Page 11 - LatAmOil Week 13 2021

LatAmOil GUYANA LatAmOil

She further stated that the ExxonMobil subsid- did so again in January 2021, forcing ExxonMo-
iary would continue to inform the Guyanese bil Guyana to reduce output and increase the
authorities about the progress of its effort to put flaring of associated gas.
the compressor back in place on the FPSO. “We Liza-1 is one of 18 oilfields that ExxonMobil
have kept relevant government agencies and and its partners China National Offshore Oil
other stakeholders informed about the progress Corp. (CNOOC) and Hess (US) have discov-
of the repairs and reinstallation,” she said. ered at the offshore Stabroek block. The licence
ExxonMobil Guyana began the repair job area is believed to hold more than 9bn barrels
after the discovery of a compressor leak on the of oil equivalent (boe) in recoverable reserves.
Liza Destiny earlier this year. Company repre- Liza-1 came on stream in December 2019,
sentatives have said they expect the FPSO to and Liza-2, which will be developed by another
resume normal commercial operations some- FPSO called the Liza Unity, is scheduled to fol-
time in April. low suit in 2022. ExxonMobil aims to begun pro-
Gas leaks have been a recurring problem at duction at Payara, a third section of Stabroek, in
Liza-1. They disrupted production last year and 2024. ™

Break-even costs stand at $35 per barrel at the Liza-1 oilfield (Image: JHI Associates)

Low production costs seen

as key to Guyana’s success

STARR Spencer, a senior editor at S&P Global relatively advantageous in the Guyana-Suri-
Platts, has identified low production costs as name basin.
one of the key factors making Guyana an attrac- “[The] reason is that ... even though [the res-
tive investment destination for international oil ervoirs are] deepwater developments, the wells
companies (IOCs). are relatively shallow,” he explained. Addition-
Speaking during a Platts Commodities ally, he noted, IOCs working in the area “don’t
Focus podcast published earlier this week, have to drill through a thick canopy of salt like
Spencer noted that Liza-1, Guyana’s first pro- they do in the Gulf of Mexico.”
ducing oilfield, was set to break even as long as In general, Spencer added, conditions are
world crude prices remained at $35 per barrel or more favourable for companies working in Guy-
higher. Break-even costs for Liza-2, which is due ana’s offshore zone than for companies working
to begin production next year, will be even lower in the onshore Permian basin in Texas and New
at $25 per barrel, he said. Mexico. He acknowledged that some of the most
These figures explain why the Guyana-Suri- efficient Permian operators had succeeded in
name basin has remained competitive over the bringing production costs down to $25-35 per
last year, even at times when the coronavirus barrel but indicated that these cases were excep-
(COVID-19) pandemic was bringing global oil tions to the rule. “I just heard the other day that
demand and prices down, he remarked. there are some companies that still need $50 and
He also pointed out that production costs even $60 [per barrel] to break even,” he com-
had been low because geological conditions are mented. ™

Week 13 01•April•2021 www. NEWSBASE .com P11