The timetable for production of first oil in Guyana has been moved up to December this year, earlier than was previously announced, according to ExxonMobil’s partner in the Stabroek Block, Hess.
“In terms of development, the Liza Phase 1 discovery is now targeted to start up in December and will produce up to 120,000 gross barrels of oil per day using the Liza Destiny FPSO [Floating Production Storage and Offloading vessel], which arrived in Guyana on August 29th,” Hess’ Chief Executive Officer, John Hess, said at the company’s 2019 third quarter earnings call.
Hess’ position was confirmed by ExxonMobil, the operator of the Stabroek Block, with the latter company emphasising that while the schedule has been moved forward, it is barring bad weather and other unforeseen conditions.
“Liza Phase 1 is continuing to progress very well with key activities running ahead of plan and there’s a possibility that first oil could be this year. However, there are several factors such as weather that can affect this timeline. Our top priority remains the safety of our project workforce and protection of the environment,” ExxonMobil’s Public and Government Affairs Advisor Janelle Persaud told Stabroek News, when contacted.
ExxonMobil found oil in the Stabroek Block in May, 2015 and a less than five-year development period of the Liza well is seen as fast by industry standards.
Minister of State Dawn Hastings-Williams told media that government was told of the possible early production date and has always been hopeful that the weather holds up and there are no unforeseen issues that can affect the new production schedule.
“We are excited and happy. We have been keeping in communication with the companies and they said the first quarter of next year…and if possible [production] can begin this year. So they would have done their work and told us… It means that we move earlier to production of first oil and to seeing the benefits of this industry impact Guyanese much faster,” she said.
Some observers had posited that first oil could be pumped as early as the first week of February, a month before this country goes to general elections.
In May last year, Minister of Natural Resources, Raphael Trotman had told the National Assembly’s Sectoral Committee on Natural Resources that his government had two preeminent objectives when it signed the Production Sharing Agreement (PSA) with ExxonMobil and partners and that was to ensure production in the fastest possible time and that it “needed to protect the resource to say this is ours.” He made the comments against the backdrop of Venezuelan aggression towards Guyana. Trotman had also said that President David Granger and his Cabinet sanctioned the 2016 renegotiation of the PSA.
The announcement signals that Guyana will receive revenues earlier than expected. However, the money will go into the Consolidated Fund and has to go through a rigid process before it can be taken out for spending. With the current political impasse, it would mean that all revenues raked in from the sector would have to wait until after the March 2, 2020 general elections before it can be spent.