No end to surprises from offshore Guyana and an ExxonMobil-led consortium, which have identified at least 11 billion barrels of recoverable oil resources, and catapulted the impoverished South America country firmly onto the global oil map.
OilPrice points out that the offshore Guyana-Suriname Basin is being called the world’s most exciting oil frontier seeing it attract considerable attention from global energy companies.
Despite industry infrastructure shortfalls and other constraints there are clear indications that the oil boom which has delivered a massive economic windfall for Guyana is preparing to explode. Exxon only roughly a week ago announced two additional oil discoveries in the world class 6.6-million-acre Stabroek Block offshore Guyana which now sees over 30 discoveries in that block alone. Other energy companies are investing heavily in offshore Guyana, which is a jurisdiction that has some of the lowest operating costs in South America.
Guyana is poised to emerge, before the end of this decade, as a leading global oil producer and and exporter.
Exxon’s latest oil discoveries in offshore Guyana were with the Sailfin-1 and Yarrow-1 wells in the Stabroek Block. Sailfin-1 encountered 312 feet of hydrocarbon bearing sandstone while Yarrow-1 only found 75 feet. That brings the number of discoveries made by the Exxon led consortium, where the energy super-major is the operator holding a 45% interest with 30% controlled by Hess and the remaining 25% by CNOOC, in the Stabroek Block to 35 since 2015.
The Exxon led consortium secured extremely favorable terms from Georgetown for the development of the Stabroek Block, with some analysts describing it as one of the most advantageous production sharing agreements ever obtained. For that reason, those operations will be highly profitable for Exxon, as well as partners Hess and CNOOC, because of forecast industry low breakeven prices of US$ 25 to US$ 35 per barrel Brent. It is for this reason that Exxon is investing heavily ramping up activity in the Stabroek Block with many projects ahead of schedule. The block is expected to become a major growth driver for the global energy super-major.
Exxon has ramped up activity in the Stabroek Block with the Liza Phase 1 and Liza Phase 2 operations now producing at above nameplate capacity to be pumping a combined total of around 360,000 barrels of petroleum per day. The integrated energy super-major is working on other projects in the Stabroek Block. These include the 220,000 barrel per day Payara project which was approved by Guyana’s government in Georgetown during September 2020. It will add a third production, storage and offloading (FPSO) vessel, named Prosperity, to the two FPSOs working in the Liza oilfield. Payara will have 41 wells, 20 production and 21 injection wells with start-up anticipated during 2023. Then there is the Yellowtail development which is planned to have 51 wells, 26 production and 25 injection wells. Yellowtail, which will have nameplate capacity of 250,000 barrels per day, will add a fourth FPSO to Exxon’s operations in the Stabroek Block.
It is anticipated that the project will commence production during 2025. Exxon expects to be pumping one million barrels per day from the Stabroek Block by 2030.