Last Updated on Wednesday, 28 July 2021, 21:18 by Denis Chabrol
The ExxonMobil-led consortium is expected to increase its production from the Liza-1 well after a new flash-gas compressor system is installed during the last quarter of this year, even as the co-venturers prepare to drill more exploration wells in the coming months, Hess Corporation announced on Wednesday.
Hess, which has a 30 percent stake in the Esso Exploration and Production Guyana Limited (EEPGL), said the new system would be installed between October and December, 2021.
“Replacement of the flash gas compression system with a modified design and production optimization work are planned for the fourth quarter which will result in higher production capacity and reliability,” Hess Corp’s Chief Operating Officer Greg Hill told the quarterly earnings call.
Officials have told News-Talk Radio Guyana 103.1 FM/ Demerara Waves Online News previously that the Liza 1 FPSO is designed to produce a maximum of 158,000 barrels of liquids – oil and water
He said ExxonMobil was evaluating test data from the repaired flash gas compressor on the Liza Destiny Floating Product to optimize performance and is safely managing production in the range of 120 thousand to 125 thousand barrels of oil per day, now that the repaired flash gas compressor has been installed and is being tested.
The troublesome flash gas compressor for several months now had resulted in reduced production and higher gas emissions.
Hours after ExxonMobil announced a twin discovery of commercially viable oil deposits at Whiptail-1 and Whiptail-2, Hess said the drillship, Noble Don Taylor, will drill the Pinktail-1 exploration well, located 5 miles southeast of Yellowtail-1, followed by the Tripletail2 appraisal well, located 5 miles south of Tripletail-1.
The Noble Tom Madden will spud the Cataback-1 exploration well, located 4.5 miles southeast of the Turbot-1 discovery, in early August. In the fourth quarter, Hess says they will drill our first dedicated test of the deep potential at the Fangtooth prospect, located 9 miles northwest of Liza-1.
In the third quarter, the Noble Sam Croft will drill the Turbot-2 appraisal well, then transition to development drilling operations for the remainder of the year. The Stena Carron will conduct a series of appraisal drill stem tests at Uaru-1, then Mako-2 and then Longtail-2, Hess added.
The company said it had calculated its profits based on a world oil price of below US$49 per barrel in another five years. “Guyana is positioned to become a significant cash engine in the coming years as multiple phases of low cost oil developments come online, which we expect will drive our portfolio breakeven Brent oil price below $40 per barrel by the middle of the decade,” Hess’ Chief Executive Officer John Hess said.
In terms of Guyana developments, Hess said the Liza Unity FPSO, with a gross capacity of 220 thousand barrels of
oil per day, is expected to sail from Singapore to Guyana in late August and the Liza-2 development is on track to achieve first oil in early 2022. Our third oil development on the Stabroek Block at the Payara Field is expected to achieve first oil in 2024, also with a gross capacity of 220 thousand barrels of oil per day. Engineering work for a fourth development on the Stabroek Block at Yellowtail is underway with preliminary plans for gross capacity in the range of 220 thousand to 250 thousand barrels of oil per day and anticipated startup in 2025, pending government approvals and project sanctioning.
“Our three sanctioned oil developments have a Brent breakeven oil price of between $25 and $35 per
barrel, and – according to recent data from Wood Mackenzie – our Guyana developments are the highest
margin, lowest carbon intensity oil and gas assets globally,” the company said.