Guyana: The World’s Next Offshore Oil Hotspot

(Oilprice.com, Tsvetana Paraskova, 23.Oct.2018) — With population of fewer than 750,000 people, Guyana—a neighbor of Venezuela—has always depended on commodities. Sugar, gold, shrimp, timber, bauxite, and rice account for nearly 60 percent of this South American country’s gross domestic product (GDP). Now, Guyana is set to add another valuable commodity to that list.

In 2015, ExxonMobil—whose market capitalization is roughly 100 times Guyana’s GDP—made its first oil discovery offshore Guyana, adding another very precious commodity to the tiny nation’s potential product slate.

Three years and dozens of new oil discoveries later, Guyana is set to produce its own oil for the first time ever, in 2020.

Over the past couple of years, the success rate of discoveries has been phenomenal, analysts say, and some expect that Guyana could be on the road to joining the few non-OPEC nations in the world capable of producing more than 1 million bpd of oil.

Analysts warn that potential development challenges—considering that the area has never produced oil and lacks infrastructure—and the resource curse may spoil the Guyana offshore oil party.

But as things stand now, there are more optimists than pessimists that Venezuela’s small neighbor to the east could become an oil producer capable of plugging part of the conventional oil supply gap next decade. Attractive fiscal terms, scale of resource, and reservoir quality are all there in the Liza complex operated by Exxon, according to Wood Mackenzie analysts, who estimate that the complex has accounted for 15 percent of all conventional crude oil found globally since 2015.

Two months ago, Exxon announced a ninth oil discovery offshore Guyana, which adds to already estimated resource of more than 4 billion oil-equivalent barrels discovered to date.

Exxon expects Liza Phase 1 to start producing oil by early 2020, via a floating production storage and offloading (FPSO) vessel—up to 120,000 bpd.
The Guyana discoveries have the potential for up to five FPSO vessels producing more than 750,000 bpd by 2025, Exxon says.

“Guyana has hit the jackpot,” Maria Cortez, Latin America upstream senior research manager with Wood Mackenzie, said in August, commenting on Exxon’s ninth discovery.

“If this small South American nation with, a population of about 750,000, can properly manage the billions of dollars of revenue about to come its way, it may become the richest corner of the continent.”

In Orinduik Block, another block offshore Guyana, Eco (Atlantic) Oil & Gas, which is partnering with operator Tullow Oil, announced last month that an independent analysis found that there are at least ten exploration leads with close to 3 billion barrels of recoverable oil potential in the Orinduik Block. Tullow Oil and Eco plan to drill their first well in the block in early Q3 2019.
“Guyana is the jewel in the crown, the mother of dragons. That is the hottest exploration area in the world. It’s no longer frontier, it’s a sub-mature basin,” Eco’s chief executive Gil Holzman told S&P Global Platts in an interview this month.

Guyana is a “paradise” for exploring because of the enormous resource of pure, sweet, light oil that is much easier to refine than the heavy crude of its neighbor Venezuela, Holzman said.

The exploration success rate for commercial discoveries in the Stabroek block, where Exxon has been striking more and more oil in recent years, is an “astronomical” 82 percent, compared to global industry average of below 20 percent, according to WoodMac.

The size of reserves and reservoir quality underpin the economics in the block, with project break-even of below US$40 a barrel, the energy consultancy says.

Few oil producing countries pump more than 1 million bpd—there are just ten such producers outside OPEC—the U.S., Canada, Mexico, the UK, Norway, China, Brazil, Oman, Russia, and Kazakhstan.

“New admissions to the group don’t happen very often,” Simon Flowers,Chairman and Chief Analyst at Wood Mackenzie, wrote last month.

“Guyana, with no upstream oil industry four years ago, has a very good chance of joining this elite group,” Flowers noted.

The basin as a whole may hold another 8-10 billion barrels of oil equivalent of reserves, WoodMac has estimated, but warned that extrapolating success rate can be pretty unreliable.

