Hess, Exxon Mobil Prep For More Exploration Offshore Guyana

(Hart Energy, Velda Addison, Senior Editor, 31.Oct.2018) — Partners Exxon Mobil, Hess Corp. and CNOOC Nexen Petroleum are making progress toward development of the hydrocarbon bounty discovered offshore Guyana.

“This month a second exploration vessel, the Noble Tom Madden, arrived to accelerate exploration and appraisal activities on the block starting with the Pluma prospect located 17 miles south of Turbot where we expect to spud in early November,” Hess Corp. CEO John Hess said on the company’s third-quarter earnings call Oct. 31.

The well will target Upper Cretaceous reservoirs, the company said.

So far, the Exxon Mobil-led exploration effort has led to nine discoveries. The latest was announced in August after Exxon Mobil affiliate Esso Exploration and Production Guyana Ltd.’s Hammerhead-1 struck oil, opening a new play type and adding to the prospectivity of the Stabroek Block.

The discoveries, which are expected to lead to a gross production of more than 750,000 barrels of oil per day by 2025, have been among the exploration bright spots for the industry which saw oil and gas companies’ exploration budgets drastically slashed during the market downturn. The success offshore Guyana has also spurred interest from other companies looking to hit oil in the region.

Greg Hill, COO for Hess, said a successful flow test was recently completed at Hammerhead and additional appraisal activities are planned. Plans are for the Stena Carron rig that drilled the well to go to the Canary Islands in Spain for recertification before returning to the block in late December to spud a well on the Upper Cretaceous Amara prospect, which is about 24 miles southeast of the Turbot discovery.

Meanwhile, development of Liza Phase 1—sanctioned in June 2017—is moving ahead. First oil is expected by early 2020 with a nameplate capacity of 120,000 bbl/d of oil, Hill said.

The larger Phase 2 development, with a capacity of 220,000 bbl/d, is also on track for startup by mid-2022, he said, adding “Phase 3 is currently in FEED with first oil expected in 2023.”

Hess called the company’s position offshore Guyana “truly world class in every respect and transformational for our company.” Discovered recoverable resources for the Stabroek Block, in which Hess has a 30% stake, are estimated at more than 4 billion barrels of oil equivalent.

Guyana is one of Hess’ two main growth engines. The other is the Bakken where net production grew to 118,000 boe/d during the third quarter, up from 103,000 boe/d a year earlier.

“We forecast Bakken net production will increase to approximately 125,000 net barrels of oil equivalent per day and we expect to drill approximately 35 wells and bring 31 wells online bringing the total for full year 2018 to 120 wells drilled and 100 new wells brought online,” Hill said.

Hess also continues to test limited entry plug-and-perf completions and higher proppant loadings.

“Initial results are encouraging,” Hess said. The company added a sixth rig in the Bakken in September, and expects to generate annual capital production growth of between 15% to 20% through 2021, he said.

For the quarter, the New York-headquartered company reported net income rose to $52 million, compared with a net loss of $624 million a year earlier. The company also grew oil and gas production to a net average 279,000 boe/d, excluding Libya. The amount exceeded guidance and came as E&P capital and exploratory expenditures fell slightly to $542 million, down from $558 million a year earlier.

“We delivered another strong quarter of execution. With higher production and guidance and lower unit costs and guidance while keeping capital on exploratory expenditures flat with guidance for the year and generating a profit for the quarter,” Hess said. “We continue to execute our strategy to deliver capital efficient growth in our resources and production investing in the highest return projects to move down the cost curve and be profitable in a lower price environment with increasing cash generation and returns to shareholders.”

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#LatAmNRG

Let’s Use Guyana Oil Funds for Teachers

(Stabroek News, 6.Sep.2018) — Dear Editor: How could we have billions of barrels of oil in 2018 and not be able to pay our teachers a living wage? The value of having the requisite quality of well-paid and motivated teachers of the highest calibre will reverberate across this nation in positive ways that will lift Guyana out of its morass.

Let us for this occasion set aside the multiple ways that funds can be sourced from our treasury to give at least a 25% increase to our teachers for 2018 and a 5% increase for each of 2019 and 2020. Instead, let us source the needed funds from our oil resources now.

What is more important to the development of a nation than the education of our youths? We hear so much of the importance of Science, Technology, Engineering, Math, English and Artisan skills, yet we show great trepidation in taking the necessary actions to ensure that we empower our teachers with the benefits to get the job done and stem the increasing threat of violence, robbery, idleness, underdevelopment of our youth, marginalization of our youth, alarming levels of migration, poor communication skills, a subservient culture, inferiority complex, and contract subjugation.

The leveraging of our oil resources for the benefit of our teachers and support of the sugar industry, among others; will have an immediate and positive impact on the economic welfare of Guyana. What folly it is to create a wealth fund, while our teachers and sugar workers are thrown under the truck.

We often hear of providing for future generations. I beg to differ somewhat and state emphatically that the most important generations are those among us now. And the empowerment of current generations will benefit current and future generations.

Too often our political leaders are servile, complicit, compromised, weak-kneed and spineless to the global powers that we cannot engage with Exxon’s Esso, Hess, and Nexen – mano a mano and negotiate a contract that 1) Pays a realistic signing bonus exceeding US$500 Million, 2) Increases the royalty to at least 10%, and 3) Have the partners of the Government of Guyana that signed on to the 2016 Production Sharing Agreement, disgorge themselves of the foul pre-contract costs that are doubling every two years from US$460 Million at the end of 2015 to over US$900 Million in 2018.

How many billions of barrels of oil must be found before we find ways to monetize the oil discoveries to fund our teachers and sugar industry now?

In the midst of the Exxon’s Esso oilgreeopoly we have the aptly named “Wood” McKenzie agent releasing a report dated August 31, 2018 – noting that Guyana’s Liza complex located in the Stabroek block, accounts for 15% of all conventional crude oil found globally since 2015. “Wood” clusters over several key data points, such as amount of oil in the Liza complex, acreage of the Liza complex, location of the other 85% of crude oil found since 2015, and unsurprisingly, the amount of royalty for the owner of the oil: Guyana.

Wood McKenzie then gloats over the triple play for Esso, Hess, and Nexen, comprising of attractive fiscal terms, scale of resource, and oil reservoir quality.

How foolish it is that we have billions of barrels of oil in our backyard and we can’t pay respectable salaries for our teachers and support our sugar industry. Are our negotiating skills so hollow and inept that we can’t use monetary value leverage, with the billions of barrels of oil, to benefit Guyanese in need now; starting with our teachers, sugar workers and nurses.

More probably the failure to leverage the billions of barrels of oil has more to do with the despicable 2016 oil contract that Guyana signed away with Exxon’s Esso and its partners for a measly 2% and other superficial benefits.

With 123 Billion acres of land and water on earth – 29% land and 71% water; our beloved Guyana has been blessed by nature, providence and divinity to have Guyana’s Stabroek Block, comprising 0.005% of the earth surface and containing billions of barrels of oil offshore. Let us have the courage to demand that the resources in our 0.005% offshore, secures a contract that is best for Guyana’s ascendancy and provides a livelihood commensurate with our oil wealth: for our teachers, sugar workers, nurses, pensioners, youths and provide financial support for our industries and build infrastructure that will propel us to developed country status.

