Financial Energy Review
Exxon has made the final investment decision on the Payara offshore field in Guyana, the company said this week, adding that it expected Payara to yield up to 220,000 bpd of crude when commercial production begins in 2024.
This would be the third offshore development project of the supermajor in Guyana, which rose to fame thanks to a string of discoveries in the Stabroek block made by Exxon and its partner Hess Corp. So far, the discovered recoverable resources in the block have been estimated at more than 8 billion barrels of oil equivalent.
The partners have made 18 discoveries, with a combined potential for producing up to 750,000 bpd of crude. Liza Phase 1, the first discovery, is already producing, and Liza Phase 2 should start producing in 2022, Exxon said, at a rate of 220,000 bpd. Payara will be the third development to begin production. The 750,000-bpd target for the whole block should be reached in 2025, according to plans.
Such a rate of production would turn the tiny Latin American nation sandwiched between Venezuela and Suriname into quite a large player on the international oil market. However, given the current price environment, the demand patterns, and the chances of this environment becoming chronic, these production goals may not be hit when planned.
Projections for oil demand continue to be pessimistic as the pandemic rages on. All the major forecasters in energy—the International Energy Agency, the Energy Information Administration, and OPEC—all revised down their forecasts for oil demand from earlier expectations recently.
BP also weighed in, warning that oil demand growth was in its death throes. Investment banks have differing opinions, with some such as Morgan Stanley noting the fragility of demand recovery and others such as Goldman Sachs, offering a rather more upbeat view of the future of demand and oil prices—the two factors that would determine the viability of Exxon’s Guyana projects.
