Exxon Mobil Corp. and partner Hess Corp. said May 3 they have sanctioned the $6 billion Liza Phase 2 development offshore Guyana, targeting some 600 million barrels of oil.
The decision was delivered after Guyanese authorities gave the go-ahead for the development, the companies said in separate news releases.
The massive project, the result of successful exploration efforts led by Exxon Mobil affiliate Esso Exploration and Production Guyana Ltd., will comprise six drill centers along with about 30 wells, including 15 producers, nine water injectors and six gas injection wells.
Developers aim to start production by mid-2022, producing up to 220,000 barrels of oil per day (bbl/d) from the Liza Unity FPSO.
“With the government of Guyana and our partners, Exxon Mobil is bringing industry-leading upstream capabilities to build upon Phase 1 and further develop the shared value of Guyana’s resources,” Liam Mallon, president of Exxon Mobil Upstream Oil & Gas Co., said in a statement. “We are actively pursuing significant development potential from numerous discoveries in the Stabroek Block.”
Exxon Mobil and partners have made 13 discoveries on the block, which spans 26,800 sq km offshore Guyana. The latest find was announced in mid-April when the Yellowtail-1 well, the fifth discovery in the Turbot area, struck oil.
Estimated recoverable resources discovered on the block are about 5.5 billion barrels of oil equivalent. But this could change as exploration activities continue on the block, with a handful of drillships either working or getting ready for work.
“Following well completion activities at the recently announced Yellowtail discovery, the Noble Tom Madden will move to the Hammerhead-2 well. The Stena Carron is completing a well test at the Longtail-1 discovery, and will then move to the Hammerhead-3 well,” Exxon Mobil aid. “Later in 2019, the Stena Carron will drill a second well at the Ranger discovery.”
Noble Don Taylor will join the fleet in fourth-quarter 2019.
Meanwhile, development work is progressing.
The play-opening Liza Phase 1 remains on track for first oil by first-quarter 2020, Exxon Mobil said, noting the Noble Bob Douglas drillship is wrapping up development drilling. The plan includes four drill centers with 17 wells, including eight producers, six water injectors and three gas injectors.
Utilizing the Liza Destiny FPSO, peak production of up to 120,000 bbl/d is expected. The FPSO is due to arrive in third-quarter 2019, the company said.
Liza Phase 1 was sanctioned in 2017.
Hess, which holds a 30% interest in the block, said its share of the development cost for Liza 2 will be about $1.6 billion. About $210 million is already included in the company’s 2019 capital and exploratory budget.
“We are excited to achieve another significant milestone in the development of the Stabroek Block,” CEO John Hess said in a company statement. “We look forward to continuing to work with the government of Guyana and our partners to realize the extraordinary potential of this world-class resource.”
The companies are expected to make a final investment decision later this year for Payara, a third phase of development on the block. If regulatory approvals are secured and partners sanction the project, it would make way for the production of between 180,000 and 220,000 bbl/d in 2023.
More is anticipated, given the number of discoveries made so far.
“Following the recent Yellowtail and Tilapia discoveries, the Turbot area is also expected to become another major development hub, and additional development potential is being evaluated in other areas of the Stabroek Block including at Hammerhead,” Hess said.
CNOOC Ltd. holds the remaining 25% interest in the block.
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