Yours faithfully,

Nigel Hinds

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Tullow Oil to Drill First Guyana Well in 3Q:19

(Reuters, 5.Sep.2018) — Tullow Oil plans to drill its first well in the much-watched Guyana offshore basin in the third quarter of next year in its Orinduik licence bordering discoveries by Exxon, a spokesman said on Wednesday.

Exxon and U.S. partner Hess Corp have said that more than 4 billion barrels of oil equivalent could be recovered from the Stabroek block off Guyana, which is part of one of the world’s biggest oil discoveries in the past decade.

Tullow owns 60 percent and Eco Atlantic Oil and Gas 40 percent in Orinduik. Total has an option to buy 25 percent from Eco.

“Hammerhead-1 is located approximately 7 km from the Orinduik licence boundary … Hammerhead-1 found material oil in turbidite channel systems,” the Tullow spokesman said of a recent Exxon discovery in the Stabroek block.

“Our 3D seismic (data), which includes Hammerhead, shows that these channel systems extend up-dip (?) into the Orinduik licence. We will now pick the well location for our first well on this licence and remain on track for drilling that well in the third quarter of 2019.”

Tullow also has a 37.5 percent stake in the Kanuku licence offshore Guyana alongside Repsol and Total. It also owns stakes in two blocks off Guyana’s neighbour Suriname, where its partners are Ratio, Equinor and Noble.

(Reporting by Shadia Nasralla; Editing by David Goodman and Mark Potter)

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Offshore Guyana Oil and Gas Potential is “Massive”

(UPI, Daniel J. Graeber, 23.Jul.2018) – The size of a reservoir off the coast of Guyana is “massive,” the CEO of Hess Corp. said Monday after a multi-million barrel revision to reserve estimates.

Hess and Exxon Mobil on Monday revised the estimate of recoverable reserves at the Stabroek block off the coast of Guyana from 3.2 billion barrels of oil equivalent to more than 4 billion barrels of oil equivalent.

“The Stabroek block is a massive world class resource that keeps getting bigger and better,” Hess Corp. CEO John Hess said in a statement. “Since the end of 2016, the estimate for recoverable resources on the block has quadrupled and we continue to see multi-billion barrels of additional exploration potential on the block.”

Hess said the revision followed the inclusion of data from new discoveries offshore Guyana and the completion of the fifth appraisal well at the Liza oil field. Dubbed Longtail, the latest discovery made near the giant Liza field could be producing about 500,000 barrels per day by late 2023.

The initial phase of development at Liza was sanctioned in June 2016 and called for the use of a floating production, storage and offloading vessel that will lead to an initial production rate of 120,000 barrels of oil per day.

Phase 2 calls for a second FPSO with a gross production capacity of 220,000 barrels per day and planning is already under way for a third phase of development offshore Guyana.

“The collective discoveries on the Stabroek block to date have established the potential for up to five FPSOs producing over 750,000 barrels per day by 2025,” the statement from Hess read.

Hess in June sold off its joint venture interests in the Appalachian shale basin in eastern Ohio to Ascent Resources for $400 million, using the proceeds in part to fund operations offshore Guyana. The company estimates it would cost at least $3.2 billion to fully develop the broader offshore Liza field.

Consultant group Wood Mackenzie said offshore Guyana is a competitive prospect with a break-even price at about $35 per barrel. Brent, the global benchmark for the price of oil, was trading near $74 per barrel on Monday.

Hess reported a net loss of $106 million in the first quarter, compared with a loss of $324 million in the same period in 2017. The company attributed the improvement to higher crude oil prices and lower operating costs.

Hess releases its second quarter earnings report on Wednesday.

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The $20 Billion Question for Guyana

Guyana fishermen make their way home to the coastal community of Clonbrook at the end of another day at sea. Guyana is one of the poorest countries in South America, but massive offshore oil reserves may well transform it to one of the wealthiest in the next few years. CreditChristopher Gregory for The New York Times

(The New York Times, Clifford Krauss, 20.Jul.2018) – Guyana is a vast, watery wilderness with only three paved highways. There are a few dirt roads between villages that sit on stilts along rivers snaking through the rain forest. Children go to school in dugout canoes, and play naked in the muggy heat.

Hugging the coast are musty clapboard towns like Georgetown, the capital, which seems forgotten by time, honeycombed with canals first built by Dutch settlers and African slaves. The power grid is so unreliable that blackouts are a regular plague in the cities, while in much of the countryside there is no electricity at all.

Such is the unlikely setting for the world’s next big oil boom.

In the last three years, ExxonMobil has drilled eight gushing discovery wells offshore. With the potential to generate nearly $20 billion in oil revenue annually by the end of the next decade, roughly equivalent to the revenues of the much-larger Colombia, there could be enough bounty to lift the lives of almost every Guyanese.

If all goes well, one of the poorest countries in South America could become one of the wealthiest. Suddenly the talk of Georgetown is a proposed sovereign wealth fund to manage all the money, as if this were a Persian Gulf sheikhdom.

But there are obstacles. If history is any guide, countries that discover oil often waste their opportunity, as the resource blends seamlessly with corruption. Countries with weak political institutions like Guyana are especially vulnerable.

“You have an alignment of money and power in the hands of the state, so the party in power controls the resources,” said Floyd Haynes, a Guyanese-born finance professor who is a consultant to Business Ministry. “And the money is usually squandered, misapplied or downright stolen.’’

Senior government officials here have little experience regulating a big oil industry or negotiating with international companies. The civil service is corrupt, and the private sector is slow to innovate, businessmen and aides to senior officials acknowledge.

Still, there is cautious optimism. “We see this oil discovery as almost like providence,” said Raphael Trotman, the natural resources minister. “We’ve been given a second chance to get things right.”

The first chance was independence from Britain in 1966, and that chance was blown. A plague of ethnic tribal politics has produced a fragile state with an economy propelled by drug trafficking, money-laundering, and gold and diamond smuggling. A vast majority of college-educated youths emigrate to the United States or Canada, while those who stay behind experience high rates of H.I.V. infection, crime and suicide.

Can oil wealth help Guyana overcome its history, or will the windfall that will flood government coffers merely turn the page to a new tragic chapter?

“The challenges are enormous and shouldn’t be underestimated,” said Lars Mangal, president of Totaltec Oilfield Services, a Guyanese company seeking to train local workers in safety and basic oil operations. “We have to overcome nepotism, entitlements, corruption, cynicism and skepticism.”

The Guyanese government, under its agreement with Exxon, will receive roughly half the cash flow from oil production once the company’s costs are repaid. Economists say that will mean the country’s current gross domestic product of $3.6 billion will at least triple in five years.

But with exploration out of sight 120 miles offshore, and no refinery planned, the economic benefits for the population have been limited so far, making some cynical. Only about 600 Guyanese have found direct employment on the drill rigs, shore bases and offices, and that number may increase only to about 1,000, oil executives say.

“When we have big projects, we hire foreign companies who bring their own workers,” said Khemraj Dhaneshrie, a young chemist at the Leonora estate sugar mill.

