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Guyana sees 320,000 b/d of oil flow by 2025

6 Oct 2017, 4.25 pm GMT

Guyana sees 320,000 b/d of oil flow by 2025

Kingston, 6 October (Argus) — Guyana anticipates offshore oil production of about 320,000 b/d by 2025, government officials in the South American country tell Argus.

The projection is fueled by ExxonMobil's announcement yesterday of a fifth discovery on the deepwater Stabroek block.

The US major struck hydrocarbons in the Turbot-1 well in the southeastern portion of Stabroek.

ExxonMobil has previously said it plans to start 120,000 b/d of production in 2020.

"By all indications, we expect other finds by this company (ExxonMobil) to be supported by discoveries by other prospectors, and lift output to about 320,000 b/d five years after first oil is pumped," an official of Guyana's natural resources department told Argus.

"Some international energy analysts are forecasting output higher than our projections, but our forecast is based on information delivered to us by prospectors. We are also anticipating some natural gas that we plan to use for power generation."

Guyana produces no oil or gas and imports refined products from Trinidad and Tobago and the US to meet demand of about 12,800 b/d.

With such a small domestic market, almost all of the future oil production will be exported, putting Guyana on par with Opec member Ecuador.

Opec membership is not yet under consideration in Georgetown, the official said in response to a question from Argus.

"The government has not been thinking about this. We are not yet a producer, and any thought of international affiliation is sometime in the future."

ExxonMobil began drilling Turbot-1 on 14 August 2017 and encountered a reservoir of 75ft (23m) of high-quality, oil-bearing sandstone in the primary objective. The well was drilled to 18,445ft and 5,912ft of water on 29 September, the company said.

"The results from this latest well further illustrate the tremendous potential we see from our exploration activities offshore Guyana," ExxonMobil president Steve Greenlee said. "ExxonMobil, along with its partners, will continue to further evaluate opportunities on the Stabroek Block."

ExxonMobil operates 6.6mn-acre (26,800km2) Stabroek with a 45pc stake. US independent Hess holds 30pc, and the remaining 25pc belongs to Chinese state-owned CNOOC unit Nexen.

ExxonMobil's string of successful wells in Guyana started in May 2015, when it discovered more than 1bn boe, featuring 32°API crude, at its Liza-1 well on Stabroek about 130mi offshore.

Gross recoverable resource from the Stabroek discoveries are now estimated at 2.25bn-2.75bn bl of oil equivalent (boe), the firm says.

Turbot-1 was worked by the Stena Carron drillship that will move to the Ranger prospect in the northern part of Stabroek. "An additional well on the Turbot discovery is being planned for 2018," ExxonMobil said.

Guyana's offshore acreage is part of the Guyana-Suriname basin that the US Geological Survey says contains an estimated 13.6bn bl of oil and 32 Tcf of gas yet to be discovered.

Offshore Guyana exploration remains under the shadow of a longstanding territorial dispute with Venezuela that has claimed sovereignty over the resource-rich Essequibo province that makes up the western two thirds of Guyana. The dispute has prevented the countries from demarcating their maritime boundary.

Caracas has previously expressed its opposition to the Stabroek activity, but has been largely quiet for at least a year as it focuses on quelling internal strife.

In a statement yesterday, Guyana´s natural resources department said: "The Turbot-1 discovery underscores the need for continued capacity building not only of government and its agencies but also of the private sector, civil society and individuals to ensure that they contribute to and benefit from the oil and gas sector in an equitable manner."

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