Guyana banks US$1.2M in royalty from first Exxon lift

April 3

The Ministry of Finance calculates royalty payment for January from the Liza-1 well operations in the offshore Stabroek Block will credit Guyana with US$1.26million as the ExxonMobil consortium lifted some 1,025,305 barrels of crude.

Based on the current draft of the procedure, the average fair market price of crude for January 2020 was US$61.87 per barrel (BBL). The value of the royalty for January 2020 would thus be US$1,268,706, the January Report on Petroleum Production and Revenues (RPPR) states.

The Ministry of Finance previously announced that it would publish the bi-monthly RPPR to give clear insight into oil produced and revenue derived for each calendar month.

As per Article 15.6 of the Petroleum Agreement for the Stabroek Block, the royalty cash payment for a calendar quarter will be made to government 30 days after the end of that quarter. According to Article 11.2 of the Petroleum Agreement for the Stabroek Block, in any month during which crude is produced and sold, a maximum of 75 percent of crude produced net of losses and operations, can be allocated to permissible recoverable costs incurred by the Contractor. This volume of crude is referred to as cost oil. The remaining crude is referred to as profit oil and is to be split equally between the Contractor and government.

Each lift from Liza Destiny will is expected to be approximately 1,000,000 BBL as agreed by government and Exxon and its partners. Since cargoes are lifted 1,000,000 BBL at a time in any given month there will be some parties that have lifted more than their entitlement and some that have lifted less. Entitlements are reconciled with actual lifts in the (Over)/Under Lift account and brought forward to the next month.The report notes that the production of oil from the Stabroek Block was reported to be 1,745,930 BBL for January 2020, or 56,320 BOPD [barrels of oil per day]. Of the 1,745,930 BBL produced, a total of 1,020 BBL was used for facility fill.

There were no operational losses reported for this period and no crude was used for fuel or transportation in petroleum operations.

Giving a breakdown of sales and entitlement, it explains, “During January 2020, there was one cargo lifted from Liza Destiny, by ExxonMobil, which amounted to 1,046,897 BBL. This lift included the 21,592 BBL of Marine Gas Oil and Intermediate Fuel Oil loaded onto the Liza Destiny in Singapore for commissioning activities (see RPPR Dec 2019). The remaining 1,025,305 BBL of crude lifted in January 2020, i.e. 1,046,897 – 21,592, was produced from the Liza field.”

In January, the cost recovery ceiling amounted to 1,308,682 BBL or 75 per cent of 1,744,910. “Given that recoverable costs are far in excess of the cost recovery ceiling for January 2020, all 1,025,305 BBL produced and sold from the Liza field was allocated to cost oil.”

“The 719,605 BBL of PALO remaining after the allocation to cost oil, i.e. 1,744,910 –1,025,305, is referred to as profit oil, of which the government is entitled to 50 percent, or 359,802 BBL.” Since government was not allocated any cargoes in January 2020, it would have under lifted 359,802 BBL during that month, which, when combined with the previous month’s under lift of 92,633 BBL, gives a cumulative under lift of 452,435 BBL at the end of January.

“The Contractor lifted one cargo in January 2020, but was still under lifted by 338,211 BBL, i.e. 1,025,305 + 359,802 – 1,046,897. When combined with the previous months under lift of 71,040 BBL, the Contractor, cumulatively, under lifted 409,251 BBL at the end of January 2020. Government has elected to receive its 2 per cent royalty in cash, which will be paid from the Contractor’s share of profit oil. The royalty due to Government for January 2020 will be based on 2 percent of the volume produced and sold in that month, which is 20,506 BBL, i.e. 2 percent of 1,025,305. This amount will be valued in accordance with Article 13 of the Petroleum Agreement for the Stabroek Block.”

The December RPPR report stated that production of oil was 427,282 BBL for December 2019, or 35,607 BOPD.

Of the 427,282 BBL produced, a total of 3,202 BBL were used for facility fill, which includes the oil that remains in the various piping before the cargo tanks. It is estimated that an additional 1,020 BBL will remain in the hose and piping between cargo tanks and the offloading hose point at the completion of the first lift. A further 282,000 BBL of oil produced in December 2019 was used for ballast in the cargo tanks. These operational volumes will remain on the FPSO facility and in the piping until production from Liza Destiny has ceased. There were no operational losses reported for this period.