Guyana has the resource potential, the reservoir quality, and the favorable fiscal regime to unlock its oil potential. Rystad Energy estimates that under the current tax regime, the government will have 60 percent of the profit from various projects—more favorable than many other large offshore producers, with the government take for all offshore projects around 75 percent on average.

Rystad Energy expects Guyana’s total oil production to exceed 600,000 bpd by the end of the next decade, generating annual revenue of US$15 billion from the oil and gas industry and some US$10 billion of profit that could be split between the companies and the government.

While oil companies flock to explore promising offshore Guyana waters, the country faces a difficult task going forward—will it escape the resource curse?

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#LatAmNRG

Guyana May be the Next Big Beast in Global Oil

(The National, Robin Mills, 8.Oct.2018) — One of the few major new conventional oil provinces discovered this century could see the country emerge as the top per capita producer.

Who will be the world’s largest oil producing country per person in the 2020s?

Kuwait perhaps, with 3 million barrels per day and a population just over 4 million? Saudi Arabia or, looking further afield, Brunei or Norway? No, that honour will belong to the South American nation of Guyana, which could well be sharing output of 700,000 barrels per day among just 770,000 people.

Although adjacent to Venezuela, Guyana has been better known for sugarcane, and cricketers such as Clive Lloyd, Lance Gibbs and Shivnarine Chanderpaul, than oil. But after first striking oil at Liza in 2015, ExxonMobil and partners Hess and China National Offshore Oil Corporation have made seven major discoveries in deep offshore waters, with production due to start in 2020.

Other companies, including Spain’s Repsol and African-focused explorer Tullow, are also looking. And the trend may extend into the former Dutch colony of Suriname to the east. Beyond Suriname is the overseas French department of French Guiana, where Tullow found oil in 2011 although follow-up exploration has been disappointing.

Guyana is one of the few major new conventional oil provinces discovered this century, along with the Kurdistan region of Iraq (which has subsequently disappointed) and India’s Rajasthan in 2004, Brazil’s “pre-salt” and Uganda in 2006, Ghana in 2007 and perhaps Senegal in 2014. After just four years of exploration drilling, Guyana is already set to be the biggest of these after Brazil. Estimated production costs of $46 per barrel are well below current oil prices, and competitive with shale or other leading deep-water areas.

Unlike the US’ mostly very light shale oil, Guyana’s is a medium-light crude closer to major Middle East grades. Likely to be rich in diesel when refined, it helps fill a hole in the world’s crude diet.

Finding new conventional oil is important for the global industry. Companies such as Shell, Total and Eni have increasingly shifted to gas, which has proved much easier to discover in quantity, while BP and their American peers, ExxonMobil, Chevron and ConocoPhillips, have focused on US shale. Both the International Energy Agency and Opec warn of under-investment and a coming oil crunch, but the major oil reserves in Opec countries and Russia are mostly closed off to international firms by government policy, insecurity and sanctions.

If the discoveries are significant for the world, they will be transformational for Guyana. Gross oil revenues of some $13 billion annually by the mid-2020s, or about $17,000 per inhabitant, contrast to its 2016 GDP of just $3.4bn. Only some 14 per cent of this will come to the government for the first two to three years while costs are paid off, but this is still an enormous bonanza.

But, like other new oil states, Guyana has to manage the perils of a sudden influx of wealth. It has good advice, as a member of the New Producers Group, an initiative of UK think tank Chatham House, the Natural Resource Governance Institute, and the Commonwealth, which brings together experts, politicians, government and civil society from a number of newly-established oil- and gas-producing countries.

These problems are well known but not so easy to solve. Government faces the risks of corruption, nepotism and patronage; a weakening of democracy; over-spending and vulnerability to falls in oil prices; and a lack of capability to manage oil operations and tax collection. The economy is threatened by conflicts over fiscal terms with the oil companies; the temptation to introduce wasteful energy subsidies; inflation and currency over-appreciation; and a loss of competitiveness from the non-oil sector. And the local population confronts unrealistic expectations of sudden wealth; an influx of outsiders; and environmental damage.

