June 22 (UPI) — With trends on par with the Permian shale basin in the United States, Guyana is big enough to be transformative even for the supermajors, analysis found.
Exxon Mobil Corp. and partner Hess Corp. announced their eighth oil discovery off the coast of Guyana earlier this week. Steve Greenlee, the president of Exxon’s exploration company, said the discovery, dubbed Longtail, was made close to other discoveries near the giant Liza field. By his estimates, those discoveries near Liza hold an estimated 500 million barrels of oil equivalent.
Analysis sent from consultant group Wood Mackenzie to UPI in response to questions found reservoirs offshore Guyana are transformative, even for a company like Exxon Mobil.
“The scale, very competitive breakevens of approximately $35 per barrel, and exploration running room make it one of the supermajor’s five growth pillars, second only to the Permian,” Matt Blomerth, a research director for Latin America, said.
In its latest drilling productivity report, the U.S. Energy Information Administration expects Permian oil production will average 3.27 million barrels per day in June, a 2.4 percent increase from last month if estimates prove accurate. Production there could eclipse 5 million barrels per day within the next five years.
Daniel Yergin, the vice chairman of consultant group IHS Markit, said the additional barrels from the Permian are about the equivalent of adding another Kuwait to the market.
Exxon said additional drilling is under way for the initial phase of development for the larger Liza field. The first phase consists of 17 wells tied to a floating production, storage and offloading vessel designed to produce up to 120,000 barrels of oil per day. A second phase concept envisions a second FPSO with the capacity to produce 220,000 bpd and a third phase will follow.
First production from Liza is expected by early 2020.
“Momentum continues to build in Guyana, with the partners now planning to add a second drillship to speed up the pace of exploration drilling,” Blomerth said.
Hess Corp. shed assets last year across a wide portfolio range to help fund operations at the Liza field. The company estimated it would cost at least $3.2 billion to fully develop the broader offshore Liza field, which the company’s CEO said could yield “a decade plus of returns-driven growth.”
Hess estimated gross production from Liza could pass 500,000 bpd by late 2023.