Mr. Dhaneshrie is typically skeptical about his government’s ability to oversee foreign operations after Guyana’s long experience of opportunistic Chinese investment. He noted that the Chinese financed and built an enormous factory in 2009 to rescue the sugar industry, but it turned out to be a $181 million boondoggle.

“The Chinese cut down our forest, dug out our gold, and we never got a cent,” he said. “We could end up with the same experience with ExxonMobil.’’

In the Past, Wasted Opportunities

Colorful Hindi monuments tower over Guyana’s rice fields, a reminder of the cultural distance between the country and its Latin American neighbors. It is English speaking because of the legacy of British rule, and its two biggest ethnic groups are Afro-Guyanese and Indo-Guyanese — the descendants of slaves from Africa and of indentured servants brought from the Indian subcontinent in the 19th century.

Until now, the country had never produced oil, and traditionally it has traded its rice crop for fuel from Venezuela. Now it is attracting experienced Texas oilmen like Doug McGehee, Exxon’s Guyana operations manager.

Over the last 37 years working for ExxonMobil, Mr. McGehee has taken his black cowboy boots, silver belt buckle and Texas A&M class ring into the oil fields of Angola, Kazakhstan and Equatorial Guinea. In all those places, oil wealth has risen to the top, only to leave the poor behind. Last year, for example, a Paris criminal court convicted the vice president of Equatorial Guinea of money-laundering and embezzling more than $100 million.

But as Mr. McGehee monitored operations aboard the Noble Bob Douglas drill ship on a recent day, he insisted that Guyana could be different.

“The math is right here,” he said, noting that the country has a tiny population — below 800,000 — to share all the new wealth. Guyana’s government stands to take in more than $6 billion in royalties and taxes annually by the end of the 2020s, according to the Norwegian consultancy Rystad Energy.

“If the government manages the resource right, every Guyanese should benefit with better schools, better health facilities, better roads,” Mr. McGehee said.

That is no small “if.”

Guyanese need look no further than neighboring Venezuela to see a failed state where the world’s largest oil reserves have not prevented hunger, shortages of medicine and hyperinflation from producing widespread misery. Nearby Trinidad and Tobago offers another example of how countries dependent on oil can neglect traditional industries and then suffer severe economic shocks when crude and natural gas prices fall.

Scholars call the syndrome the “resource curse.”

Others warn of the “Dutch disease,” a phenomenon so labeled in the 1970s after a natural gas boom sapped the strength of manufacturing in the Netherlands. Nations that contract the disease from a sudden influx of mineral money typically suffer a surge of inflation, while labor from farming and other traditional professions is drawn to the higher-paying oil sector. Thus, wealth becomes more concentrated.

There are some examples of countries effectively using oil to reduce poverty. Malaysia, with large offshore oil production, has kept its economy diversified and growing. In the Middle East, Oman is a model for using oil and gas wealth to modernize its economy.

But dispiriting examples of wasted opportunity abound.

“We’re all concerned about the negatives,” Prime Minister Moses V. Nagamootoo said.

Dawn Chung Layne, who operates a sewing business out of her mother-in-law’s concrete house in Georgetown, is also anxious. She is attending workshops at the Center for Local Business Development, a program financed by Exxon, to learn ways she can benefit from the oil economy. She hopes to make curtains and linen for cafeterias on the oil ships, and uniforms for sports teams established by foreign companies and their families.

But she also sees risks in these new ventures. More affluent Guyanese may turn away from the sports uniforms she already makes to buy name brands like Nike and Adidas, she said, and she is concerned that food prices will rise.

“Check out the Trinidad economy,” she said. “They thought oil was the best thing since sliced bread, and they spent Sunday to Sunday. They stopped producing and imported everything with oil money. It could happen here.”

‘This Could Be Game Changing’

Before the recent breakthrough, various oil companies had drilled more than 40 wells off Guyana and neighboring Suriname since the 1960s. All were dry holes or otherwise not economically promising. But as oil prices rose a few years ago, Exxon and Royal Dutch Shell decided to take another look. (Shell eventually dropped out of the partnership.)

Exxon’s top geoscientist on the scene was Kerry Moreland, an Oklahoman whose family has been in oil for three generations. Ms. Moreland toyed with becoming a professional bowler and had interned as a tornado chaser for a Tulsa television station before going to work for Exxon and traveling the world in search of new fields. She pinpointed on the map where the first deepwater well, named Liza-1, should be drilled.

Recalling the day three years ago when she decided to duck out of some business meetings in Georgetown to visit the drilling platform, she said there was no more than a 20 percent chance that a meaningful amount of oil would burst out from three miles below the ocean bottom.

As luck would have it, just as her helicopter landed on the platform, the drill bit penetrated the oil reservoir. She went to the control room as the first data from the wells showed promising signs of hydrocarbons. When rock fragments came to the surface a few hours later, they were dripping with oil.

“At that moment, it was ‘Oh, my God, we’ve made a discovery,’” Ms. Moreland said. “You have to pinch yourself and ask, ‘Is this really happening?’ And it hit right then, this could be game changing for the country, one of the poorest countries in the Western Hemisphere. It was a dream come true for any geologist.’’

Exxon is known in the industry as a slow-moving, stodgy company, but Ms. Moreland’s enthusiasm caught fire through the executive wing in the Texas headquarters known as the God Pod. Within three months, the company sent two vessels to conduct the largest three-dimensional seismic test that Exxon had ever undertaken, over 6,500 square miles, in search of more oil.

There’s a lot at stake for Exxon in Guyana.

In recent years, its stock price has slumped because of disappointing production and depleting reserves. The company invested heavily in Canadian oil sands and in natural gas when prices were high, bets that have not worked out as well as expected. While the company was forced to write off large assets in Canada, Western sanctions on Russia foiled its plans to drill in the Russian Arctic.

Darren Woods, the company’s chief executive, has a plan to reverse company fortunes, and Guyana is a big part of it.

Leading a consortium that includes Hess and the China National Offshore Oil Corporation, Exxon is making an effort here that is nothing if not ambitious. Within three years of its big first discovery, it has begun drilling the first of 17 wells that will start yielding oil in 2020, with a floating production, storage and offloading vessel able to handle 120,000 barrels a day. And that is just the first phase.

Another floating vessel, with a capacity of 220,000 barrels a day, is planned, and a third vessel is being considered. In all, 500,000 barrels a day could be produced by sometime in the next decade — the equivalent of Ecuador’s national output. (Repsol of Spain, Tullow Oil of Britain and other companies are exploring, too.)

“It’s a growth area for us,” said Mr. McGehee, the Exxon operations manager. “We keep finding oil.”

That produces nothing but excitement for the 60 Guyanese workers on the Noble Bob Douglas drill ship, who have typically seen their incomes soar.

Gorshum Inniss, a 25-year-old roustabout with an easy smile and flashing dark eyes, is working on a crane crew lifting casing pipe for new wells, doubling what he earned working on a tugboat. He said he now had enough money to visit his parents and younger brother in New York and planned to build a house for him and his daughter.

“I’m proud to be one of the pioneers in this big moment for Guyana,” he said. “I see Guyana as the new Middle East.”

An Endangered Beach?

Not far from the turbulent Venezuelan border, there is a quiet stretch of coastline, pounded by surf, known as Shell Beach because its sand is made of tiny crushed seashells that make it feel like sawdust. Several endangered species of turtles come to nest at night. Once hunted for food, they are jealously guarded from poachers by residents who make a living fishing and selling coconuts.

