Exxon Hits 500 Million-Barrel Oil Milestone In Guyana

(MENAFN- Baystreet) U.S. oil and gas giant, Exxon Mobil Corp. (NYSE:XOM) announced on Wednesday it has reached 500M barrels of oil produced from Guyana's offshore Stabroek block, just five years after it kicked off production at the location. The Exxon-led consortium which includes Hess Corp. (NYSE:HES) and China's Cnooc (OTCPK:CEOHF) have set a target to reach production of at least 1.3M bbl/day of oil by year-end 2027, a feat it hopes to achieve when six approved offshore projects come online. According to Exxon, the first three projects--Liza Phase 1, Liza Phase 2 and Payara--are already pumping more than 650K bbl/day.
Data by the Guyana government has revealed that the consortium's agreement generated $6.33B for the partners last year, with Exxon netting $2.9B, Hess earning $1.88B, while Cnooc amassed $1.52B from Stabroek. Exxon Mobil owns 45% of the Stabroek block; Hess 30% while Cnooc owns a 25% stake.
Exxon will soon start generating natural gas at its Guyana assets. Netherlands-based SBM Offshore (OTCPK:SBFFF) (OTCPK:SBFFY) has just completed the $1.23B sale of its fifth floating production, storage, and offloading (FPSO) unit to Exxon for use in offshore Guyana. With a production capacity of 250,000 barrels of oil per day, the FPSO Jaguar has a daily associated gas treatment capacity of 540 million cubic feet and a water injection capacity of 300,000 barrels per day. ExxonMobil is progressing with plans to build a Gas to Energy Project in cooperation with the Government of Guyana, with start-up expected by the end of 2024.
According to Exxon, the project will significantly reduce the cost of electricity in Guyana. The proposed project would bring associated gas from ExxonMobil Guyana-operated projects offshore (Liza Phase 1 and 2) via pipeline to onshore gas processing facilities. The pipeline would transport up to ~50 million standard cubic feet per day of natural gas to the facilities.
The three oil majors have completely transformed the economy of the tiny South American country. Whereas, historically, Guyana's GDP per capita was among the lowest in South America, extraordinary economic growth since 2020, averaging 42.3 percent over the last three years, brought GDP per capita to $20,360 in 2023, up from $6,477 in 2019. Guyana is now considered an upper-middle-income country.
Deepwater Investments Outpacing Shale
There are growing signs that the U.S. shale boom could be close to a peak. Whereas overall output is close to record levels, the amount of oil recovered per foot drilled in the Permian Basin of Texas fell 15% from 2020 to 2023, a pace of decline on par with a decade ago. Thankfully, this is happening just as the global offshore oil boom is taking off.
Recent big deepwater discoveries off the coast of Guyana, the Gulf of Mexico and Namibia are bringing back interest to the offshore sector. To sweeten the deal further, deepwater projects come with qualities that modern energy companies desire: lower costs, greater resource potential, longer production periods and lower levels of carbon dioxide emissions.
According to Norwegian global energy consultant, Rystad Energy, the market of the equipment for underwater oil production will grow at a 10% annual clip between 2024 and 2027. Over this period, investment into flexible tubing, subsea coil tubing and valve assemblies will grow from $32 billion up to $42 billion, compared to $23 billion in 2021.
Slightly over one third of these amounts will be invested into super-deep-water projects implemented with floating production, storage and offloading systems (FPSO). Such systems are used at Exxon Mobil's Stabroek license block, where step-by-step commissioning of Liza Destiny, Liza Unity and Prosperity FPSOs allowed for growing oil production outputs from zero up to 650 k barrels per day (kbpd). Output from the block is expected to exceed a million barrels per day in the latter half of the current decade, mainly by launching new FPSOs at Yellowtail, Tilapia and Redtail oil fields. Meanwhile, massive investment will also cover the existing super-deep-water projects, such as Argos in the US, Trion in Mexico and Egina in Nigeria.
Deepwater production remains the fastest-growing upstream oil and gas segment with production expected to hit 10.4 million boe/d in 2022 from just 300,000 barrels of oil equivalent per day (boe/d) in 1990. Wood Mackenzie has predicted that by the end of the decade, that figure will pass 17 million boe/d. Deepwater oil and gas production is set to increase by 60% by 2030, to contribute 8% of overall upstream production, according to a new report from Wood Mackenzie, as cited by Rig Zone. Meanwhile, ultra-deepwater production is set to continue growing at breakneck speed to account for half of all deepwater production by 2030.
Deepwater is defined as water depth greater than 1,000 feet while ultra-deepwater is defined as depths greater than 5,000 feet.
By Alex Kimani for Oilprice

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