Guyana grants oil production license to ExxonMobil for the Liza offshore project in Stabroek Block. The field is estimated to hold an excess of 1 billion oil-equivalent barrels and receiving of approval from the local authorities will allow the energy giant to proceed with exploration and analyze of the project. The production licence is required to be finalized before the developers make their final investment decision for the project in June 2017. SBM Offshore was selected to carry out front end engineering and design for the FPSO, in case of approval. The first flow from Liza field is expected to start in 2020.

“The Ministry of Natural Resources and other Ministries and Agencies are actively pursuing a number of undertakings on the policy, legislative and infrastructure sides to ensure that the country is prepared for the coming oil production. As this Ministry, along with others, seeks to develop our oil and gas industry in a sustainable and profitable manner, citizens are encouraged to continue to provide their feedback and recommendations on the new sector when the Ministry’s outreaches visit their communities”, said the official statement of the Government of Guyana.

The oil production from the Liza field is expected to start in 2020 at an initial rate of 100,000 barrels per day in the first phase. The Government of Guyana will receive a royalty of 2% on gross earnings and benefit from 50% of the profits from the sale of petroleum once production commences.

The Liza prospect is located approximately 120 nautical miles offshore Guyana in the 27,000-sq-km Stabroek block, which is operated by ExxonMobil affiliate, Esso Exploration and Production Guyana, holding 45% from the block.

http://www.maritimeherald.com/...liza-offshore-field/

Sunil posted:

Guyana’s government recently agreed to double ExxonMobil Corporation’s (XOM - Free Report) royalty payments on oil retrieved from its offshore waters. The government said that the energy giant will receive its production license this month.

Over the past few years ExxonMobil has made several discoveries in Guyana’s Stabroek Block, giving the country a window to the oil world.

About the Deal

The government assured that ExxonMobil will receive a royalty of 2% of gross earnings and 50% of the profits after production begins. The company's expected total investment in the project is $5 billion. Once production starts, 75% of the total revenue will be used to repay ExxonMobil for its investment in exploration in offshore waters of Guyana and preparation for production. The remaining 25% will be split equally between the country and the company.

https://www.zacks.com/stock/ne...rom-guyana-to-double

Something seems to be amiss or not clearly presented in this article.

From the previous reports, it was clearly stated that ExxonMobil will recover its costs and annual profits before Guyana receives benefits.

gov’t says new pact with Exxon is 200% higher than initial agreement

THE Government of Guyana on Tuesday said Guyanese will enjoy significant benefits from its oil resources as the administration has negotiated a 200 percent increase on the initial agreement with US oil giant ExxonMobil.

The oil company had entered into an agreement with the former People’s Progressive Party (PPP) administration in 1999. That agreement has since been renegotiated to ensure that Guyana and Guyanese accrue sufficient benefits from the emerging oil and gas sector, the government said in a statement issued by the Department of Public Information.
Government assured that it will continue to ensure that Guyanese and the country benefit from the emerging oil and gas sector.

The assurance by the government follows statements made by the political opposition, PPP which suggests that Guyanese will not benefit enough from the sector. “The royalties and profit sharing revenue are comparable with the world standard and will redound to the benefit of all Guyanese. In fact, the Coalition Government confirms that the 2% royalties represent a 200% increase on what the former PPP government had negotiated while it was in office before demitting in 2015,” the statement said.

The Government noted too that currently the 2 per cent will give Guyana $7B in annual revenues in addition to the 50 per cent share of profits. “Under the Bharrat Jagdeo regime Guyana would have only received profits.” As such, the additional revenues negotiated by the government represent what has been described as a “massive increase” on what was previously negotiated by the former administration.

Meanwhile, Opposition Leader and former President Bharrat Jagdeo has accused the administration of neglecting the country’s traditional sectors, rice and sugar in particular to focus on the oil and gas sector. At a recent press conference Jagdeo said that Guyanese are being hyped about the benefits to be accrued from the oil and gas sector but that’s not sufficient to assist Guyana. He said that even with a 2 percent in royalties being paid to Guyana, the country would only benefit from $8B annually, once oil prices remain at US$50 per barrel and approximately 100,000 barrels of oil are produced daily.

“A payment of US$50 a barrel can’t solve our jobs problem,” the Opposition Leader told reporters last Friday during a press conference, while suggesting that come 2020 there is a high possibility that Guyanese would be “worse off”.