The PALO during December 2019 was 142,081 while the total volume of crude on the Liza Destiny facility at the end of December 2019 was 448,875. During December 2019, no oil was lifted from Liza Destiny since the volume available for lifting, 163,673 BBL, was less than the standard cargo size of 1,000,000 BBL.Since no petroleum was sold in December 2019, all petroleum produced in that month was allocated to profit oil, of which the government will be entitled to half.

Central Bank deposits almost US$55M payment into Natural Resource Fund

Mar 20, 2020

Central Bank Officials confirmed that Guyana’s Natural Resource Fund received the first oil payment from Shell Western Supply and Trading Limited (SWSTL), based in Barbados.The officials declined to reveal how much Guyana received but noted that the payment was deposited into the account held at the Federal Reserve Bank of New York.

The Finance Minister disclosed that Guyana received almost US$55M for the first million barrels of oil sold to SWSTL.  In mid-February local authorities witnessed the transfer of Guyana’s first million-barrel lift of crude onto the oil tanker Cap Philippe chartered by Shell. It had bought, in total, Guyana’s first three million barrels of crude from the Liza Phase One Project. Energy Department Head, Dr. Mark Bynoe said that Guyana is entitled to at least five million barrels of oil in 2020.

The subsidiary of Shell, which is the third-largest company in the world based on 2018 revenues, won the bid on account of a competitive pricing that limits the Government’s exposure to market uncertainty; the size, scale and global reach of its trading operations; the high level of integration between Upstream, Trading and Downstream; Shell’s strong foothold in the Latin American markets and the size and scale of their shipping and storage operations in the region, allowing for multiple options on the Liza crude commercialization; and the range of new grades Shell recently introduced into the market.

The Department also took into consideration Shell’s willingness to share critical refinery information which Guyana needs, in order to understand the Liza crude behaviour. Shell’s readiness to support it in operating these cargoes, while it is strengthening its structures and in-house crude commercialization human resources, was also a determining factor.

CENTRAL BANK’S ROLE

In a Memorandum of Understanding (MoU) signed last year, Central Bank is tasked with the role of Operational Manager of the Natural Resource Fund. Bank of Guyana has responsibilities which include receiving and accounting for all deposits into the NRF; investing the NRF in eligible asset classes; appointing private managers and custodians; and reporting on the performance of the NRF on a monthly, quarterly and annual basis. Central Bank will have to implement management systems, procedures and risk management arrangements in accordance with international standards; and provide the public with information on the NRF as required by law; among others.

Lower price for the next million barrels

April 11, 2020

Guyana’s next lift of a million barrels of oil is expected in May, when the  Department of Energy (DoE) projects maximum production of 120,000 barrels of oil per day, but revenues will be less than the US$55M for the first lift in current market conditions.

Reduced revenue follows the decision to sell its 2020 five lifts of oil at current day Brent prices, instead of hedging, until a substantive crude oil marketer advises on future lifts. Less money earned this year and the current global impact on the oil and gas sector will lower the projected 86 per cent growth in GDP , according to analysts. The DE is crunching its own numbers to see just how much the country will be affected.

SBM Offshore project delays

Apr 10, 2020

Dutch company SBM Offshore, completing the construction of a second oil storage vessel, the Liza Unity, adjusted work plans to halt the novel coronavirus. Construction yards in China reopened in February and are now close to planned capacity. In Singapore and Dubai, yards were open until the end of March but the authorities suspended activities at the yard in Singapore for f two weeks. Delays in project execution will be unavoidable. Liza Unity being constructed in the Singapore shipyard is affected by the closure. The Company is in close contact with clients and business partners to manage the situation, adjust execution planning and where appropriate, create mitigation plans. SBM put in place . additional measures and protocols to ensure the health and well-being of staff and contractors at construction yards in many parts of the world.

Business continuity protocols have been activated to keep offshore operations safe and stable, with only essential maintenance being performed. Crew changes have become more difficult as travel restrictions apply in and out of countries where the company has operations or crew members are located. Crew rotations have been extended for those offshore while their upcoming counterparts are in self-quarantine at monitored facilities onshore.

SBM Offshore transported some crew members with symptoms from one FPSO back to shore. where tests confirmed positive COVID-19 cases. The company is assessing the situation with the client and the authorities.