Audley James, a former turtle hunter who makes necklaces out of beads and coconut shells, remembers when Trinidadian environmental consultants representing Repsol came six years ago to give two days of spill-response training.

The Trinidadians taught the residents how to lay temporary floating barriers to protect the beach from an oil spill, and gave them training certificates that look like diplomas. But there has been no further training that might prepare them for what is now a much less theoretical hazard.

“Plenty of us don’t understand what is going on,” Mr. James said.

Environmentalists are worried that oil will forestall development of renewable energy and that the government and oil companies are not fully prepared to prevent a possible spill.

“It’s two years before first oil, and we don’t have a national oil spill contingency plan,” said Annette Arjoon-Martins, president of the Guyana Marine Conservation Society. “We have our hands in the mouth of a jaguar.”

Ms. Arjoon-Martins said the government’s agreement with Exxon did not specify in enough detail the company’s responsibilities in case of a spill. Government officials disagreed, saying the country’s laws would hold the company fully liable.

Exxon executives say the company is doing everything possible to minimize the dangers of a spill disaster. The company has skimmers and oil booms on hand to collect errant oil, and it has applied to the government to use chemical dispersants in an emergency to break up any spilled oil. They say Guyana is close enough to the Gulf of Mexico to bring in plenty of help in an emergency.

The company has agreed to map the coastal mangroves and study the area’s fish, bird and turtle migration routes to set priorities in case a cleanup is ever needed, executives said. And in another potential environmental benefit, the company is planning to build a natural-gas pipeline to shore that will replace the heavy fuel oil burned for the country’s power plants, lowering costs to consumers and businesses.

“We are committed to develop these resources in the most responsible way with a minimal impact on the environment,” said Rod Henson, Exxon’s Guyana manager. “We stand by our operations, and in the unlikely event of an incident, we will absolutely respond immediately and we will fully take care of our responsibilities.”

Local oil executives say one obstacle to overcome is a lackadaisical attitude toward safety among Guyanese workers, who frequently arrive at their construction and wharf jobs in flip-flops and sometimes use their hard hats as soup bowls. That is something Exxon and other companies are working to change with courses and other training that teach workers to be careful, not only for their own safety but also to safeguard the fragile marine environment.

At a recent daily meeting of the crew of the Noble Bob Douglas to review environmental and safety precautions, Mr. Inniss, the roustabout, was given a chance to make his own safety presentation. He told of a serious accident he had a couple of years ago working on his motorcycle when he neglectfully left the motor running while adjusting a chain. He lost three fingertips.

“Use your heads before you use your hands,” he told the room full of Guyanese and American workers. He got an ovation and smiled proudly.

‘I See a Lot of Red Flags’

To visit the most senior oil regulator in Georgetown, one needs to climb an exterior staircase of warped wood that could sorely use a fresh coat of paint.

At the top is the tiny office of Newell Dennison, the acting head of the Guyana Geology and Mines Commission, whose desk is stacked high with folders beside a single metal filing cabinet. His office is spare of decorations, aside from two bouquets of artificial tropical flowers.

Mr. Dennison has a computer by his desk, from which he could consult data gathered by Exxon drill ships, though he said he had yet to do so. “We’re in transition,” he explained. “It’s a challenge.’’

For all the international attention that Guyana’s oil bonanza is beginning to generate, Mr. Dennison and the Department of Natural Resources have a mere nine technically trained people responsible for regulating oil production, engineering and geological research.

“You would expect we would have a problem to have 100 percent monitoring with our lack of resources,” said Mr. Dennison, a middle-aged geologist with horn-rimmed glasses and a neatly trimmed goatee. “My commission cannot be all of a sudden everything people expect us to be.”

There are a few signs of progress.

Guyana’s president, David A. Granger, a retired military commander leading a fractious coalition, has tried to establish a legal framework for the coming bonanza. To bypass corrupt officials, Mr. Granger has announced his intention to form an energy department for policymaking, responsible to the president, and an independent petroleum commission to regulate the industry and grant exploration and production licenses.

Under pressure to break with past secretive deals with international companies, Mr. Granger published Guyana’s contract with Exxon on a government website in December, opening a vigorous public debate on its terms. He has promised to end closed-door bidding for drilling rights, and to open auctions for future development.

Many of the changes have been promoted by Jan Mangal, Mr. Granger’s personal petroleum adviser and brother of Lars Mangal, the businessman. Jan Mangal, a Guyanese-born former Chevron project manager, has advised the president to put a hold on new leasing until the petroleum commission can be established with new personnel and has called for an investigation of several oil-exploration concessions made by the previous government to small oil companies.

“I see a lot of red flags,” said Mr. Mangal, who shuttles between Guyana and his home in Houston. “We cannot allow the Guyanese industry to be built around this shabby foundation of corruption.”

There are other signs of trouble.

Foreign development bank advisers have told the government that legislation to create a sovereign wealth fund to invest the royalties and taxes coming to the government lacks sufficient regulatory controls to avert corruption. The legislation is now in limbo. Mr. Granger’s energy department has not gotten off the ground, and a bill to set up the petroleum commission is stuck in the National Assembly.

That leaves Mr. Dennison and his commission in charge of regulation. He said he and everyone in the government felt pressure to get things right.

“Of course I worry,” Mr. Dennison said.

Clifford Krauss is a national energy business correspondent based in Houston. He joined The Times in 1990 and has been the bureau chief in Buenos Aires and Toronto. He is author of “Inside Central America: Its People, Politics, and History.” @ckrausss

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US$1.4B Deal to Restart St Croix Refinery

(Stabroek News, 3.Jun.2018) – U.S. Virgin Islands Governor Kenneth E. Mapp announced yesterday an agreement which would reopen one of the world’s largest refineries, create hundreds of jobs in the territory and buttress the solvency of the Government Employees Retirement System (GERS).

According to a release from his office, Mapp said the US$1.4 billion pact was between the Government of the Virgin Islands and ArcLight Capital Partners, LLC, the owners of what had been one of the largest oil refineries in the world when it was shut down on the USVI island of St Croix in 2012. The release said that the deal includes reopening the refinery portion of the operation, which when restarted, will funnel hundreds of millions of dollars into the local economy.

The release said that under the agreement with ArcLight Capital, the owners of what is now called Limetree Bay Terminals, the company will invest approximately US$1.4 billion to upgrade the existing refinery located in St. Croix. Over the next 18 months, this will create more than 1,200 local construction jobs.

Once refinery operations begin at the end of 2019, as many as 700 permanent jobs will be created. The new jobs will be in addition to the over 750 jobs now at the terminal storage facility. The initial refining operations provide for the processing of around 200,000 barrels of crude oil feedstock per day.

“This agreement is great news for the people of the Virgin Islands as we continue to grow and expand our economy,” said Mapp, who added it is tremendous news for the ‘big island,’ which felt the full brunt of the shutdown of refining operations in 2012.  He added that the capital investment will not only benefit St. Croix since the monies from the agreement will boost the solvency of GERS and will also help fund a new 110-room, “upscale lifestyle” hotel, flagged by a major four-star brand on the sister island of St. Thomas.