Jagdeo believes that in order to ensure Guyanese are not being duped; the coalition government needs to make public the new agreement between the government and the US oil giant.

However, the Government stressed that Guyanese and Guyana will benefit from the new agreement and called on all citizens particularly “the political opposition and their surrogates and sympathisers, to act responsibly and not misinform the public and stoke a gloom and doom specter over our oil and gas potentials.” “The Opposition must stop using this new sector of hope and future prosperity as a political football,” the government said expressing confidence that the agreements which exist will ensure a better life for all once the sector becomes fully operational in a few years.

The Government said too that the “pessimistic forecast” by Jagdeo is tantamount to him “throwing water on prospects to realise the good life that had eluded Guyanese under his rule.”

“Mr. Jagdeo has no moral authority to speak on the performance of the economy, having himself been at the helm of setting up Guyana’s economy for over a decade as one which was heavily reliant on narco-funds, money-laundering and the underground economy.”

The statement continued: “It is now abundantly clear to all that the economy inherited by the Coalition Government from the PPP administration was nothing more than a shell economy, seriously debilitated by huge debt such as the $85B GuySuCo debt which this government has been saddled with as a result of the wild and inadvisable dumping of resources into the Skeldon Sugar Factory which remains a monumental white elephant.”

As such, the government has questioned the Opposition Leader’s “motive when placed against the background of, by his own admission, having actively considered surrendering Guyana’s sovereign territory to Venezuela.”

Nevertheless, the APNU+AFC coalition government made it clear that it is working on completing lots of ground work to ensure that Guyanese benefit. Additionally, the government said that it is involved in many engagements with international experts to understand best practices along with stringent legal and other frameworks so that risks are minimised in the areas of environmental preservation as Guyana will not compromise on its green state agenda.

The Government of Guyana is expected to grant a production licence to Esso Exploration and Production (Guyana) Ltd and partners Hess and Nexen. This announcement was made recently by the Ministry of Natural Resources. In a statement to the media, the Ministry said that following reviews of the technical and environmental aspects of the Liza Project-Development Plan that was submitted by Esso Exploration and Production (Guyana) Ltd (EEPGL) in December 2017, the government is expected to grant a production licence to ExxonMobil for production of petroleum to move ahead in 2020.

The licence is expected to place emphasis on local employment and training, the procurement of goods and services here, infrastructural soundness and protection of the environment. It is expected that the production licence is finalised before the developers make their Final Investment Decision (FID) for the project in June 2017.

“Extraction from the Liza field is expected to commence in 2020 at an initial rate of 100,000 barrels of crude per day in the first phase, with a Floating Production Storage and Offloading (FPSO) vessel providing the main infrastructural support for the project,” the ministry’s release stated.

It added: “The Government and people of the Cooperative Republic of Guyana will receive a royalty of 2 percent on gross earnings and benefit from 50 percent of the profits from the sale of petroleum once production commences.” In March, the U. S. oil giant announced another major discovery of oil here at its Snoek well offshore Guyana, confirming some 82 feet of high-quality, oil-bearing sandstone reservoirs.

ExxonMobil affiliate Esso Exploration and Production Guyana Ltd commenced drilling of the Snoek well on February 22, 2017 and encountered 82 feet (25 metres) of high-quality, oil-bearing sandstone reservoirs. The well was safely drilled to 16,978 feet (5,175 metres) in 5,128 feet (1,563 metres) of water on March 18. The Snoek well is located in the southern portion of the Stabroek Block, approximately five miles (9 km) to the south-east of the 2015 Liza-1 discovery.

Following completion of the Snoek well, the Stena Carron drillship has moved back to the Liza area to drill the Liza-4 well.

“As we continue to evaluate the full potential of the broader Stabroek Block, we are also taking the necessary steps to ensure the safe, cost-efficient and responsible development of this world-class resource, which can provide long-term, sustainable benefits to the people of Guyana,” said Steve Greenlee, president ExxonMobil Exploration Company.

The Stabroek Block is 6.6 million acres (26,800 square kilometres). Esso Exploration and Production Guyana Limited is operator and holds 45 percent interest in the Stabroek Block. Hess Guyana Exploration Ltd holds 30 percent interest and CNOOC Nexen Petroleum Guyana Limited holds 25 percent interest.

http://guyanachronicle.com/2017/06/07/bigger-deal