With respect to SBM Offshore’s office locations, most staff continue to work from home and are updated on a regular basis, supported with advice to help them achieve a healthy balance between professional and personal lives. Activity and operations continue, although with some incremental expenditure to keep operations running safely. Measures have been taken to postpone non-vital programmes to reserve cash to help offset these impacts.

SBM noted that its priority is the health and safety of its staff, contractors and their families, while ensuring safe operations across activities. A dedicated task force continues to monitor the situation at all company locations , on a daily basis. SBM will continue to follow advice from the relevant authorities and medical experts regarding its work.

Exxon may delay Payara project amid low price, spending cuts

April 7 (Reuters) – Exxon Mobil may delay the start of production at its Payara project, its third major development in the world’s newest offshore oil hotspot, as the company scales back spending during the crude price crash.

Payara startup had been slated for “as early as 2023” and was expected to eventually produce some 220,000 barrels per day of crude.

Exxon and partners Hess Corp and CNOOC discovered over 8 billion barrels of recoverable oil in the South American country, which has no history of production.The Exxon-led consortium in January produced some 56,320 bpd of crude at the first Phase 1 of its Liza project. Phase 2 of the same venture, at the prolific Stabroek block, is the next project expected to bring production online.

Current operations at Liza were unaffected by a 30% cut in planned capital spending this year as the coronavirus pandemic saps energy demand and oil prices. Startup of the second phase of Liza remains on track for 2022.

Developing the 16 world-class deepwater discoveries offshore Guyana remains an integral part of its long-term growth plans. Current operations onboard the Liza Destiny production vessel are unaffected and startup of the second phase of field development remains on target for 2022, with the Liza Unity production vessel currently under construction.

As the consortium awaits government approval to proceed with a third production vessel for the Payara development, some 2020 activities are being deferred, creating a potential delay in production startup of six to 12 months. The caretaker government was reviewing Exxon’s plan to develop Payara and could not provide a timeline on when approval could be granted.

Worldwide oil demand dropped by as much as 30% in recent weeks, coinciding with an oversupply of Middle Eastern crude, sending prices to multi-decade lows. That put projects to develop up to 16 billion barrels of oil in Latin America at risk of cancellation or delay. That includes some of Guyana’s offshore projects, as their breakeven prices are estimated between $20 and $30 per barrel.

Luc Cohen Jennifer Hiller i Marianna Parraga and Marguerita Choy

 

ExxonMobil excludes offshore projects from capex cuts

Apr 7th, 2020

IRVING, Texas Capital investments of around $23 billion will be down from previous guidance of $33 billion. To lessen risks presented by COVID-19 contagion and maintain its operations, ExxonMobil put in place enhanced cleaning procedures and modified work practices at its sites around the world. It is maximizing production of products critical to the global response. Isopropyl alcohol is used to manufacture hand sanitizer. Polypropylene ia used to make protective masks, gowns and wipes.

04/07/2020

Westmount Energy – Guyana remains profitable

Apr 06, 2020

Guyana remains a major investment growth area for offshore players even with the low break-evens as the effects of the coronavirus and the oil price war between Russia and Saudi Arabia plunge the petroleum industry in turmoil.

  Westmount Energy Limited, a British investment holding company withl shares in firms having key positions in prime offshore blocks. reported that the major incumbent players in the offshore sector have been guiding reduced capital investment for 2020, in response to the sudden oil price collapse.

Near term discretionary exploration drilling offshore may be less affected by these immediate budgetary adjustments than drilling in other regions.

The main impact of COVID-19 is its potential to delay operations as travel restrictions hinder international flow of offshore workers. Well capitalized with £2.6M cash at December 31, 2019, and with a low fixed cost base, Westmount Energy is not experiencing any major disruption to its business model from the Coronavirus.

Westmount Board remains focused on investment opportunities and deployment of capital that gives additional exposure to drilling in this prolific emerging basin. Its current investment portfolio offers shareholders exposure to potentially a minimum of three ExxonMobil-operated Upper Cretaceous wells, across the Canje and Kaieteur Blocks, over the next 12 months.

Current guidance from deepwater operators indicates that Westmount is likely to be the only London quoted junior player offering exposure to drilling offshore Guyana in 2020. Success in some of these wells could result in transformational value changes for the medium term and positive times ahead for shareholders.

