With every day that passes without the approval for ExxonMobil’s third project called Payara, Guyana is increasing the opportunities for financial loss as well as impacts on the production to be had from the Stabroek Block. Sharing this perspective with the market recently was Rystad Energy.
In one of its latest assessments of the Payara project, Rystad reminded that its development was once envisaged to be sanctioned in 2019 and to have first oil delivered by 2023. It noted however that there has been challenges to securing approvals in recent months. From a highly contested elections season earlier this year to no resolution more than three months after March’s election, Rystad said it is clear that the prolonged political uncertainty could further impact the project offshore Guyana.
With this in mind, Rystad pointed out that the delays have already removed more than 50 million barrels of production that could have been achieved by 2030 if the project had been sanctioned in 2019.
Furthermore, the research company noted that the development partners involved, that is to say ExxonMobil, Hess Corporation and CNOOC/NEXEN, are hoping to receive approval later this year. Rystad was not so optimistic in its forecast. In its updated base case scenario, it projects that approvals would not be sanctioned until the first half of 2021 and that the Payara will achieve first oil by 2024.
Expounding further, Rystad said, “We have looked at four potential scenarios with delays ranging from three to 24 months. Our analysis shows that Guyana may lose around 10 million barrels of oil that could be produced from the project by 2030 presuming just a three-month delay, a number which climbs to around 75 million barrels assuming a 24-month delay.”
Even in the face of delays, Rystad opined that the project is still in a position to produce more than half of its reserves by 2030 if it is able to commence production by 2024.
THE PAYARA PROJECT
ExxonMobil has identified Payara as the third potential development project within the Stabroek block after Liza Phase One and Two. The Payara discovery was announced in January 2017. The discovery well was drilled in a new reservoir, encountering more than 29 meters of high-quality oil-bearing sandstone reservoirs. It was safely drilled to 5,512 meters in 2,030 meters of water.
The Payara development plan includes a floating production, storage and offloading vessel (FPSO) named Prosperity. It is expected to produce 220,000 barrels per day supporting up to 45 wells, including production, water injection and gas injection wells.