Exxon Mobil Corp. and Hess Corp. have both made a final investment decision to proceed with the first phase of development for the Liza field offshore Guyana.
The Liza Phase 1 development includes a subsea production system and an FPSO vessel designed to have the capacity to process up to 120,000 b/d of oil from four subsea drill centers consisting of 17 wells, including eight producers, six water injectors, and three gas injectors.
Production is expected to begin by 2020, less than five years after discovery, and develop about 450 MMbbl of oil. The development received regulatory approval from the government of Guyana.
Phase 1 is expected to cost more than $4.4 billion, which includes a lease capitalization cost of about $1.2 billion for the FPSO facility and $3.2 billion for drilling and subsea infrastructure. Hess reported that its net share of development costs is forecast to be about $955 million, of which $110 million is already included in its 2017 capital and exploratory budget. About $250 million is expected in 2018 and approximately $330 million in 2019, with the balance expected between 2020 and 2021.
Located in the 6.6-million acre (26,800-sq km) Stabroek block, the Liza field is about 190 km (118 mi) offshore in water depths of 1,500 to 1,900 m (4,921 to 6,234 ft).
ExxonMobil affiliate Esso Exploration and Production Guyana Ltd. is operator and holds a 45% interest in the block, along with Hess Guyana Exploration Ltd. (30%) and CNOOC Nexen Petroleum Guyana Ltd. (25%).
Exxon also reported positive results from the Liza-4 well, which encountered more than 60 m (197 ft) of high-quality, oil-bearing sandstone reservoirs, which will underpin a potential Liza Phase 2 development. Gross recoverable resources for the Stabroek block are now estimated at 2 -2.5 Bboe, which includes Liza and other successful exploration wells on Liza Deep, Payara, and Snoek.
Drilling of the Payara-2 well on the Stabroek block is expected to begin later this month and will also test a deeper prospect underlying the Payara oil discovery.