Westmount told shareholders that the near term outlook is likely to be dominated by extreme volatility, as authorities grapple globally with containment and mitigation measures during a series of unprecedented events in the path of the pandemic,

“The duration of the pandemic is unclear at this stage, though there is evidence from China…which suggests that the measures taken there have been successful and that the peak of the epidemic there has now passed (after 3 months). .. synchronized economic stimuli are being put in place by governments across the main global economies to cushion the immediate impacts and promote economic rebound.”

Westmount contended that proven plays, large discovered volumes and prodigious exploration success rates, continue to highlight the Guyana-Suriname Basin as a global exploration hotspot.

ExxonMobil monitors workers as COVID-19 advances

Apr 09, 2020

The Public Relations and Government Affairs Advisor at ExxonMobil gave assurances that the supermajor oil and gas corporation is taking all the necessary precautions to protect the health of employees. Offshore workers are screened at Ogle heliport before they are cleared to travel offshore to detect symptoms of the virus and enure they did not knowingly come into contact with infected persons.. Medical personnel onboard offshore facilities monitor the health of workers and provide appropriate treatment and care. For the time being, there is no impact on production on the Liza Destiny, Guyana’s first floating production storage and offloading vessel.

“At this time, we are managing production rates to ensure safe and responsible operations and as indicated before, we continue to monitor the situation closely and will make adjustments as necessary.”

From a global perspective, ExxonMobil’s Chief Executive Officer advised that the company is curtailing business travel. Darren Woods noted that ExxonMobil has a long history of operating around the world during outbreaks of Ebola and Severe Acute Respiratory Syndrome (SARS). ExxonMobil developed robust protocols to respond effectively to similar situations such as the coronavirus pandemic.

“We executed that (robust protocol) very early on, which means cutting back discretionary travel; which means folks moving into their homes and working remotely. We have geared up our workforce so we can do that effectively…So we have implemented that early on. What happens is, as we find that coronavirus is breaking out in different localities, we will set up systems. We have about 1500 employees in China, 750 in Italy, 125 in South Korea, and all those protocols have been in place. I am pleased to say that it has not affected our employees.”
Regarding the effect on operations, Woods admitted that some customers in China retreated and “that meant less product demand.” ExxonMobil has work to be completed at some fabrication yards which slowed down.

The company announced cuts of f US$10B from capital investments and reduced operating expenses by 15 percent. Adjusting its balance sheet regarding cost-saving strategies, a key consideration will be to stay on top of the coronavirus and keep employees safe.

Medical Assistance

An ExxonMobil team of experts in chemicals, materials science and manufacturing offered their experience to help a collaborative effort organized by the Global Center for Medical Innovation. By quickly connecting its customers to solution providers, ExxonMobil helped create a new supply chain to respond to the medical needs in hospitals across the country. This collaboration, which represents industry, academia and government, is rethinking how protective medical equipment, specifically face shields and face masks, is made.

The isopropyl alcohol (IPA) production unit, in the Baton Rouge Chemical Plant, is working at maximum capacity to provide the main ingredient in hand sanitizer to states in need. Isopropyl alcohol is popular in particular for pharmaceutical applications, as a solvent and a cleaning fluid, especially for dissolving oils. Together with ethanol, n-butanol, and methanol, it belongs to the group of alcohol solvents, about 6.4 million tonnes of which were used worldwide in 2011.

Rubbing alcohol, hand sanitizer, and disinfecting pads typically contain a 60–70% solution of isopropyl alcohol or ethanol in water. Water is required to open up membrane pores of bacteria, which acts as a gateway for isopropyl alcohol. A 75% v/v solution in water may be used as a hand sanitizer.

Exxon provides the chemicals used in medical face masks, IV bags, ventilator machines and hospital gowns. Baton Rouge Chemical Plant is home to the world’s largest IPA production unit, which produces millions of gallons each year. 2020 marks the 100th year since ExxonMobil (then Standard Oil of New Jersey ) first introduced commercial-scale production and supply of IPA to the market. ExxonMobil is actively engaged with the states of New York and Louisiana, providing IPA to ensure continuity in the manufacture of disinfectant products for hospitals and other key community locations.

ExxonMobil faces challenge to drilling plans

Apr 04,

US giant may re-think wildcatting programme on Canje and Kaieteur blocks due to potential crew change difficulties

Gareth Chetwynd said ExxonMobil is facing a difficult decision on whether to proceed with planned exploration wells on two deep-water blocks in Guyana as the COVID-19 disrupts drilling plans

Travel restrictions led ExxonMobil to make plans to adjust drilling activities offshore Guyana.  ExxonMobil is working assiduously towards limiting the disruption of the coronavirus to its operations. ,

“We continue to monitor the COVID-19 situation closely and will adjust operations as necessary with safety and the protection of the environment as priorities.”

