Page 5 - LatAmOil Week 01 2020

LatAmOil COMMENTARY LatAmOil
 Expandingscale
The partners are already on track to expand the scale of the project. They have contracted SBM Offshore to build another FPSO for the second phase of work at Liza; this vessel, the Liza Unity, will be moored at the field in time to begin pro- duction in mid-2022. It will eventually be able to extract oil at the rate of 220,000 bpd.
Additionally, the consortium has asked the Guyanese government for permission to develop Payara, another section of Stabroek. It hopes to begin work at the field in 2023, using another FPSO to push production up by an additional 220,000 bpd.
Meanwhile, it is continuing to make new discoveries. On December 23, ExxonMobil released a statement saying that the group had found oil in Mako, yet another section of the Stabroek. This is the 15th discovery made at the offshore block, which is already believed to contain more than 6bn barrels of oil in recover- able reserves, the statement said. (The 14th find, which was made at the Tripletail field, came in September 2019.)
By 2025, ExxonMobil added, Stabroek may be yielding more than 750,000 bpd of crude oil. “The timely development of these additional projects will ensure that the local workforce and the utilisation of local suppliers will continue to grow,” it commented.
Trading debut
Guyana is not just working to ramp up its nas- cent upstream sector; it is also trying to establish a place for itself within world oil markets.
Once again, it hopes to achieve results quickly on this front – and it is optimistic, despite the fact that the country has no history of oil production, no domestic refining indus- try and no strong ties to the global commodities trade. Its optimism is rooted in the government’s efforts to find trading partners.
The first such effort came to fruition on December 24, just a few days after first oil at Liza. On that day, Guyana’s government named Royal Dutch Shell as agent for the sale of its own share of production from the field. It has tasked Shell with supplying three cargoes of crude from Liza to the world market. The Anglo-Dutch
super-major is due to load the first cargo in February.
The government reported in a statement that it had selected Shell via a competitive bidding process. It also said the company’s offer had won out because of its “competitive pricing.”
In the long term, Guyana will search for another marketing partner, a company that is capable of executing a large-scale oil sales agree- ment. In the meantime, though, it hopes to make good use of the information that Shell will glean from the offering of the first cargo. Crude from the Liza field is known to be light and sweet, but its refining qualities – and, therefore, its pricing structure – have yet to be determined.
More disappointment for Tullow
Not all of the news coming out of Guyana is upbeat.
Tullow Oil (UK/Ireland) reported in early January that it had found less oil than expected in Carapa-1, a well drilled at the Kanuku block. Carapa-1 encountered just 4 metres of net pay, a result that the company’s chief operating officer, Mark MacFarlane, described as disappointing.
But MacFarlane also talked up the quality of the oil in Carapa-1, which measured about 27 degrees API, with less than 1% sulphur. “While net pay and reservoir development at this loca- tion are below our pre-drill estimates, we are encouraged to find good-quality oil,” he said.
Tullow had said previously that it hoped to find light sweet crude at Kanuku. Last year, though, it made only three technical finds of lower-quality crude. These small-scale discov- eries raised doubts about the commercial via- bility of the project, but Tullow is trying to stay positive, taking such steps as pointing out that the results from the Carapa-1 well “[suggest] the extension of the Cretaceous oil play from the Stabroek licence southwards into the Kanuku licence.”
Nevertheless, MacFarlane said, the company now has some decisions to make. “We will now integrate the results of the three exploration wells drilled in these adjacent licences into our Guyana and Suriname geological and geophysi- cal models before deciding the future work pro- gramme,” he commented.commented. ™
“ make good use of
Guyana hopes to
the information that Shell gleans from the offering of its first cargo
The consortium has made 15 discoveries at the Stabroek block (Image: Hess)
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