Guyana’s government has approved an operating license and environmental permit for Exxon to begin pumping loads of oil and gas from the seabed by 2020, five years after the company said it had found world class deposits of hydrocarbons off the coast of the Caribbean Community nation.
Resources Minister Raphael Trotman told a late Thursday night sitting of parliament that the way is now cleared for Exxon and partners, Hess Corp and Nexen of China, to go ahead with plans to develop their Liza oil field, which he said is believed to contain at least two billion barrels of high quality light crude.
The company was also handed its environmental permit. Both documents were issued in recent days Trotman said while legislators debated a bill governing the country’s fledgling oil and gas sector.
“Government has taken a decision to issue that license. This follows on the advice of world-renowned experts who advised that it was possible to do so,” he said. “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. We believe that to date the estimate-barrels of oil in the Stabroek Block by ExxonMobil — may equal as much as two billion barrels of oil.”
The firm has drilled more than half a dozen wells since 2015 with only one coming up dry and plans to bore up to 17, some of which will be used to store gas to build up pressure in the extraction wells.
Exxon has already said that it would have invested $5 billion by the time it is ready to pump oil or gas but will be allowed to recover its money over time through a sharing agreement with Guyana as “the Government and people of Guyana will receive a royalty of 2 per cent on gross earnings and benefit from 50 percent of the profits from the sale of petroleum once production commences.”
The 2015 discovery has brought dozens of companies to Guyana trying to acquire blocks near Exxon’s fields. Repsol recently said that it is poring over promising 2D seismic data near to Exxon, while Tullow Oil and several others are also getting ready to do similar work.