2M barrels of oil lifted from Liza Fields 1 & 2 in June

The content originally appeared on: INews Guyana
Minister of Natural Resources Vickram Bharrat

Two crude lifts from the Liza Unity and Liza Destiny floating, production, storage and offloading (FPSO) vessels in the Stabroek block, each a million barrels of oil, have been recorded for the month of June thus far.

This was revealed by Natural Resources Minister Vickram Bharrat on Tuesday on the sidelines of the sod-turning ceremony of the Vreed-en-Hoop Shore Base Facility. According to the Minister, these lifts were recorded only last week. The next lifts will be in July and August, and will come from the Liza Unity and Liza Destiny respectively.

When it comes to how much money Guyana would make from these lifts, Bharrat noted that that would depend on the world market price for crude. Prices for Brent crude are currently at US$113 a barrel.

“We already have a contract with Saudi Aramco with Destiny. That’s a one-year contract. And then for Unity, in keeping with the crude lifting agreement, we’ve been doing the spot sale, accepting bids from the co-vees as well as other interested parties. And obviously, we’ve been selling to the best offer we receive. That’s the bottom line for us. Getting as much as possible for the country,” he said.

According to Bharrat, this would be the approach moving forward for crude from the Liza Destiny. The Minister also noted that, naturally, the companies would be expected to have the capacity to market the crude.

Back in April, for the first time in Guyana’s short oil production history, Guyana had had as many as two oil lifts in one month, with lifts from the Liza Destiny and Liza Unity FPSO vessels crossing paths.

In March, Bharrat had explained that the country got approximately US$95 million for the previous lift. And with Brent crude prices averaging US$120 per barrel at that time, he had noted that Guyana could expect to make over US$100 million for each lift, should both lifts from the Liza Destiny and Liza Unity be completed in April.

The historically high oil prices (oil prices have not exceeded US$100 on the global market since 2014) are part of the fallout from Russia’s invasion of Ukraine. It is, however, a double-edged sword where Guyana is concerned. That is because of the sharp rise in oil prices at the local pumps.

When the lifts were completed in April, the Guyana Government had announced it would be receiving US$106 million for its first oil lift entitlement from the Liza Unity FPSO vessel, having already sold the lift via a competitive bidding process to an ExxonMobil affiliate.

“The first cargo of Guyana’s lifting entitlement was sold to ExxonMobil Sales and Supply LLC, following a competitive bidding process by the five companies, inclusive of the covertures of the Stabroek Block,” the Government had explained.

Guyana, with US oil giant ExxonMobil as the operator, began producing oil on December 20, 2019 in the Stabroek Block. The first-ever payment of US$54.9 million for an oil lift was received in February 2020.

ExxonMobil has said it anticipates at least six projects offshore Guyana would be online by 2027, with developmental drilling recently starting on the second one, the Liza Phase 2 project. Production has already started in the second phase, with the Liza Utility floating, production, storage and offloading (FPSO) vessel in operation.

The third project –the Payara Development – would meanwhile target an estimated resource base of about 600 million oil-equivalent barrels, and was at one point considered to be the largest single planned investment in the history of Guyana.

Meanwhile, the Yellowtail development, which will be oil giant ExxonMobil’s fourth development in Guyana’s waters, would turn out to be the single largest development so far in terms of barrels per day of oil, with a mammoth 250,000 bpd targeted.