(Reuters) – As oil industry officials from around the world descend on Guyana for a conference to showcase its potential as an oil power, the biggest player in its oil boom still has decisions to make on its future in the South American country.
Liam Mallon, president of Exxon Mobil’s oil and gas production business and its most senior executive at the four-day event beginning on Tuesday, told Reuters that Guyana was central to its plan to boost its global oil output by about 13% by 2027.
But Exxon is not ready to commit to adding to its already sizeable exploration territory in Guyana until new contract terms are disclosed, he said. The company is working to more than triple Guyana production to 1.2 million barrels per day by 2027 and may go beyond that, Mallon said.
“We don’t know yet what the terms will be to make a final assessment,” Mallon said.
Exxon leads a consortium that controls 6.6 million acres (26,800 square km) hosting more than 30 discoveries.
Guyana is using the conference to highlight an auction next quarter of 14 offshore exploration blocks that could potentially double that offshore area under exploration.
That prospect has helped lure oil industry contingents from India, the United Arab Emirates, Qatar and the United States to hear from top government officials on their goals for the lease sale. Like Exxon, many are hoping to learn precise terms before deciding whether to invest billions of dollars.
“At the end of the day, you are investing in deepwater developments, you are investing a lot of money upfront,” Mallon said of the risks involved.
Contract terms of a new production sharing agreement (PSA) that will regulate future oil exploration licenses are expected to be finalised by March 8.
‘EARLY IN EXPLORATION’
The Exxon consortium’s drilling success shows it has plenty left in its massive Stabroek block, whose discoveries since 2015 hold some 11 billion barrels of recoverable oil. Six drilling rigs are hunting for more crude and natural gas.
“The number continues to grow,” Mallon said of the potential. “We are still relatively early in the exploration phase.”
Guyana’s auction could reduce Exxon’s dominance in the developing nation’s oil industry if other companies decide to bid. Exxon and its partners, Hess Corp and CNOOC, currently control all of its output.
The country’s potential reserves could more than double, to 25 billion barrels of oil and gas, officials have said.
Exxon sees the potential for installing at least 10 floating production storage and offloading (FPSO) vessels in the Stabroek block. The first six vessels combined will have a capacity to produce 1.2 million barrels per day (bpd) of oil and gas.
Unofficially, the company’s development plans indicate output could reach 1.375 million bpd from the same six vessels.
The company recently submitted development plans for its sixth production project, called Whiptail. The FPSO for it could add between 220,000 bpd and 275,000 bpd of capacity.
If confirmed at the top of the range, it would be the largest floating platform in the Americas, breaking Exxon’s proposed Yellowtail project, which includes a 250,000 bpd vessel.
“We have to put our resources where we think the biggest opportunities are,” Mallon said.
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