American oil firm ExxonMobil is expected to sink one more exploratory well before drilling production wells at its Stabroek block offshore Guyana, Minister of Natural Resources Raphael Trotman says.
“As for now, Exxon is scheduled to drill one more exploratory well and to begin the process for the drilling of production wells at the Liza site,” the minister told Stabroek News recently, when asked how much wells the American firm plans for its current drilling programme.
Earlier this month, ExxonMobil announced that drilling results from the Liza-2 well, the second exploration well in the Stabroek block offshore Guyana, confirm a world-class find with a recoverable deposit of between 800 million and 1.4 billion oil-equivalent barrels.
“We are excited by the results of a production test of the Liza-2 well, which confirms the presence of high-quality oil from the same high-porosity sandstone reservoirs that we saw in the Liza-1 well completed in 2015,” Steve Greenlee, the president of ExxonMobil Exploration Company, said.
However, while there has been no target date set for actual production, typically, moving from the exploration to production stage takes about five years.
Stabroek News understands that production for the oil and gas corporation might be around the same timeframe or can extend longer as the Stabroek Block area has quite a difficult topography in deep waters.
Last year, after the results of the Liza-1 well were announced, Trotman had told Stabroek News that government would press the company to bring the well into production within five years. He had said that government is looking to have an outside date of five years and a minimum of three years to bring the well to production.
It has been reported that the Liza discovery may not add to global oil supplies for years as deep water finds can take half a decade or more to bring into production.
Forbes Magazine has reported that a Dutch company, SBM Offshore has been “prequalified” by ExxonMobil to build a floating production, storage and offloading (FPSO) vessel for Liza. According to Forbes, Exxon might need to order three FPSOs to handle the Guyanese oil.
The Liza-2 well was drilled by ExxonMobil’s local subsidiary, Esso Exploration and Production Guyana Ltd, approximately two miles from the Liza-1 well. The company said that the Liza-2 well found more than 190 feet of oil-bearing sandstone reservoirs in Upper Cretaceous formations. The well was drilled to 17,963 feet in 5,551 feet of water.
“This exploration success demonstrates the strength of our long-term investment approach, as well as our technology leadership in ultra, deep-water environments,” said Greenlee.
Exxon Mobil in 2015 had announced a significant oil discovery at its Liza-1 well. The Liza wells are located in the Stabroek block approximately 120 miles offshore Guyana. Data from the successful Liza-2 well test is being evaluated.
The ExxonMobil announcement has heightened local interest in when the Guyana Government and the US firm can arrive at a deal to begin tapping the deposit and on what terms. Outgoing US Deputy Chief of Mission Bryan Hunt in a recent interview with Stabroek News had adverted to the scale of the find and its potential to boost the fortunes of the country.
The Stabroek block is 6.6 million acres (26,800 square kilometers). Esso Exploration and Produc-tion Guyana Limited is operator and holds 45 percent interest in the Stabroek block while Hess Guyana Exploration Ltd holds 30 percent interest and CNOOC Nexen Petro-leum Guyana Limited holds 25 percent of the shares.
“We, along with our co-venturers, look forward to continuing a strong partnership with the government of Guyana to further evaluate the commercial potential for this exciting prospect,” Greenlee said.
Meantime, a statement from Hess said that the company was encouraged by the favourable results of the Liza-2 well. “We are very encouraged by the drilling results to date of the Liza prospect, which we believe has the potential to materially contribute to our resource base and future production growth,” John Hess, CEO of Hess Corporation, said. “In addition to the Liza prospect, we continue to evaluate the resource potential on the broader Stabroek block with additional exploration drilling planned,” he added.
“We look forward to working with our co-venture partners and the Government of Guyana to move this exciting prospect toward a commercialization decision,” Hess said.