Upon the closing of the transaction, ArcLight Capital will make a US$70 million closing payment to the Government of the Virgin Islands. The payment includes US$30 million for the purchase from the government of approximately 225 acres of land and 122 homes. The release said this property was acquired as part of the government’s settlement of certain claims against HOVIC, PDVSA of Venezuela, Hovensa and Hess Oil Corporation.

Once refinery operations begin and after crediting the US$40 million of prepaid taxes, Limetree will make annual payments to the government in lieu of taxes at a base rate of US$22.5 million a year. With market adjustments based on the refinery’s performance, this could increase to as much as US$70 million per year, but will not fall below US$14 million a year, the release said.

The release said that according to industry experts and consultants Gaffney, Cline & Associates, the government expects to receive more than US$600 million over the first 10 years of the restart of the refining operations. This income is in addition to the US$11.5 million currently flowing to the government from the oil storage terminal each year.

“For comparison sake, in the over 30 years that Hess Oil operated the refinery on the island of St. Croix, the company paid approximately US$330 million in corporate taxes to the government. As you may recall, in 2015 Hess Oil filed suit for the return of (those tax payments),” Mapp pointed out in the release. Hess Oil is one of the partners of ExxonMobil’s subsidiary, Esso in the Stabroek Block in Guyana’s waters.

Mapp said: “This landmark agreement did not happen overnight. It is the result of much hard work by the owners of ArcLight Capital and my Administration over the past two years. It is the product of complex negotiations with major players in the global oil industry. It required tremendous work with the Trump Administration and the President’s Council of Environmental Quality, the EPA (United States Environmental Protection Agency) and the U.S. Department of Justice. More work remains to be done, but this agreement allows the Virgin Islands to accelerate its recovery, grow its economy, create jobs for its people, propel new startup businesses, as well as support existing businesses and ultimately provide revenues for our government and our retirement system,” he said.

The release added that qualified Virgin Islands residents will be given preference in all hiring. ArcLight Capital will be obligated, and the local government will assist, to advertise and publicize all job opportunities for local residents. Residents of St. Thomas and St. John, who may be interested in working during the reconstruction of the refinery, will be offered a place to live while working on St. Croix without charge, the release added.

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ExxonMobil Announces 8th Find Offshore Guyana

(Energy Analytics Institute, Piero Stewart, 20.Jun.2018) – Irving, Texas-based Exxon Mobil Corporation’s good luck continues in Guyana.

The oil giant announced it has made its eighth oil discovery offshore Guyana at the Longtail-1 well, creating the potential for additional resource development in the southeast area of the Stabroek Block, Exxon announced in an official statement.

ExxonMobil encountered approximately 256 feet (78 meters) of high-quality, oil-bearing sandstone reservoir. The well was safely drilled to 18,057 feet (5,504 meters) depth in 6,365 feet (1,940 meters) of water. The Stena Carron drillship commenced drilling on May 25, 2018.

“The Longtail discovery is in close proximity to the Turbot discovery southeast of the Liza field,” said ExxonMobil Exploration Company President Steve Greenlee, in the company statement. “Longtail drilling results are under evaluation. However, the combined estimated recoverable resources of Turbot and Longtail will exceed 500 million barrels of oil equivalent, and will contribute to the evaluation of development options in this eastern portion of the block.”

Second Exploration Vessel

ExxonMobil is currently making plans to add a second exploration vessel offshore Guyana in addition to the Stena Carron drillship, bringing its total number of drillships on the Stabroek Block to three. The new vessel will operate in parallel to the Stena Carron to explore the block’s numerous high-value prospects.

The Noble Bob Douglas is completing initial stages of development drilling for Liza Phase 1, for which ExxonMobil announced a funding decision in 2017. Phase 1 will consist of 17 wells connected to a floating production, storage and offloading (FPSO) vessel designed to produce up to 120,000 barrels per day (b/d) of oil. First oil is expected in early 2020. Phase 2 concepts are similar to Phase 1 and involve a second FPSO with production capacity of 220,000 b/d. A third development, Payara, is planned to follow Liza Phase 2, according to ExxonMobil

The Stabroek Block is 6.6 million acres (26,800 square kilometers). Partners in the Stabroek Block include ExxonMobil affiliate Esso Exploration and Production Guyana Limited (Operator, WI 45%. Hess Guyana Exploration Ltd. (WI 30%) and CNOOC Nexen Petroleum Guyana Limited (WI 25%).
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ExxonMobil Reconfirms March 2020 for First Guyana Oil

(Denis Chabrol, DemeraraWaves, 12.Jun.2018) – ExxonMobil on Tuesday reconfirmed that Guyana will pump up its first barrel of oil in March 2020, even as the Guyana government continued to fend off criticisms of the 2016 production sharing agreement.

Vice President of ExxonMobil Development Company, Lisa Walters said work was well advanced by several companies in Singapore, Brazil and the United States Gulf Coast to ensure that commercial oil production begins in less than two years. “We are on track for first oil in March of 2020,” she said. “In just a little over a year and a half, the Liza Destiny will deliver its first oil to its first tanker offshore,” she added.

ExxonMobil estimates that oil discoveries at Liza, Payara, Snoek and Turbot offshore Guyana total 3.2 billion barrels and would eventually lead to daily production of 500,000 barrels. ExxonMobil estimates that Liza Phase 1 will generate over US$7 billion in royalty and profit oil revenues for Guyana over the life of the project.

Walters said the drill-ship, Noble Bob Douglas, recently started drilling the production wells located at Liza more than 125 miles off the Demerara Coast. She said “all of the design work on the project is nearing completion” and “construction is well-underway worldwide” for the Floating Storage, Production, Storage and Offloading (FPSO) vessel named “Liza Destiny”. SBM Offshore has won the contract to construct that vessel, while TechnicFMC, and Saipem have been hired for sub-sea construction of the umbilical cords and flow-lines. Guyana Shorebase Inc was awarded the contract in June, 2017 for shore-base services and in August, 2017 the Noble Bob Douglas was hired for drilling services.

ExxonMobil’s Country Manager, Rod Henson also used the opportunity of the official start of the Liza Phase 1 Development Programme to show off that in the first quarter of 2018, over US$14 million were spent with Guyanese suppliers; together with its contractors ExxonMobil utilized 262 Guyanese registered suppliers, 227 of which are Guyanese owned.

Minister of Natural Resources, Raphael Trotman reiterated that the revised ExxonMobil Production Sharing Agreement has “the same or very similar contractual terms” as those Guyana has signed with other companies such as Anadarko Petroleum, Ratio, CGX, REPSOL, Ratio, Eco-Atlantic and Mid Atlantic.

“In that regard, they will enjoy the same rights and obligations as every other company that has been contracted by the government to explore and develop our hydrocarbons.

That they were the first to find a large deposit should no redefine their contractual terms or place them in any position less than that enjoyed prior to discovery. For government to do otherwise is not how responsible or how well-organised and governed States function,” she said.

