Guyana is set to grant a production license to ExxonMobil for production of oil to move ahead in 2020.
This follows reviews of the technical and environmental aspects of the giant Liza oil discovery in the Stabroek Block offshore Guyana. Exxon submitted the development plan for the Liza project in December 2016. The Liza project is estimated to hold an excess of 1 billion oil-equivalent barrels.
According to the government, the expected assignment of a production licence to ExxonMobil also places emphasis on Guyanese employment and training, the procurement of goods and services in Guyana, infrastructural soundness and the protection of the environment.
The Production Licence is required to be finalized before the developers make their Final Investment Decision (FID) for the project in June 2017.
Oil production from the Liza field is expected to start in 2020 at an initial rate of 100,000 barrels of crude per day in the first phase; with a Floating Production Storage and Offloading (FPSO) vessel providing the main infrastructural support for the project.
SBM Offshore, the world’s largest FPSO provider, has been selected to carry out front end engineering and design for the FPSO, and, subject to a final investment decision on the project in 2017, will construct, install and operate the vessel.
The Government will receive a royalty of 2 percent on gross earnings and benefit from 50 percent of the profits from the sale of petroleum once production commences.
“The Ministry of Natural Resources and other Ministries and Agencies are actively pursuing a number of undertakings on the policy, legislative and infrastructure sides to ensure that the country is prepared for the coming oil production. As this Ministry, along with others, seeks to develop our oil and gas industry in a sustainable and profitable manner, citizens are encouraged to continue to provide their feedback and recommendations on the new sector when the Ministry’s outreaches visit their communities,” the ministry said in an announcement last week.