Government, along with Opposition Leader Bharrat Jagdeo, met yesterday with officials of U.S. oil and gas major ExxonMobil for updates on the promising oil discovery.
The gathering at the Marriott Hotel was described as what Natural Resources Minister Raphael Trotman said was a high-level meeting between the oil company and members of Guyana’s Parliament.
According to Trotman, there is undoubtedly good news coming from the development of the Liza reports.
“What is different about this briefing, there seems to be good news about the actual development of the Liza reports and how we intend to take it to production in 2020 and give updates on new techniques that will be deployed,” he said to Exxon officials and Cabinet members present.
According to Trotman, the presentation is more of a technical one and is the beginning of a series of engagement which will begin with policymakers, but will extend to Guyanese, both at home and in the diaspora.
Opposition Leader Jagdeo, in comments following the meeting, said while he did not want to divulge the content of the meeting, he did seek some clarification from the U.S. team about several issues discussed in the meeting. Those concerns were raised when the team visited his office, after the official meeting at the Marriott Hotel.
Following the first discovery of oil by the U.S. company back in 2015, Government has been upbeat about the prospects and economic future of Guyana.
The most recent offshore discovery of oil in early January sparked further hope.
The well was drilled by ExxonMobil subsidiary Esso Exploration and Production Guyana Limited, and encountered more than 95 feet of high-quality, oil-bearing sandstone reservoirs. It was safely drilled to 18,080 feet in 6660 feet of water. The Payara field discovery is about 10 miles north west 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 and 150 million oil equivalent barrels. This additional resource is currently being evaluated for development in conjunction with the world-class Liza discovery.
Drilling on Payara began on November 12, 2016, with initial total depth reached on December 2, 2016. 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 analysed in the coming months to better determine the full resource potential.
The Stabroek Block is 6.6 million acres (26,800 square kilometres). Esso Exploration and Production Guyana Limited is operator and holds 45 per cent interest in the Stabroek Block. Hess Guyana Exploration Ltd holds 30 per cent interest and CNOOC Nexen Petroleum Guyana Limited holds 25 per cent interest.
Back in October 2016, the company made its third significant discovery in its drilling explorations offshore Guyana, with its partner, Hess Corporation, noting that the Liza 3 exploratory well’s net value could be US$6.2 billion based on calculations from the Bank of Montreal (BMO) Capital Markets.
In late June 2016, Exxon’s drilling results at Liza 2 revealed more than 58 metres of oil-bearing sandstone reservoirs in Upper Cretaceous formations. The well was drilled to 5475 metres at a depth of 1692 metres. Drilling results confirmed recoverable resources to be between 800 million and 1.4 billion barrels of oil equivalent. Data from the Liza 2 well test is being assessed.
In May 2015, Exxon confirmed its significant oil discovery at its Liza 1 exploration well, where more than 295 feet of high-quality oil-bearing sandstone reservoirs were encountered.
On September 8, ExxonMobil announced that its third exploratory well Skipjack (the third well drilled and not Liza 3 as reported in the local media) was unsuccessful, since it did not yield commercial quantities of hydrocarbons. ExxonMobil spud Liza 3 after Skipjack turned up unfavourable results. Skipjack was a separate prospect 25 miles north west of the Liza wells. The Liza 3 well, like Liza 2, will be focused on testing the flank of the Liza structure to determine the aerial extent of the reservoir.
In July 2016, ExxonMobil submitted a development plan for Liza to Guyana’s Environmental Protection Agency to begin the environmental review process.
That plan calls for a pair of rigs to drill development wells from two drill centres, each with a corresponding water injection site to the East. Business site Bloomberg, in June of 2016, reported that ExxonMobil’s oil discovery off the coast of Guyana may hold as much as 1.4 billion barrels, twice the size of the previous estimate, making it potentially worth about US$70 billion based on current prices.