The Minister of Natural Resources said the proceeds of Guyana’s oil production would be fairly shared among all Guyanese without discrimination as part of a process that would eventually lead to the removal of negative labels such as Third World, backwards, underdeveloped and developing from Guyana. “With the blessings that have been revealed, and are within our grasp, we purpose to develop a modern, peaceful and cohesive State-one in which every man, woman and child, without exception, reservation, and/or discrimination of any kind, is able to enjoy the full and equal benefits of the bounty we are about to be bestowed,” he said.
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ExxonMobil Advances Offshore Guyana Liza Development

(ExxonMobil, 12.Jun.2018) – The Liza Phase 1 development continues to rapidly progress, with the commencement of development drilling offshore Guyana, ExxonMobil said.

Development drilling began in May for the first of 17 wells planned for Phase 1, laying the foundation for production startup in 2020. The company and its co-venturers have so far discovered estimated recoverable resources of more than 3.2 billion oil-equivalent barrels on the Stabroek Block.

“The work our teams have done in Guyana is remarkable,” said Liam Mallon, president of ExxonMobil Development Company. “We are well on our way to producing oil less than five years after our first discovery, which is well ahead of the industry average for similar projects. The Liza development and future projects will provide significant economic benefits to Guyana.”

Liza Phase 1 is expected to generate over $7 billion in royalty and profit oil revenues for Guyana over the life of the project. Additional benefits will accrue from other development projects now being planned. Liza Phase 1 involves the conversion of an oil tanker into a floating, production, storage and offloading (FPSO) vessel named Liza Destiny, along with four undersea drill centers with 17 production wells. Construction of the FPSO and subsea equipment is under way in more than a dozen countries.

Liza Destiny will have a production capacity of 120,000 barrels of oil per day. A second FPSO with a capacity of 220,000 barrels per day is being planned as part of the Liza Phase 2 development, and a third is under consideration for the Payara development. Together, these three developments will produce more than 500,000 barrels of oil per day.

“Guyanese businesses, contractors and employees have been an essential element of our exploration, drilling and development progress,” Mallon said. “Our focus is on enabling local workforce and supplier development, and collaborating with the government to support the growth and success of Guyana’s new energy industry.”

About 50 percent of ExxonMobil’s employees, contractors and subcontractors are Guyanese, a number that will continue to grow as operations progress. ExxonMobil spent about $24 million with more than 300 local suppliers in 2017, and opened the Centre for Local Business Development in Georgetown, Guyana, to promote the establishment and growth of small- and medium-sized local businesses. The centre has enabled access to training and capacity-building support for more than 275 local businesses.

The Stabroek Block is 6.6 million acres (26,800 square kilometers). Esso Exploration and Production Guyana Limited is operator and holds 45 percent interest. Hess Guyana Exploration Ltd. holds 30 percent interest and CNOOC Nexen Petroleum Guyana Limited holds 25 percent interest.

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Chevron, Hess, Kosmos Finalizing 1st Prospect Test in Suriname

(Energy Analytics Institute, Aaron Simonsky, 30.May.2018) ‐- Kosmos Energy, Chevron Corporation and Hess Corporation are close to finalizing prospects tests in Block 42 in Suriname.

The three companies are finalizing the first of up to three independent tests of prospects in Block 42, announced Kosmos in an official statement last week. This includes the Pontoenoe prospect, which is similar to and along trend from discoveries in Guyana. Kosmos expects drilling to commence in the third quarter of 2018.

Kosmos holds rights in the Block 42 contract area under production sharing contracts with Suriname government’s Staatsolie Maatschappij Suriname N.V. Kosmos, the exploration operator of Block 42, holds a 33.33% interest in the block along partners Chevron and Hess, whom each hold a 33.33% interest in the block.
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Hess Acquires Interest in New Acreage Offshore Guyana

(World Oil, 30.Apr.2018) – Hess Corporation has announced that its subsidiary, Hess Guyana (Block B) Exploration Limited, had reached agreement with Esso Exploration and Production Guyana Limited (ExxonMobil) to acquire a 15% participating interest in the Kaieteur Block, offshore Guyana. The Cooperative Republic of Guyana has provided Hess and ExxonMobil an instrument detailing the transfer of interest, which has been completed.

The Kaieteur block is located approximately 155 mi (approximately 250 km) offshore the coast of Guyana, adjacent to the Stabroek Block. The Kaieteur Block is approximately 3.3 million acres (approximately 13,535 km2), which is equivalent in size to more than 580 deepwater blocks in the Gulf of Mexico. The work program in 2018 will include processing and interpretation of approximately 5,700 km2 of 3D seismic data and evaluation of a future drilling program.

Significantly, the Kaieteur Block lies in the same geological basin as the Stabroek Block, where total recoverable resources of more than 3.2 Bboe have been discovered to date. Hess has a 30% working interest in the Stabroek Block.
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ExxonMobil Announces Seventh Oil Discovery Offshore Guyana

(Exxon Mobil, 28.Feb.2018) – Exxon Mobil Corporation announced its seventh oil discovery offshore Guyana, following drilling at the Pacora-1 exploration well.

ExxonMobil encountered approximately 65 feet (20 meters) of high-quality, oil-bearing sandstone reservoir. The well was safely drilled to 18,363 feet (5,597 meters) depth in 6,781 feet (2,067 meters) of water. Drilling commenced on Jan. 29, 2018.

“This latest discovery further increases our confidence in developing this key area of the Stabroek Block,” said Steve Greenlee, president of ExxonMobil Exploration Company. “Pacora will be developed in conjunction with the giant Payara field, and along with other phases, will help bring Guyana production to more than 500,000 barrels per day.”

The Pacora-1 well is located approximately four miles west of the Payara-1 well, and follows previous discoveries on the Stabroek Block at Liza, Payara, Liza Deep, Snoek, Turbot and Ranger.

Following completion of the Pacora-1 well, the Stena Carron drillship will move to the Liza field to drill the Liza-5 well and complete a well test, which will be used to assess concepts for the Payara development. ExxonMobil announced project sanctioning for the Liza phase one development in June 2017. Following Liza-5, the Stena Carron will conduct additional exploration and appraisal drilling on the block.

The Stabroek Block is 6.6 million acres (26,800 square kilometers). Esso Exploration and Production Guyana Limited is operator and holds 45 percent interest in the Stabroek Block. Hess Guyana Exploration Ltd. holds 30 percent interest and CNOOC Nexen Petroleum Guyana Limited holds 25 percent interest.
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ExxonMobil Announces Sixth Oil Discovery Offshore Guyana

(Exxon Mobil, 5.Jan.2018) – Exxon Mobil Corporation announced positive results from its Ranger-1 exploration well, marking ExxonMobil’s sixth oil discovery offshore Guyana since 2015.
The Ranger-1 well discovery adds to previous world-class discoveries at Liza, Payara, Snoek, Liza Deep and Turbot, which are estimated to total more than 3.2 billion recoverable oil-equivalent barrels.

ExxonMobil affiliate Esso Exploration and Production Guyana Ltd. began drilling the Ranger-1 well on Nov. 5, 2017 and encountered approximately 230 feet (70 meters) of high-quality, oil-bearing carbonate reservoir. The well was safely drilled to 21,161 feet (6,450 meters) depth in 8,973 feet (2,735 meters) of water.

“This latest success operating in Guyana’s significant water depths illustrates our ultra deepwater and carbonate exploration capabilities,” said Steve Greenlee, president of ExxonMobil Exploration Company. “This discovery proves a new play concept for the 6.6 million acre Stabroek Block, and adds further value to our growing Guyana portfolio.”