These issues are particularly salient for Guyana, a relatively small and poor country with quite high levels of corruption. It also neighbours troubled Venezuela, which has claimed two-thirds of its territory. Some Guyanese worry that the valuable work of oil services and contracting, a way to develop the domestic economy and skills, will be mostly supplied by next-door Trinidad and Tobago, which has a long-standing petroleum industry. The large gas resources found along with the oil also have to be used responsibly.

Much has been learned about potential solutions over the past two decades, though they come with their own conundrums. A sovereign wealth fund, like the Abu Dhabi Investment Authority or Norway’s oil fund, avoids a too-sudden influx of money; stabilises the government budget against oil price volatility; and saves for future generations. A robust political process and rules are needed to ensure the fund is not raided or diverted for pet projects.

A national oil company (NOC) helps build skills and strengthen the management of the sector. But it should not become a vehicle for handing out jobs to cronies or politicised meddling in the industry. Experienced lawyers, accountants, geologists and others are needed to staff a NOC and a petroleum regulator, and cannot be spread too thinly.

It is essential to educate the government machinery, media and civil society, so they understand how much money is coming in, and have a voice in how it is used. Bodies such as the Extractive Industries Transparency Initiative (EITI) report on oil revenues and their allocation.

Guyanese are fortunate to have contrasting examples next door in Venezuela of how a mismanaged oil sector can ruin a country; and Trinidad, where petroleum has generally been positive for the country.

International help and goodwill will hopefully ensure their oil is a bonus not just for the world economy but for the people.

Robin M. Mills is CEO of Qamar Energy, and author of The Myth of the Oil Crisis

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Shawcor to Provide Pipe Coating Services for Guyana Deepwater Projects

(Shawcor Ltd. 4.Oct.2018) — Shawcor Ltd. (SCL) announced that its pipe coating division has been assigned work from Saipem valued at approximately C$110 million to provide thermal insulation and anticorrosion coating services for the Liza I and II deepwater development projects located offshore Guyana.

Coating work under the Liza I project commenced in March 2018 at Shawcor’s Channelview, Texas facility and additional work will be completed at Shawcor’s Veracruz, Mexico facility. Work on Liza 1 is expected to be completed during the first quarter of 2019. Coating work under the larger Liza II project, which is conditional on a Final Investment Decision, or “FID”, by the pipeline operator, is expected to be executed at the Veracruz and Channelview facilities.

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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

***

ExxonMobil Adds Ninth Discovery Offshore Guyana

(ExxonMobil, 30.Aug.2018) — Irving, Texas-based ExxonMobil has made its ninth discovery offshore Guyana at the Hammerhead-1 well, marking its fifth discovery on the Stabroek Block in the past year and proving a new play concept for potential development.

Hammerhead-1 encountered approximately 197 feet (60 meters) of high-quality, oil-bearing sandstone reservoir. The well was safely drilled to 13,862 feet (4,225 meters) depth in 3,773 feet (1,150 meters) of water. The Stena Carron drillship began drilling on July 27, 2018.

“The Hammerhead-1 discovery reinforces the potential of the Guyana basin, where ExxonMobil is already maximizing value for all stakeholders through rapid phased developments and accelerated exploration plans,” said Steve Greenlee, president of ExxonMobil Exploration Company. “Development options for Hammerhead will take into account ongoing evaluation of reservoir data, including a well test.”

Hammerhead-1 is located approximately 13 miles (21 kilometers) southwest of the Liza-1 well and follows previous discoveries on the Stabroek Block at Liza, Liza Deep, Payara, Snoek, Turbot, Ranger, Pacora and Longtail. Those previous discoveries led to the announcement of an estimated recoverable resource of more than 4 billion oil-equivalent barrels discovered to date, and the potential for up to five floating production, storage and offloading (FPSO) vessels producing more than 750,000 barrels per day by 2025.

