…reports $17.9B earnings in second-quarter 2022
United States oil major ExxonMobil has increased its production capacity offshore Guyana to more than 340,000 oil-equivalent barrels per day, and this has been credited to the ramping up of operations at the Liza Phase 2 Project, which was started earlier this year, and the Liza Phase 1 Project, now producing above design capacity in the Stabroek Block.
This was revealed by Chairman and Chief Executive Officer of ExxonMobil, Darren Woods, during the company’s second-quarter earnings call on Friday. It was noted that Liza Phase 1 is demonstrating excellent performance, producing more than 10 per cent above design capacity.
“In Guyana, our total capacity is now more than 340,000 oil equivalent barrels per day. Our Liza Phase 1 development is producing above design capacity with excellent performance. Liza Phase 2 started production earlier this year, and has recently reached the design capacity of 220,000 barrels per day,” Woods stated.
With this, the US oil major is now producing more than the 340,000 bpd target it had originally set for its Guyana operations by the end of 2022. Liza Phase Two started production back in February with the Liza Unity floating, production, storage and offloading (FPSO) vessel.
On the other hand, Liza Phase 1 has a design capacity of 120,000 bpd with the Liza Destiny FPSO vessel. However, during the second-quarter, it reached a new production capacity of more than 140,000 barrels of oil per day following production optimisation work on the FPSO.
Previously, the oil major had encountered repeated technical issues with the flash gas compressor on the Liza Destiny FPSO, which had caused increased flaring and resulted in Exxon having to pay more than US$10 million in fines to the Environmental Protection Agency (EPA).
However, the oil company has since installed a new flash gas compressor on the vessel, and flaring has been reduced to pilot levels.
“I’m really happy to say that we met our expectation of delivering, installing, and starting it up in July. And we’ve achieved background flare now on Liza Destiny. It’s a remarkable accomplishment by quite a lot of people over a journey that has been challenging but relentlessly pursuing the background flare target, and really happy to say we’ve achieved that.
“The operation on Liza Destiny has been going smoothly, very safe operation. We’ve gone over a thousand days now without a recordable incident, which is really world class performance. And we should be really proud of all the Guyanese working on Liza Destiny,” said Mike Ryan, the Production Manager of Esso Exploration and Production Guyana Limited (EEPGL) – ExxonMobil’s local affiliate in Guyana.
Nevertheless, asked about Liza Phase 1 producing above capacity during Friday’s earnings call, the ExxonMobil Chairman posited that this is reflective of the oil major focusing on “de-bottlenecking and optimising” new projects to take them above production capacity.
“I think the way we organised our technology and engineering now, where we can leverage the learnings and capabilities and competencies of every part of the organisation on any one particular asset, is a huge, huge competitive leverage,” he stressed.
Woods went on to laud the progress and the rapid development of operations offshore Guyana.
“I think it illustrates one of the advantages of a consistency of approach and just moving from one development to the other. We started off with Liza 1 with a smaller concept to get started, and recognised that we would build on that and extend on the design that we had. So, we had a concept of ‘design one, build many’.
“Obviously as our discoveries mature and we get a better understanding of the reservoir and the development opportunities there, we would adjust those designs. So, I think it’s a function of really the development plan that we put in place and the right project to most efficiently develop those resources, and that will change as we move around that block with the different structures and resources,” he asserted.
Meanwhile, the ExxonMobil Chairman also announced on Friday an estimated second-quarter 2022 earnings of some US$17.6 billion and cash flow from operating activities of US$20 billion.
Woods explained that the majority of the growth came from the oil major’s advantaged investments in Guyana and the Permian, which produced higher volumes during the quarter.
He further mentioned Exxon’s two latest discoveries in Guyana during the second quarter, which add to the estimated recoverable resource base, which is nearly 11 billion barrels.
The discoveries at Seabob and Kiru-Kiru are the sixth and seventh in Guyana this year, with the total number of discoveries offshore Guyana at more than 30 since 2015.
Earlier this week, ExxonMobil and its partners said they continue to accelerate exploration, development and production activities for the benefit of all stakeholders, including the people of Guyana.
According to Exxon, their 2022 investment plans include further exploration drilling and resource development in Guyana, where it is already increasing production at an accelerated industry-leading pace.
The oil rich Stabroek Block is 6.6 million acres (26,800 square kilometres). Exxon, through subsidiary EEPGL, is the operator, and holds 45 per cent interest in the Block. Hess Guyana Exploration Ltd holds 30 per cent interest, and CNOOC Petroleum Guyana Limited, a wholly-owned subsidiary of CNOOC Limited, holds the remaining 25 per cent interest.
So far, Exxon’s investments in Guyana total Gy$1.3 trillion on its own and over Gy$3 trillion with its partners. ExxonMobil has said it anticipates at least six projects offshore Guyana will be online by 2027.
In addition to the two Liza operations, the oil major’s third project – the Payara Development – will utilise the Prosperity FPSO with an expected capacity of 220,000 bpd, with first production expected in late 2023. The fourth development, Yellowtail, was sanctioned in April and will utilise the ‘One Guyana’ FPSO with an expected capacity of approximately 250,000 bpd, with first production slated for 2025.
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