Exxon Reduces Guyana Crude Production

(Tudor Pickering, 16.Jun.2020) — Reports out last night that XOM was forced to reduce output at its Liza Phase 1 project in the Stabroek block offshore Guyana due to an issue with equipment designed to limit excessive flaring by reinjecting produced gas back into the reservoir.

In order to comply with Guyanese regulations, XOM has reduced production to 25-30mbpd in an effort to limit associated gas production to the government regulated maximum of ~15mmcfd for gas flaring. Phase 1 of the project was initially expected to reach full capacity of 120mbpd gross (54mbpd net to XOM) this month, after ramping to 75-80mbpd in early May.

For Guyana overall, on the Q1’20 call the company noted Liza Phase 1 had, to date, been largely unaffected by the COVID-19 pandemic, with Liza Phase 2 remaining on track for a 2022 startup. Beyond Phase 2, considering the ongoing election process in Guyana impacting Payara approvals and COVID-19 related social distancing measures, the company’s target for reaching 750mbpd gross across various projects was pushed back a year to 2026.

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Tudor Pickering Holt & Co.

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