There is potential for additional production from significant undrilled targets and plans for rapid exploration and appraisal drilling. A second exploration vessel, the Noble Tom Madden, is due to arrive in Guyana in October to accelerate exploration of high potential opportunities and will commence drilling at the Pluma prospect approximately 17 miles (27 kilometers) from Turbot.

Liza Phase 1, which is expected to begin producing oil by early 2020, will use the Liza Destiny FPSO vessel to produce up to 120,000 barrels of oil per day. Construction of the FPSO and subsea equipment is well advanced. Pending government and regulatory approvals, Phase 2 is targeted for sanctioning by the end of this year. It will use a second FPSO designed to produce up to 220,000 barrels per day and is expected to be producing in 2022. A third development, Payara, will target sanctioning in 2019 and use an FPSO designed to produce approximately 180,000 barrels of oil per day as early as 2023.

The Stabroek Block is 6.6 million acres (26,800 square kilometers). ExxonMobil affiliate, 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 ‘Astonishing’ Future

(Trinidad Express, David Renwick, 31.Jul.2018) – The US’s leading oil company, ExxonMobil, continues to make discovery after discovery in its Stabroek block offshore Guyana, the latest being Longtail 1 – its eighth so far. The company says this “creates the potential for additional resource development in the south east area of the block.”

Longtail 1 encountered approximately 256 feet of high-quality oil-bearing sandstone reservoir and was drilled safely to 8,057 feet, in water depth of 6,365 feet.

Read the full story online.

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Guyana: Will its Oil Boom Benefit the People?

(Al Jazeera English, 30.Jul.2018) – Oil companies have identified massive offshore reserves in Guyana, one of South America’s poorest nations. New estimates last week report that more than 4 billion barrels of oil could be extracted from a region known as the Stabroek block, where ExxonMobil expects to start pumping crude from in 2020. The country is poised to become a major energy supplier, but not everyone is optimistic about the potential for oil revenue to benefit Guyanese citizens. So what can Guyana do to avoid becoming another poor, yet resource-rich nation?

On this episode of The Stream, we speak with:

— Christopher Ram

Lawyer and newspaper columnist

chrisram.net

— Jan Mangal

Former petroleum advisor, President David A. Granger

linkedin.com

— Lisa Sachs @CCSI_Columbia

Director, Columbia Center on Sustainable Investment

ccsi.columbia.edu

— Imran Khan @imrankhangy

Press Secretary, Prime Minister Moses Nagamootoo

dpi.gov.gy

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ExxonMobil Raises Stabroek Block to More Than 4 Bln Bbls

(ExxonMobil, 23.Jul.2018 ) – ExxonMobil has increased its estimate of the discovered recoverable resources for the Stabroek Block offshore Guyana to more than 4 billion oil-equivalent barrels and has advanced its evaluation to support a third phase of development and consideration of two additional phases.

The increase follows completion of testing at the Liza-5 appraisal well, a discovery at Ranger, incorporation of the eighth discovery, Longtail, into the Turbot area evaluation and completion of the Pacora discovery evaluation. The previous recoverable resource estimate was 3.2 billion oil-equivalent barrels.

“Outstanding resource quality across these opportunities combined with industry-leading project execution capabilities will provide great value to resource owners, partners and our shareholders,” said Neil Chapman, senior vice president, Exxon Mobil Corporation.

“Continued success in Guyana and progress in other upstream growth projects in the U.S. Permian Basin, Mozambique, Papua New Guinea and Brazil are giving us additional confidence in achieving our long-term earnings growth plans that we outlined in March.”

Guyana’s first development, Liza Phase 1, will use a floating production, storage and offloading (FPSO) vessel to produce 120,000 barrels of oil per day, starting by early 2020. Liza Phase 2, which is targeted for sanctioning by the end of this year, will use an FPSO vessel designed to produce up to 220,000 barrels of oil per day and is expected to be producing by mid-2022.

