ExxonMobil working to fix offshore Guyana glitch

ExxonMobil says it is "doing all it can" to repair equipment at the Liza project offshore Guyana that has caused crude production to plummet in recent days.

Output fell by 65pc to 27,500 b/d from early May because of technical problems with compression equipment, the country's environmental protection agency said this week.

ExxonMobil kicked off production at Liza on the Stabroek block using the Liza Destiny platform in December.

The company estimates recoverable resources at Stabroek of 8bn barrels of oil equivalent (boe) and is projecting output to reach 750,000 b/d in 2020.

The production decline has cast doubt on reaching a June target of 120,000 b/d. A third 1mn bl cargo allotted to the government is scheduled to be loaded by Shell in July.

"The current situation is a temporary, unplanned event related to project start-up," ExxonMobil said.

"We are doing all we can to repair the equipment safely in order to complete final commission of the system. We have also reduced crude oil production to lessen the amount of gas being flared."

The company said it has programs in place to reduce downtime and upsets that can result in flaring.

Guyana's energy department director Mark Bynoe declined to comment on the technical issue but told Argus that "dialogue between the operator and the government remains excellent."

The department is scheduled to issue a short list by 25 June of the bidders selected to make technical and financial proposals for a one-year contract to market the government's share of crude.

Guyana received $35/bl for its second 1mn bl entitlement from the Liza project, the finance ministry said yesterday.

The cargo of 32.1°API crude loaded on 21 May under an agreement reached with Shell Western Supply and Trading in a restricted opening tender after production started in December 2019.

The country received $55/bl for its first allotment that loaded in February.

With royalties from production by the ExxonMobil consortium, the country's earnings from oil this year have reached $94.9mn, the finance ministry said.

The funds are deposited in the country's sovereign wealth fund held at the Federal Reserve in New York.

The oil price collapse and faltering production have undermined the government's 2020 oil revenue projection of $300mn.

At the same time, aspects of Guyana's future oil policy are uncertain because of a likely change of government. A declaration of the winner of the contentious 2 March parliamentary elections is expected in a few days.

By Canute James