The Environmental Protection Agency (EPA disclosed that ExxonMobil had planned to drill over 20 wells but the Coronavirus has affected the approval process.
ExxonMobil had planned to drill 31 wells in three blocks–Stabroek, Kaieteur and Canje.

“They were split up into three blocks and 25 were for the Stabroek. Permission has not been granted as yet because we are still reviewing the Environmental Management Plans for those. Then they have three planned for Canje but that is not permitted. Another three were supposed to be for Kaieteur but after some discussion, they decided to just do one so it is now 29 wells. This entire process would be affected because of the Coronavirus and the need to do staff rotations, etc…”

ExxonMobil owns a 45% stake in the Stabroek Block, with Hess Corporation HES holding a 30% interest. The remaining 25% stake at the block is owned by CNOOC Petroleum Guyana Limited, a subsidiary of CNOOC Limited .

In the adjoining Kaieteur Block, north of Stabroek, operator ExxonMobil owns a 35% interest, partnered by Ratio Energy of Israel and Hess. In the 13,500-square kilometer Kaieteur Block water depth is in the range of 2,800 -3,800 meters. In the 6,021-square kilometer Canje Block located east of Stabroek, ExxonMobil holding a 35% operating stake is partnered by Total S.A, JHI Associates and Mid-Atlantic Oil and Gas.

ExxonMobil told the world market that significant budget cuts would result from the coronavirus. While it is still to make those details known, approval for two of its major projects here, Payara and Hammerhead, have been stalled.

Oil price dive not yet impacting Exxon Guyana output

Apr. 3, 2020 2:59 PM ET|:

Carl Surran, SA News Editor
Operator Exxon Mobil says plunging crude oil prices have not impacted production at the Liza project but adjustments will be made if necessary after engaging with the government.

“I can’t see them shutting down production,” says Ruaraidh Montgomery, of Welligence consultancy, noting projected lifting costs for Liza partners will be just over $10/bbl for the full year. Production at the Liza well, which Exxon and partners Hess and CNOOC brought online in December, is expected to reach 120K bbl/day in its first phase.

Exxon operations continue

March 25, 2020

COVID-19 travel restrictions could hamper drilling activity

EXXONMOBIL is continuing its operations, both on and offshore Guyana, with special health measures in place due to COVID-19, but current travel restrictions in place in Guyana and other key countries have impacted normal operations in the Stabroek Block.   Should the worldwide restrictions continue, the company has put in place plans to slow down drilling activities offshore Guyana.

“Efforts are being made to limit the disruption of the coronavirus, but given the global nature of our operations, travel restrictions have impacted our ability to move workers into Guyana and will impact our ability to maintain normal operations offshore. We are evaluating our staffing levels on our four drilling vessels and the Liza Destiny FPSO to determine next steps. We have made contingency plans to slow down drilling activities in the coming weeks, starting with exploration drilling, in the event sustained travel restrictions prevent us from carrying out these activities,” Public and Government Affairs Advisor at Esso Exploration and Production Guyana Limited (EEPGL), Janelle Persaud said.

There is currently no impact to production on the Liza Destiny, but, for the US oil giant, the safety of individuals working offshore and the protection of the environment remain priority. ExxonMobil continues to monitor the coronavirus outbreak closely in keeping with guidance from relevant authorities. As protocol, the company is relying on its well-established processes in place to manage impacts related to infectious disease outbreaks.

“We are screening workers at the Ogle heliport before they are cleared to travel offshore to ensure they are not exhibiting symptoms of the virus and that they have not knowingly come into contact with anyone who has the virus. As a further precaution, medical personnel onboard our offshore facilities will continue to monitor the health of the workers and provide appropriate treatment and care. Onshore, most office employees are working remotely as we have instituted ‘social distancing’ protocols, except for employees working on operations-critical activities.”
Advisories have also been sent out to its personnel to reinforce general prevention measures to avoid becoming ill even as they work from home.