The Liza-5 well successfully tested the northern portion of the Liza field and, along with the giant Payara field, will support a third phase of development in Guyana. The Payara development will target sanctioning in 2019 and will use an FPSO vessel designed to produce approximately 180,000 barrels of oil per day, as early as 2023.

The Longtail well established the Turbot-Longtail area as a potential development hub for recovery of more than 500 million oil-equivalent barrels. Additional prospects to be drilled in this area could increase this estimate.

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. There is potential for additional production from significant undrilled targets and plans for rapid exploration and appraisal drilling, including at the Ranger discovery.

The Stabroek Block is 6.6 million acres (26,800 square kilometers). ExxonMobil affiliate, 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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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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Could Guyana’s Oil Fortunes Curse Country?

(Energy Analytics Institute, Pietro D. Pitts, 8.Jul.2018) – Recent success in Guyana’s oil sector could be a wolf in sheep’s clothing.

Guyana doesn’t yet produce oil but in coming years its oil output is expected to surpass that of Peru and Trinidad and Tobago and could approach that of Ecuador, one of two lone OPEC producing countries in South America.

Having the world’s largest oil reserves, the first LNG export terminal in the Americas, or large gas reserves doesn’t mean all a country’s political, economic and social problems will be solved. Just ask Venezuela, Trinidad and Tobago, and Bolivia, respectively. Case studies of these three countries have shown that not just countries in Africa, such as Nigeria, are vulnerable to the Dutch Disease even in the 21st Century.

A look just at Guyana’s poor Corruption Perceptions Index ranking from Transparency International, much lower than the average for the Americas indicates the government is failing in efforts to tackle corruption.

It is hardly likely that Guyana’s faith will change by 2020 when the oil starts flowing and revenues start to climb. What will happen then is almost predictable unless a miracle happens between now and then.

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Trinidad, Guyana and Suriname: Challenges

(AIPN, 27.Jun.2018) – Petroleum consultants and other energy sector experts will discuss the challenges and opportunities in Trinidad & Tobago, Guyana and Suriname during a discussion in London.

The select group will consist of Kevin Ramnarine, former Trinidad & Tobago Energy Minister (2014-15); Energy Strategic Advisor and Lecturer Carlos Bellorin, Principal Consultant, IHS Markit; Lecturer, Queen Mary University and SciencesPo Ekpen Omondude, former Senior Economic Adviser, The Commonwealth Secretariat (2008-2018); Director, Bargate Advisory Limited.

DISCUSSION BRIEF

With the discovery of Liza-1 within the Stabroek Block by ExxonMobil and its partners in 2015 – and after years of frustrating exploratory results – all eyes have been on the Southern Caribbean. After Liza-1 and the seven discoveries that followed (including Longtail-1 announced on 20 June 2018), the Guyana-Suriname Basin has all but confirmed its massive potential. On neighbouring sides of Guyana, the E&P outlook has also changed after 2015.

To the east in Trinidad & Tobago – one of the more mature producers in the region – successive governments have tried to bring the island’s hydrocarbons industry to the attention of investors with limited success. Without any significant recent discoveries, Trinidad & Tobago will need to improve its performance and hydrocarbons regime. This will be necessary to replace reserves and increase production if it is to maintain its gas-linked economy and leadership as a gas producer.

To the west lies Suriname. After recent wells have come up dry, it needs (at least) a commercial discovery to finally confirm its long-coveted potential. Venezuela also plays a pivotal role in regards these two, smaller, nations: an embattled Venezuela is currently engaged in a high-profile boundary dispute with Guyana and could enter into a strategic partnership with Trinidad & Tobago over two key gas fields.

During this session, we will touch on the most critical issues from these three countries, including comments on their legal-fiscal regimes and political risk while looking forward to their challenges and opportunities. We will offer an on-the-ground view of one the hottest new deepwater provinces in the world.

WHEN: Thursday, June 28, 2018 (5pm – 8:30pm Europe/London)
COORDINATOR: Akin Gump
VENUE: Bishops Square
WHERE: London E1 6EG United Kingdom

Registration will be from 5:00 – 5:30 p.m., followed by the presentations and Q&A until 7:00 p.m. A networking reception with drinks and canapes will follow from 7:00 – 8:30 p.m.

