ExxonMobil says Guyana ‘integral’ to its projected revenue growth

Liza Destiny

With Guyana among the countries responsible for oil giant ExxonMobil’s projected revenue growth from upstream oil ventures, the company intends to focus its earnings and its growth plans on its projects in Guyana and elsewhere.

In a release announcing that it had formalised its corporate plans and is expected to double its earnings by 2027, Exxon noted the value of its “low cost” projects in Guyana and other countries. ExxonMobil is currently producing oil in the Liza Field and has plans for three more such fields.

“Projected growth of cash flow and earnings in the upstream business results from aggressive cost reductions and progressing advantaged investments in low-cost-of-supply projects in Guyana, Brazil, and the Permian Basin in the United States.”

“More than 90 per cent of upstream planned capital investments through 2027 are expected to generate returns of greater than 10 per cent at prices less than or equal to $35 per barrel of oil equivalent, while reducing upstream GHG emissions intensity by 40-50 per cent through 2030, compared to 2016 levels,” ExxonMobil also said.

It was noted by the oil company that it plans to increase spending on greenhouse gas emission reduction projects over the next six years, to $15 billion. ExxonMobil also said it plans to maintain capital investments in the range of $20-$25 billion per year until 2027, though this can be subject to change due to adverse market conditions or other factors.

At the same time, ExxonMobil noted that it would focus its earnings on high return projects which are likely to include Guyana.

“Downstream and chemical earnings and cash flow growth plans are focused on high-return projects, which are expected to double the volume of valuable performance chemicals and lower-emission fuels and lubricants.”

“The company will leverage its industry-leading manufacturing scale, integration, and technology position to high-grade its portfolio and reduce costs, while optimising operations and leveraging the capabilities of the Low Carbon Solutions business to reduce greenhouse gas emission intensity at operated facilities,” the company noted.

The statement quoted Chairman and Chief Executive Officer Darren Woods, who spoke of the efforts being made to reduce greenhouse gas emissions. According to him, it is expected that ExxonMobil will meet its 2025 greenhouse gas emission target, ahead of schedule. Woods also referenced Exxon’s balance sheet.

“The restored strength of our balance sheet and improved financial outlook support accelerating investment in our industry-advantaged, high-return projects, and a growing list of financially accretive lower-emission business opportunities,” he said.

“Our strategy is designed to create shareholder value by leveraging our competitive advantages while maintaining flexibility to respond to future policy changes and technology advances associated with the energy transition.”

Besides the Liza 1 field, Exxon already has approval from the Environmental Protection Agency (EPA) for two other projects; the Liza 2 and Payara developments. Yellowtail, its fourth project, has an anticipated start date of late 2025 pending governmental approvals and project sanctioning.

ExxonMobil has said it anticipates at least six projects offshore Guyana will be online by 2027, with developmental drilling recently starting on the second one, the Liza Phase 2 project. Back in May 2019, EEPGL was granted approval by the Environmental Protection Agency (EPA) to go ahead with its Liza Phase 2 Development offshore Guyana.

The oil company had said that the project will have the capacity to produce 220,000 barrels of oil per day. Exxon had also revealed that the Liza Phase 2 development was funded at the cost of some US$6 billion, including a lease capitalisation cost of approximately $1.6 billion, for the Liza Unity FPSO vessel. For the Phase 2 Development, six drill centres were planned, along with approximately 30 wells – 15 productions, nine water injection and six gas injection wells.

The US$9 billion Payara development, the third development, will meanwhile target an estimated resource base of about 600 million oil-equivalent barrels and was at one point considered to be the largest single planned investment in the history of Guyana.

The Yellowtail development, which will be oil giant ExxonMobil’s fourth development in Guyana’s waters, will turn out to be the single largest development so far in terms of barrels per day (bpd) of oil, with a mammoth 250,000 bpd targeted.