E&P activity on the rise offshore Guyana

Jessica Tippee, Assistant Editor, 07/12/2017, http://www.offshore-mag.com/ar...offshore-guyana.html

In mid-June, Liza became the first deepwater field development sanctioned in Latin America and fifth globally this year. Exxon Mobil Corp. and Hess Corp. both made a final investment decision (FID) to proceed with the first phase of development for the Liza field offshore Guyana. The Liza Phase 1 development includes a subsea production system and an FPSO vessel with the capacity to process up to 120,000 b/d of oil from four subsea drill centers consisting of 17 wells, including eight producers, six water injectors, and three gas injectors.

Production is expected to begin by 2020 and develop about 450 MMbbl of oil. Discovered in May 2015, the fasttracked development plan was submitted in December 2016, and received regulatory approval from the government of Guyana in June 2017.

Phase 1 is expected to cost more than $4.4 billion, which includes a lease capitalization cost of about $1.2 billion for the FPSO facility and $3.2 billion for drilling and subsea infrastructure. Hess reported that its net share of development costs is forecast to be about $955 million.

Located in the 6.6-million acre (26,800-sq km) Stabroek block, the Liza field is about 190 km (118 mi) offshore in water depths of 1,500 to 1,900 m (4,921 to 6,234 ft).

ExxonMobil affiliate Esso Exploration and Production Guyana Ltd. (EEPGL) is the operator and holds 45% interest in the block, along with Hess Guyana Exploration Ltd. (30%) and CNOOC Nexen Petroleum Guyana Ltd. (25%).

ExxonMobil operates three blocks offshore Guyana - Stabroek, Canje, and Kaieteur. (Courtesy ExxonMobil)

EEPGL awarded SBM Offshore the front-end engineering and design contract for the Liza field FPSO. Following the FID, SBM received the contract to construct, install, lease, and operate the vessel. The FPSO is designed to produce up to 120,000 b/d of oil, with associated gas treatment capacity of 170 MMcf/d and water injection capacity of 200,000 b/d. The vessel - a converted VLCC - will be spread moored in 1,525 m (5,003 ft) of water and will be able to store 1.6 MMbbl of crude oil. TechnipFMC was contracted to engineer, manufacture, and supply the subsea production system including 17 total enhanced vertical deepwater trees and associated tooling, and five subsea manifolds and associated controls and tie-in equipment. Saipem received the engineering, procurement, construction, and installation contract for the risers, flowlines, and associated structures and jumpers. The award also includes transportation and installation of umbilicals, manifolds, and associated foundations for the production, and water and gas injection systems. The company will deploy its flagship vessels FDS2 and the Normand Maximus to execute the works which are expected to begin in 2019.

Since the beginning of the year, the partners have made further deepwater oil discoveries in the Stabroek block with the drillship Stena Carron. In January, the Payara-1 well encountered more than 29 m (95 ft) of good-quality, oil-bearing sandstone in two Upper Cretaceous reservoirs of Maastrichtian-Aptian age in 2,030 m (6,660 ft) of water. The Payara discovery is roughly 16 km (10 mi) northwest of the Liza discovery. Two months later the Snoek well encountered 25 m (82 ft) of high-quality, oil-bearing sandstones of Maastrichtian-Aptian age in 1,563 m (5,128 ft) of water. The Snoek discovery is about 9 km (5 mi) southeast of the Liza-1 discovery. In June, Exxon reported that the Liza-4 well encountered more than 60 m (197 ft) of high-quality, oil-bearing sandstone reservoirs, which will underpin a potential Liza Phase 2 development. Gross recoverable resources for the Stabroek block are now estimated at 2-2.5 Bboe.

The Payara-2 well should have spudded last month and will test a deeper prospect underlying the Payara oil discovery. The partners have identified prospects across multiple play types on the block so exploration drilling will continue into 2018.

According to analyst firm Wood Mackenzie, Liza-Payara has a breakeven price of $46/bbl and the short time it took ExxonMobil to declare FID highlights the field’s potential. However, the analyst cautioned that with the discovery of almost 3 tcf of associated gas and the country’s lack of a gas market and offshore infrastructure, the full development will need to address gas monetization. The analyst anticipates two large FPSOs to develop Liza and Payara and a further vessel for Snoek.

Pablo Medina, senior analyst, Upstream, Latin America at Wood Mackenzie, said: “Guyana will have the task of managing the complexities of developing its first oil and gas field. Within 10 years, we expect the Liza-Payara development to produce 330,000 b/d - allowing Guyana to join the ranks of other Latin American producers, where legacy production has been in steady decline.”