Online registration has been closed. On-site registration will be on a space available basis and is complimentary for all members and non-members. If you have any questions, please contact Carlos Bellorin at Carlos.Bellorin@ihsmarkit.com

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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 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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The Caribbean Poised To Become Major Oil Region

(OilPrice.com, Haley Zaremba, 22.Aug.2017) – In the future, we may be hearing about the Caribbean a whole lot more when talking about oil and gas. Previously, the area was virtually off the map for the fossil fuels industry, despite its proximity to the vast oil reserves of Venezuela. Now, the Caribbean has suddenly become a point of interest since ExxonMobil discovered major reservoirs in nearby Guyana in 2015.

After their initial huge discovery of the Liza oil field 2 years ago, Exxonmobil also announced last month that they’ve discovered more oil in the Payara reservoir off the coast of Guyana, increasing the total discovery to approximately 500 million barrels. This is huge news for both Exxonmobil and for Guyana, which ranks among the poorest countries in the Western Hemisphere.

ExxonMobil (partnered with Hess Corp. and Statoil) has also recently purchased a new deepwater block for exploration off the coast of neighboring Suriname, another potentially oil-filled nation. Some in the industry are already referring to the Guyana-Suriname Basin as the next big oil region.

Now, those good fortunes could be spreading to the Caribbean as well. Trinidad and Tobago has long been the Caribbean’s largest oil and gas producer. The nation has depended economically on their petroleum reserves since the 1990s, with the energy sector currently comprising 34.9 percent of the country’s GDP. However, more recently the small island-nation’s production has been in decline as production from mature fields has waned and exploration for new fields has been slow in starting. Now, Trinidad and Tobago is hoping that the discoveries in nearby Guyana will bring more interest and investment to the Caribbean.

It’s looking like Trinidad and Tobago will get their wish. Just this month BP Trinidad and Tobago announced two major discoveries totaling approximately two trillion cubic feet (tcf) of gas, which the company’s president called “the start of a rejuvenated exploration program on the Trinidad shelf”.

Similarly encouraged by the massive discoveries in Guyana over the last few years and the foreign interest it has garnered, several other Caribbean nations are beginning to assert themselves as potentially oil-rich countries and attempting to woo foreign companies to start investing in exploration around their islands. One of the biggest examples of this is Jamaica, who have recently caught the attention of UK-based Tullow Oil.

Last week Tullow announced plans to return to offshore locations off the southern coast of Jamaica to explore a field of “live oil” that was brought to their attention by local fisherman earlier this year. The firm will ramp up their 3D seismic surveys this year in hopes that the floating oil will lead them to vast oil fields the likes of their neighbors to the south and the nearby Gulf of Mexico.

The Bahamas has also recently publicized their plans to invite international companies to drill in deep waters off the coast, pointing not only to Guyana and the Gulf, but also to neighboring Cuba’s oil reserves as an indication of what treasures may be laying under the surface of the sparkling Caribbean Sea.

Exploration of oil reserves in the Caribbean may also soon be ramped up and revolutionized by major technological advancements from Ursa Space Systems. The high-tech company has announced a planned expansion to take a global oil inventory, with the Caribbean as one of its first major surveyed regions. Ursa will use satellite imagery to provide reliable and independent weekly inventories of oil stocks down to the tank level for easy calculations and better insight on oil supply and demand, especially in areas of the world where there has previously not been readily-available data.

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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 Success in Guyana Continues

(Energy Analytics Institute, Piero Stewart, 16.Jan.2017) – ExxonMobil’s successful drilling streak continues in Guyana as the Irving, Texas-based company announced positive results from its second offshore well Payara-1, also located on the Stabroek Block.

The well, located just 16 kilometers from the earlier game-changing Liza discovery, encountered over 29 meters of high-quality, oil-bearing sandstone reservoirs.

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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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