivalent barrels has the potential to support up to 10 projects.

“ExxonMobil anticipates that four FPSOs with a capacity of more than 800,000 barrels per day will be in operation on the Stabroek Block by year-end 2025. Payara, the third project in the Stabroek Block, is expected to produce approximately 220,000 barrels of oil per day using the Prosperity FPSO vessel, which is currently under construction. The field development plan and application for environmental authorisation for the Yellowtail project, the fourth project in the block, have been submitted for government and regulatory approval,” the company said in a release on Thursday.

Government said these four developments will take Guyana over 800,000 barrels of oil in daily production capacity by 2025.

Minister Bharrat revealed on Tuesday that the Government expects ExxonMobil to submit an application for the fifth development, Uaru, before the year is out. The Natural Resources Ministry has budgeted GY$88 million for the review process.

ExxonMobil’s Upstream Oil and Gas President, Liam Mallon, said “We are collaborating closely with the government and people of Guyana to develop this world-class resource responsibly, helping to meet the world’s energy needs and delivering enhanced value for all stakeholders at a record pace and well ahead of the industry average.”

ExxonMobil committed its effort to utilising these developments to promote local content, noting that more than 3,500 Guyanese are now supporting its local activities, and that $219 million has been spent by it and direct contractors with more than 880 local suppliers in 2021.

ExxonMobil’s local subsidiary, Esso Exploration and Production Guyana Limited is the operator of the Stabroek Block and holds 45% interest. Hess Guyana Exploration Ltd. holds 30% interest and CNOOC Petroleum Guyana Limited holds 25% interest.