ExxonMobil expects steady 1 million b/d Guyana output in transformative rise
ExxonMobil expects Guyana to reach steady oil production of 1 million b/d by 2028 — up from zero in less than a decade — with the gas output mainly reinjected for the time being as the partners look at ways to eventually commercialize the gas portion, the US major’s lead country manager, Alistair Routledge, said.
Interviewed in London in August, Routledge voiced confidence in Guyana’s growth as a deepwater oil producer with low emissions, an emerging domestic supply chain and an effective licensing process.
Routledge noted the light sweet crude from Guyana’s 6.6 million acre Stabroek block has mainly headed east to Europe in the wake of the Russia-Ukraine war and curbs on Russian oil, with little going to US Gulf refiners. Liza crude, which has an API gravity of 32, was assessed by Platts, part of S&P Global Commodity Insights, at $91.19/b Sept 6.
He confirmed plans to bring onstream the Payara field by the end of 2023, ahead of the original schedule, using the 220,000 b/d floating production, storage and offloading vessel Prosperity. With Guyana producing 400,000 b/d from two FPSOs currently, Payara will lift output to 600,000 b/d, on track for six projects to be producing by the end of 2027, he said.
An environmental statement for the sixth project, Whiptail, was published in August, and partner Hess has said a development plan will follow in the fourth quarter.
“We think in the 2028 time frame, the country’s producing over 1 million b/d on a regular basis,” Routledge said.
Analysts at S&P Global Commodity Insights expect crude production from Guyana to reach 1.16 million b/d by 2030 and almost 1.4 million by the late 2030s.
ExxonMobil has so far committed to $40 billion of spending on its Guyana projects, while continuing to explore along with its partners, Hess and China’s CNOOC. At any one time, two or three of the six rigs currently deployed are engaged in exploration and appraisal, Routledge said.
As work continues on building a supply chain, he described the industry’s impact on the country as “transformational” for the country of 800,000 and its $4 billion/year national budget.
Routledge played down concerns about gas flaring raised by an incident in 2022 involving a flash gas compressor on the first Liza FPSO, Destiny, for which a significant fine was paid.
With the Liza field producing around 580 MMcf/d of gas, much of that amount is currently reinjected — over 500 MMcf/d — while some is used for fuel for operations, meaning no immediate need for a gas sales solution. Reinjection of gas, along with water, is intrinsic to maximizing output, in line with the production agreement with Guyana, he said.
“We focus on developing what we say is the black oil neighborhood of the Stabroek block from what we’ve discovered to date,” he said. “These are very flat reservoirs … so in order to optimize the sweep through the reservoir, we’re looking for that immiscible front of water and gas that’s pushing the oil through the reservoir.”
However, he acknowledged the need for gas sales options for later development of the gassier fields to be found farther east near the border with Suriname, where TotalEnergies has met similar challenges. Closer to the border, “we do see this high variability of the fluids both laterally in different reservoirs, but also vertically. We have stacked reservoirs, and you can see different fluid mixes in different reservoirs,” Routledge said.
He said it was “early days” in reaching a gas export solution, but the liquid content in the gassier fields would likely prevent straightforward deployment of a floating LNG facility along the lines of Mozambique, where ExxonMobil has used the technology at Coral, a field producing dry gas. One option is a floating LNG facility in combination with a liquids production facility, he said.
“We will have to have a production facility that just separates liquids and gas and handles probably tens of thousands of barrels a day of liquids production,” he said. “But do you then have a floating LNG facility next to a [liquids] production facility? Do you have that in shallow water? Do you have it onshore? We’re looking at all of those kind of concept options.”
Routledge said ExxonMobil had “no regrets” over the licensing regime and the expected relinquishment of 20% of its prospecting area in 2024, describing such a condition as “not unusual.” While the prospecting license expires in 2027, anything under development or moving toward a development plan will still proceed under the overall production sharing agreement, he said.
On Guyana’s development, Routledge noted work underway on the first small-scale pipeline from the offshore facilities to the coast, a 12-inch pipeline that will bring ashore 50 MMcf/d of gas to be used to generate power. The gas will also yield some 4,000 b/d of natural gas liquids, with an NGL plant to be built by the Demerara River at the Wales Estate.
“As we find more gas that we can release eventually, then we’ve begun to create a market for that,” he said, noting Guyana’s reliance on diesel and fuel oil for power.
He went on to highlight the development of the local workforce and supply chain, saying the authorities face a delicate task balancing policies on employment and immigration, as Guyana starts to attract workers from outside.
With one shore base already established to support the six rigs in operation, a second base is being built, known as Vreed-en-Hoop, to focus on fabrication and assembly of subsea infrastructure — the first phase of that project is to be completed by end-2023.