August 10,2016 Source

Following its discovery of immense quantities of oil offshore Guyana, ExxonMobil’s local subsidiary, Esso Exploration and Production Guyana Limited (EEPGL) has applied to the Environmental Protection Agency (EPA) for permission to begin development of production facilities here.

In an ad in the Guyana Times yesterday, the EPA informed that EEPGL has submitted an application for environmental authorisation to undertake Phase 1 of development of production facilities for petroleum production estimated to last at least 20 years in the Stabroek licence area, offshore Guyana. This marks the first time that a company has applied to begin development of oil production facilities here. ExxonMobil reps have said the company will not start the actual extraction of oil for another five years but the preliminary project schedules proposes drilling beginning in 2019.

In the ad, the EPA said that the proposed project will be implemented in multiple stages which include well drillings and completions, mobilisation and installation of subsea equipment, umbilicals, risers and flowlines (SURF), installation of a floating production, storage and offloading (FPSO) facility, production operations, and decommissioning. It added that the proposed project will be undertaken in the marine offshore environment within Guyana’s territorial waters and would require land-based activities for support activities at marine shorebases.

The agency said that in keeping with the Environmental Protection Act, an Environmental Impact Assessment (EIA) is required for this offshore large-scale development of petroleum production facilities before any decision to approve or reject the proposed project is taken, since this development may have significant impacts on the environment.

It invited members of the public, within 28 days of the notice, to make written submissions to the agency, setting out those questions and matters which they require to be answered or considered in the EIA.

Two wells drilled so far by an ExxonMobil-led consortium have uncovered significant oil deposits offshore Guyana. In May last year, ExxonMobil reported a “significant oil discovery” at its Liza-1 well offshore Guyana. Last month, ExxonMobil announced that drilling results from the Liza-2 well, the second exploration well in the Stabroek block offshore Guyana, confirm a world-class find with a recoverable deposit of between 800 million and 1.4 billion oil-equivalent barrels.

The Liza-2 well was drilled by EEPGL approximately two miles from the Liza-1 well. Currently, a third well in the Stabroek Block is being drilled. On July 17, the company began drilling the Skipjack prospect, which is located approximately 25 miles northwest of the Liza-1 discovery well. An ExxonMobil executive had said that after drilling the Skipjack prospect, the plan is to move back to Liza for another appraisal well.

According to the project summary, EEPGL is considering a phased development of the Stabroek Block Liza discovery utilising an FPSO facility. “This project would serve as the initiating oil and gas development project in Guyana’s resource sector,” it said. Phase 1 – the initial production operations phase – is expected to produce for at least 20 years. An amendment would be submitted for any additional development phases.

The development plan for Liza will use a FPSO and SURF production system. The design of the FPSO and SURF systems is under development, and would leverage both operator and industry proven technologies and experiences from other regions such as West Africa, the summary says. It noted that EEPGL is currently evaluating design criteria and options for the development.

According to the summary, most of the major SURF equipment will be shipped preassembled and pre-tested directly to the offshore Project site from their points of origin.

Double hull
The FPSO will be a converted double hull Very Large Crude Carrier (VLCC), approximately 340 metres long by 58 metres wide by 33 metres deep and will be spread-moored on location. The FPSO will be moored approximately 190 km offshore, approximately 210 km east of the Shell Beach Protected Area.

“Oil will be stored in the FPSO tanks prior to export to conventional tankers via direct offloading utilizing a floating offloading hose arrangement. All crude oil produced from the FPSO would be exported to market via conventional tankers. EEPGL has no current plans to establish a refinery in Guyana,” the summary says.

It noted that the FPSO will be designed to receive full well stream production and process oil at a design rate of 100,000 Barrels of Oil Per Day (BOPD) annual average, with the ability for sustained peaks of up to 120,000 BOPD, and a minimum oil storage capacity of 1.6 million barrels of oil. It will be designed to remain on station continuously for at least 20 years.

At peak production during Phase 1, the FPSO will offload up to 1 million barrels of oil to a conventional tanker approximately once every 10 days using an industry proven FPSO tandem offloading configuration. The conventional tanker will be held in position with the assistance of tug(s) to maintain a safe separation distance of approximately 120 metres from the FPSO.

According to the preliminary project timeline provided, drilling and installation is expected to start in 2019. The summary noted that the milestones are still being refined and are subject to change.

It says that the process of drilling the wells for the Liza Phase 1 development would be very similar to the process followed during the Liza-1 and Liza-2 campaigns. After drilling to total depth, the wells will be completed and the subsea production tree will be installed. The current plan is to use two drill ships operating simultaneously to drill the wells, but the specific ships have not been selected.

Stabroek News had recently reported that ExxonMobil is seeking to acquire more acreage offshore Guyana and ExxonMobil’s Vice President, Investor Relations and Secretary Jeffrey J. Woodbury has said that the plan for production is “probably early into the next decade at this point.”

According to the executive, ExxonMobil along with its partners is pursuing development planning activities on an early production concept involving a FPSO facility, along with related subsea production systems. A final investment decision will be based on a variety of factors, including further Liza appraisal drilling, regulatory approvals, and market conditions, he had said.

When asked about whether the company could be producing oil here as early as 2018, Woodbury had responded that “what we were laying out in our permitting activity is probably early into the next decade at this point. There’s a lot to consider to make sure that we are maximizing the value for the resource owner and for the co-ventures.”