Three FPSOs in prospect for deepwater Guyanese discoveries, analyst claims

Offshore staff, 04/03/2017, http://www.offshore-mag.com/ar...-analyst-claims.html

EDINBURGH, UK – Wood Mackenzie has detailed its thoughts on Snoek, ExxonMobil’s third oil discovery on Guyana’s deepwater Stabroek block.

The Snoek-1 well was drilled to a depth of 5,175 m (16,978 ft) in 1,563 m (5,128 ft) of water. It encountered 25 m (82 ft) of oil-bearing sandstones of Maastrichtian-Aptian age, similar to the Liza-1 discovery well 9 km (5.6 mi) to the north.

Next the rig will drill the Liza-4 appraisal well. ExxonMobil’s partners are Hess and CNOOC subsidiary Nexen.

The discovery follows ExxonMobil’s recent Payara find and Liza-3’s uncovering of a new reservoir on the same block.

Wood Mackenzie says its base case for Liza-Payara is 1.5 Bbbl of oil, while Snoek may add a further 220-370 MMbbl. The partners have also identified five more prospects on the block that they plan to drill through 2018. 

In addition, ExxonMobil farmed into and took operatorship of two blocks north of Stabroek, while Hess farmed into block 42 off Suriname.

Apache is currently drilling the Kolibri-1 well on Suriname’s block 53, while Tullow will drill on block 54 later this year.

According to the analyst, a key unknown is whether the Cretaceous fan play extends across the Guyana basin or is isolated to this discovery cluster.

The three Stabroek discoveries are within 30 km (18.6 mi) of each other, so economies of scale could be achieved if associated FPSOs and subsea infrastructure were shared.

However, with each new find disposal of associated gas (the analyst estimates more than 3 tcf so far) becomes a bigger challenge. Initially, the joint venture plans to target low-GOR (gas-oil ratio) areas and will re-inject produced gas, but FLNG or a long pipeline may be needed as well.

The partners are taking a phased approach to the area’s development. Wood Mackenzie anticipates two large FPSOs to develop Liza and Payara and a further vessel for Snoek.

It has drawn up two scenarios for Snoek: a high case with reserves of 370 MMbbl produced through a 120,000-b/d FPSO, and a base case of 220 MMbbl with an 80,000 b/d-FPSO.

The resultant developments could lead to Guyanese production peaking at 400-450,000 b/d during the next decade.

Guyana’s fiscal terms were set at a level to attract high-risk frontier wells, the analyst points out. But success could bring a tightening of these terms as the country’s expectations shift.

04/03/2017

Exxon, Hess to fund deepwater Liza Phase 1 development off Guyana

Offshore staff, 06/16/2017, http://www.offshore-mag.com/ar...offshore-guyana.html

IRVING, Texas and NEW YORK – Exxon Mobil Corp. and Hess Corp. have both made a final investment decision to proceed with the first phase of development for the Liza field offshore Guyana.

The Liza Phase 1 development includes a subsea production system and an FPSO vessel designed to have the capacity to process up to 120,000 b/d of oil from four subsea drill centers consisting of 17 wells, including eight producers, six water injectors, and three gas injectors.

Production is expected to begin by 2020, less than five years after discovery, and develop about 450 MMbbl of oil. The development received regulatory approval from the government of Guyana.

Phase 1 is expected to cost more than $4.4 billion, which includes a lease capitalization cost of about $1.2 billion for the FPSO facility and $3.2 billion for drilling and subsea infrastructure. Hess reported that its net share of development costs is forecast to be about $955 million, of which $110 million is already included in its 2017 capital and exploratory budget. About $250 million is expected in 2018 and approximately $330 million in 2019, with the balance expected between 2020 and 2021.

Located in the 6.6-million acre (26,800-sq km) Stabroek block, the Liza field is about 190 km (118 mi) offshore in water depths of 1,500 to 1,900 m (4,921 to 6,234 ft).

ExxonMobil affiliate Esso Exploration and Production Guyana Ltd. is operator and holds a 45% interest in the block, along with Hess Guyana Exploration Ltd. (30%) and CNOOC Nexen Petroleum Guyana Ltd. (25%).

Exxon also reported positive results from the Liza-4 well, which encountered more than 60 m (197 ft) of high-quality, oil-bearing sandstone reservoirs, which will underpin a potential Liza Phase 2 development. Gross recoverable resources for the Stabroek block are now estimated at 2 -2.5 Bboe, which includes Liza and other successful exploration wells on Liza Deep, Payara, and Snoek.

Drilling of the Payara-2 well on the Stabroek block is expected to begin later this month and will also test a deeper prospect underlying the Payara oil discovery.

06/16/2017

Guyana should have discovered that oil in the 1960s. Now the world is moving on to renewable energy and clean energy . I hope there is lots of natural gas there.