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ExxonMobil said on Friday that it had made a final investment decision to proceed with the first phase of development of the Liza field offshore Guyana, which is expected to cost just over US$4.4 billion.
The Phase 1 development at Liza field—one of the largest oil discoveries of the past decade—will include a subsea production system and a floating production, storage, and offloading (FPSO) vessel designed to produce up to 120,000 barrels of oil per day, Exxon said.
Production is expected to begin by 2020, less than five years after discovery of the field. The U.S. major’s development plan has received regulatory approval from Guyana’s government, Exxon added.
“We’re excited about the tremendous potential of the Liza field and accelerating first production through a phased development in this lower cost environment,” Liam Mallon, president, ExxonMobil Development Company, said in the press release.
The Liza field is part of the Stabroek Block, which measures 6.6 million acres, or 26,800 square kilometers. ExxonMobil’s affiliate Esso Exploration and Production Guyana Limited is operator and holds a 45-percent interest in the block, with Hess Guyana Exploration owning another 30 percent interest, and CNOOC Nexen Petroleum Guyana Limited holding the other 25 percent.
Together with the Phase 1 final investment decision, Exxon said that Liza-4 exploration well drilled in the block encountered high-quality, oil-bearing sandstone reservoirs, which will underpin a potential Liza Phase 2 development.
Related: How A $200,000 Well Could Drastically Change The Oil Industry
The latest estimates for the Stabroek block now suggest that gross recoverable resources at the block are 2 billion to 2.5 billion oil-equivalent barrels, which includes Liza and other successful exploration wells on Liza Deep, Payara, and Snoek.
Exxon announced the first major oil and gas discovery in Guyana in May 2015. Since then, the company has had several exploration successes offshore the tiny Latin American country squeezed between Venezuela and Suriname.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.