Following completion of the Ranger-1 well, the Stena Carron drillship will move to the Pacora prospect, 4 miles from the Payara discovery. Additional exploration drilling is planned on the Stabroek Block for 2018, including potential appraisal drilling at the Ranger discovery.

The Stabroek Block is 6.6 million acres (26,800 square kilometers). Esso Exploration and Production Guyana Limited is operator and holds 45 percent interest in the Stabroek Block. Hess Guyana Exploration Ltd. holds 30 percent interest and CNOOC Nexen Petroleum Guyana Limited holds 25 percent interest.
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ExxonMobil Announces Fifth Discovery Offshore Guyana

(Exxon Mobil, 5.Oct.2017) – Exxon Mobil Corporation announced it made a fifth new oil discovery after drilling the Turbot-1 well offshore Guyana.

Turbot is ExxonMobil’s latest discovery to date in the country, adding to previous discoveries at Liza, Payara, Snoek and Liza Deep. Following completion of the Turbot-1 well, the Stena Carron drillship will move to the Ranger prospect. An additional well on the Turbot discovery is being planned for 2018.

ExxonMobil affiliate Esso Exploration and Production Guyana Ltd. began drilling the Turbot-1 well on Aug. 14, 2017 and encountered a reservoir of 75 feet (23 meters) of high-quality, oil-bearing sandstone in the primary objective. The well was safely drilled to 18,445 feet (5,622 meters) in 5,912 feet (1,802 meters) of water on Sept. 29, 2017. The Turbot-1 well is located in the southeastern portion of the Stabroek Block, approximately 30 miles (50 kilometers) to the southeast of the Liza phase one project.

“The results from this latest well further illustrate the tremendous potential we see from our exploration activities offshore Guyana,” said Steve Greenlee, president of ExxonMobil Exploration Company. “ExxonMobil, along with its partners, will continue to further evaluate opportunities on the Stabroek Block.”

The Stabroek Block is 6.6 million acres (26,800 square kilometers). Esso Exploration and Production Guyana Limited is operator and holds 45 percent interest in the Stabroek Block. Hess Guyana Exploration Ltd. holds 30 percent interest and CNOOC Nexen Petroleum Guyana Limited holds 25 percent interest.
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ExxonMobil Makes Final Decision Regarding Liza Development

(Exxon Mobil, 16.Jun.2017) – Exxon Mobil Corporation said it has made a final investment decision to proceed with the first phase of development for the Liza field, one of the largest oil discoveries of the past decade, located offshore Guyana.

The company also announced positive results from the Liza-4 well, which encountered more than 197 feet (60 meters) of high-quality, oil-bearing sandstone reservoirs, which will underpin a potential Liza Phase 2 development. Gross recoverable resources for the Stabroek block are now estimated at 2 billion to 2.5 billion oil-equivalent barrels, which includes Liza and other successful exploration wells on Liza Deep, Payara and Snoek.

The Liza Phase 1 development includes a subsea production system and a floating production, storage and offloading (FPSO) vessel designed to produce up to 120,000 barrels of oil per day. Production is expected to begin by 2020, less than five years after discovery of the field. Phase 1 is expected to cost just over $4.4 billion, which includes a lease capitalization cost of approximately $1.2 billion for the FPSO facility, and will develop approximately 450 million barrels of oil.

“We’re excited about the tremendous potential of the Liza field and accelerating first production through a phased development in this lower cost environment,” said Liam Mallon, president, ExxonMobil Development Company. “We will work closely with the government, our co-venturers and the Guyanese people in developing this world-class resource that will have long-term and meaningful benefits for the country and its citizens.”

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 programs and services.

The development received regulatory approval from the government of Guyana.

The Liza field is approximately 190 kilometers offshore in water depths of 1,500 to 1,900 meters. Four drill centers are envisioned with a total of 17 wells, including eight production wells, six water injection wells and three gas injection wells.

The Liza field is part of the Stabroek Block, which measures 6.6 million acres, or 26,800 square kilometers. Esso Exploration and Production Guyana Limited is operator and holds a 45 percent interest in the block.

Hess Guyana Exploration Ltd. holds a 30 percent interest and CNOOC Nexen Petroleum Guyana Limited holds 25 percent.

Esso Exploration and Production Guyana Limited is continuing exploration activities and operates three blocks offshore Guyana – Stabroek, Canje and Kaieteur. Drilling of the Payara-2 well on the Stabroek block is expected to commence in late June and will also test a deeper prospect underlying the Payara oil discovery.
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ExxonMobil Announces New Oil Discovery Offshore Guyana

(Exxon Mobil, 30.Mar.2017) – Exxon Mobil Corporation announced positive results on the Snoek well offshore Guyana, confirming a new discovery on the Stabroek Block. Drilling targeted similar aged reservoirs as encountered in previous discoveries at Liza and Payara.

“The latest discovery at Snoek demonstrates the continued success we have achieved in this technically complex play, which is just part of the significant exploration province offshore Guyana,” said Steve Greenlee, president of ExxonMobil Exploration Company.

ExxonMobil affiliate Esso Exploration and Production Guyana Ltd. commenced drilling of the Snoek well on Feb. 22, 2017 and encountered 82 feet (25 meters) of high-quality, oil-bearing sandstone reservoirs. The well was safely drilled to 16,978 feet (5,175 meters) in 5,128 feet (1,563 meters) of water on March 18. The Snoek well is located in the southern portion of the Stabroek Block, approximately 5 miles (9 km) to the southeast of the 2015 Liza-1 discovery.

Following completion of the Snoek well, the Stena Carron drillship has moved back to the Liza area to drill the Liza-4 well.

“As we continue to evaluate the full potential of the broader Stabroek Block, we are also taking the necessary steps to ensure the safe, cost-efficient and responsible development of this world-class resource, which can provide long-term, sustainable benefits to the people of Guyana,” said Greenlee.

The Stabroek Block is 6.6 million acres (26,800 square kilometers). Esso Exploration and Production Guyana Limited is operator and holds 45 percent interest in the Stabroek Block. Hess Guyana Exploration Ltd. holds 30 percent interest and CNOOC Nexen Petroleum Guyana Limited holds 25 percent interest.
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Guyana’s Initial Oil Output to Surpass Trinidad

(Energy Analytics Institute, Pietro D. Pitts, 2.Mar.2017) – Sleepy Guyana is gearing up to surpass twin-island nation Trinidad and Tobago in terms of oil production.

Production plans by Irving, Texas-based Exxon Mobil Corporation at the promising Stabroek Block offshore Guyana will assist the small country to initially produce more oil than its Caribbean neighbor Trinidad, which has been producing oil for over a century.

Exxon — which plans to make an investment decision later this year regarding finds at the Stabroek Block, including the Liza, Liza deep and Payara wells – expects production of 100,000 barrels per day in 2020 in the initial phase using a Float Production, Storage and Offloading (FPSO) unit, said Jeff Woodbury, Exxon Mobil Vice President of Investor Relations during a conference call on January 31, 2017.

“Guyana is to become the newest petrostate. It has two neighbors from which to learn what to do, Trinidad, and what not to do, Venezuela,” Francisco J. Monaldi, Ph.D. and Fellow in Latin American Energy Policy & Lecturer in Energy Economics at Rice University’s Baker Institute for Public Policy wrote in a twitter post.

The Stabroek Block covers 6.6 million acres (26,800 square kilometers). The operator of the block is Esso Exploration and Production Guyana Limited with a 45 percent interest. Other partners in the block include: Hess Guyana Exploration Ltd. with a 30 percent interest and CNOOC Nexen Petroleum Guyana Limited with a 25 percent interest.

Trinidad produced an average of around 72,000 barrels per day in the eleven months between January and November of 2016, according to data published in a bulletin by the country’s Ministry of Energy and Energy Industries.

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ExxonMobil Announces New Oil Discoveries Offshore Guyana

(Exxon Mobil, 12.Jan.2017) – Exxon Mobil Corporation announced positive results from its Payara-1 well offshore Guyana. Payara is ExxonMobil’s second oil discovery on the Stabroek Block and was drilled in a new reservoir. The Payara-1 well targeted similar aged reservoirs that were proven successful at the company’s Liza discovery.

“This important discovery further establishes the area as a significant exploration province,” said Steve Greenlee, president of ExxonMobil Exploration Company. “We look forward to working with the government and our co-venturers to continue evaluating broader exploration potential on the block and the greater Liza area.”

The well was drilled by ExxonMobil affiliate Esso Exploration and Production Guyana Limited, and encountered more than 95 feet (29 meters) of high-quality, oil-bearing sandstone reservoirs. It was safely drilled to 18,080 feet (5,512 meters) in 6,660 feet (2,030 meters) of water. The Payara field discovery is about 10 miles (16 km) northwest of the 2015 Liza discovery.

In addition to the Payara discovery, appraisal drilling at Liza-3 has identified an additional high quality, deeper reservoir directly below the Liza field, which is estimated to contain between 100-150 million oil equivalent barrels. This additional resource is currently being evaluated for development in conjunction with the world-class Liza discovery.

“These latest exploration successes are examples of ExxonMobil’s technological capabilities in ultra-deepwater environments, which will enable effective development of the resource for the benefit of the people of Guyana and our shareholders,” Greenlee said.

Drilling on Payara began on Nov. 12 with initial total depth reached on Dec. 2. Two sidetracks have been drilled to rapidly evaluate the discovery, and a well test is underway to further evaluate the successful well results. The well data will be analyzed in the coming months to better determine the full resource potential.

The Stabroek Block is 6.6 million acres (26,800 square kilometers). Esso Exploration and Production Guyana Limited is operator and holds 45 percent interest in the Stabroek Block. Hess Guyana Exploration Ltd. holds 30 percent interest and CNOOC Nexen Petroleum Guyana Limited holds 25 percent interest.
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ExxonMobil Awards Key Contracts for Liza in Guyana

(Exxon Mobil, 20.Dec.2016) – Exxon Mobil Corporation subsidiary, Esso Exploration and Production Guyana Limited (EEPGL), announced that it has awarded contracts to SBM Offshore for a floating production, storage and offloading (FPSO) vessel, a key step in moving the Liza field toward first production.

Under the contracts, SBM Offshore will perform front end engineering and design for the FPSO, and, subject to a final investment decision on the project in 2017, will construct, install and operate the vessel.

“Liza development activities are steadily progressing, and we’re excited to reach this important milestone,” said Neil Duffin, president of ExxonMobil Development Company. “We look forward to working with the government of Guyana to develop its valuable resources, which have the potential to provide long-term, sustainable benefits to the country.”

ExxonMobil submitted an application for a production license and its initial development plan for the Liza field in early December. The development plan, submitted to the Guyana Ministry of Natural Resources, includes development drilling, operation of the FPSO, and subsea, umbilical, riser and flowline systems.

The Liza field has a potential recoverable resource estimate in excess of 1 billion oil-equivalent barrels and is located in the Stabroek block approximately 120 miles (193 kilometers) offshore Guyana.

The Stabroek block currently comprises 6.6 million acres (26,800 square kilometers). Esso Exploration and Production Guyana Limited is the operator and holds a 45 percent interest in the Stabroek block. Hess Guyana Exploration Ltd. holds a 30 percent interest, and CNOOC Nexen Petroleum Guyana Limited holds a 25 percent interest.
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ExxonMobil’s 2nd Well Offshore Guyana Confirms Oil

(Exxon Mobil, 30.Jun.2016) – Exxon Mobil Corporation said that drilling results from the Liza-2 well, the second exploration well in the Stabroek block offshore Guyana, confirm a world-class discovery with a recoverable resource of between 800 million and 1.4 billion oil-equivalent barrels.

“We are excited by the results of a production test of the Liza-2 well, which confirms the presence of high-quality oil from the same high-porosity sandstone reservoirs that we saw in the Liza-1 well completed in 2015,” said Steve Greenlee, president of Exxon Mobil Exploration Company. “We, along with our co-venturers, look forward to continuing a strong partnership with the government of Guyana to further evaluate the commercial potential for this exciting prospect.”

The Liza wells are located in the Stabroek block approximately 120 miles (193 kilometers) offshore Guyana. Data from the successful Liza-2 well test is being assessed.

The Liza-2 well was drilled by ExxonMobil affiliate Esso Exploration and Production Guyana Ltd., approximately 2 miles (3.3 km) from the Liza-1 well. The Liza-2 well encountered more than 190 feet (58 meters) of oil-bearing sandstone reservoirs in Upper Cretaceous formations. The well was drilled to 17,963 feet (5,475 meters) in 5,551 feet (1,692 meters) of water.

“This exploration success demonstrates the strength of our long-term investment approach, as well as our technology leadership in ultra, deepwater environments,” said Greenlee.

The Stabroek block is 6.6 million acres (26,800 square kilometers). Esso Exploration and Production Guyana Limited is operator and holds 45 percent interest in the Stabroek block. Hess Guyana Exploration Ltd. holds 30 percent interest and CNOOC Nexen Petroleum Guyana Limited holds 25 percent interest.
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ExxonMobil Reports Significant Oil Discovery Offshore Guyana

(Exxon Mobil, 20.May.2016) – Exxon Mobil Corporation announced a significant oil discovery on the Stabroek Block, located approximately 120 miles offshore Guyana.

The well was drilled by ExxonMobil affiliate, Esso Exploration and Production Guyana Ltd., and encountered more than 295 feet (90 meters) of high-quality oil-bearing sandstone reservoirs. It was safely drilled to 17,825 feet (5,433 meters) in 5,719 feet (1,743 meters) of water. Stabroek Block is 6.6 million acres (26,800 square kilometers).

“I am encouraged by the results of the first well on the Stabroek Block,” said Stephen M. Greenlee, president of ExxonMobil Exploration Company. “Over the coming months we will work to determine the commercial viability of the discovered resource, as well as evaluate other resource potential on the block.”

The well was spud on March 5, 2015. The well data will be analyzed in the coming months to better determine the full resource potential.

Esso Exploration and Production Guyana Ltd. holds 45 percent interest. Hess Guyana Exploration Limited holds 30 percent interest and CNOOC Nexen Petroleum Guyana Limited holds 25 percent interest.
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