Exxon temporarily suspended the construction activities for its local headquarters at the Ogle, East Coast Demerara location. The contract was awarded to NABI/KCL Oilfield Construction Services Guyana back in April 2019. It is a Guyanese-led joint venture initiative between NABi Construction Inc. (Guyana) and Kee-Chanona Limited (Trinidad). At the beginning of March, the Environmental Protection Agency (EPA) announced that EEPGL had applied to undertake the Hammerhead Development Project, with facilities for petroleum production expected to last at least 20 years.

It marks the pursuit of Exxon’s fourth development project, with Liza Phase I and Liza Phase II already approved, and Payara awaiting approval. In keeping with the Environmental Protection Act No. 11, 1996, the EPA says, an Environmental Impact Assessment (EIA) for development must first be provided before any decision is made as the project could have significant impacts on the environment. The public was invited from the day of the publication of the notice to make written submissions within 28 days, highlighting questions and matters to be considered in the EIA.

Eco (Atlantic) announces strict cost cutting programme

01 Apr 2020

Eco (Atlantic) Oil & Gas , the oil and gas exploration company with licences in highly prospective regions in South America and Africa, provides an update to the market.

In light of the COVID-19 pandemic, Eco continues to take all the recommended measures to protect the welfare of personnel. Ensuring safety of employees remains a major priority for the business and the Company has taken steps to secure their health, safety and well-being . Eco has curtailed all travel and has installed a Company-wide work from home policy until government restrictions are lifted.

Given the recent lower oil price environment and current market conditions, since February 2020, the Company has undertaken a strict cost cutting programme across all aspects of the business, aside from the necessary maintenance of certain operations. These include termination of non-core services and cessation of business related travel. The Board and management are voluntarily taking pay cuts of up to 40% starting in April 2020 and this will be kept under review on a monthly basis thereafter.

The Company continues to monitor its operating budget for 2020 and to work closely with its partners to discuss and plan next steps. To date, Eco has met all of its work commitments for 2020 under the various petroleum agreements offshore Guyana and Namibia, and thus only minimal costs are expected to be incurred over the remainder of the year.

As at 31 March 2020, the Company continues to benefit from its strong balance sheet, with cash and cash equivalents of CAD$26.5 million (US$18.8 million) and zero debt. Eco remains fully funded for its share of further appraisal and exploration drilling at Orinduik block offshore Guyana, up to US$120 million (gross). In light of the cost cutting measures described above, preserving the Company’s significant cash balance, the Board believes Eco will be in a robust position to progress its exploration strategy when market conditions improve and operations are able to resume. The Company will continue to update the market on developments as appropriate.

Source: Eco Atlantic Oil & Gas

DE extends deadline in search for fuel marketer
The Department of Energy (DE) received a flurry of questions since it advertised a request for expressions of interest (EOIs) for a marketer for Guyana’s oil last month. The agency extended the deadline for submissions for a second time.
interested parties posted questions ranging from specifications for delivery to aspects of the contract and a request to meet Director Dr. Mark Bynoe to the Ministry of the Presidency website The DE responded to all, in addition to notifying of the extension until April 21.

UPSTREAM FOCUS
(CHECK THIS LAYOUT)

1. Standardisation boosts efficiency  SBM Offshore’s Fast4Ward floater concept centre stage as operator ExxonMobil strives for speedy project development

Exxon suspends construction of Ogle HQ

March 23, 2020

ExxonMobil instituted social distancing protocols and temporarily suspended campus construction activities its local headquarters at Ogle, East Coast Demerara. Precautionary measures ifollow the global spread of the novel coronavirus disease (COVID-19), Through a sublease arrangement, on 10 acres of land leased to Ogle Airport Inc (OAI) by the Guyana Lands and Surveys Commission, ExxonMobil plans to construct its state-of-the art corporate headquarters.

Exxon notifies contractors, vendors of cuts

March 23, 2020

(Reuters) – Exxon Mobil Corp is notifying contractors and vendors of planned near-term cuts in capital and operating expenses over a coronavirus pandemic and will announce the plans once they are final, a company spokesman said.

“Based on this unprecedented environment, we are evaluating all appropriate steps to significantly reduce capital and operating expenses in the near term. We are notifying contractors and vendors of our intended reductions, and they may be adjusting their staffing and budgets accordingly.”

Exxon reduced production at its refinery in Baton Rouge, Louisiana, and cut 1,800 contract workers employed by third-parties contracted by Exxon for refinery maintenance.

“Exxon Mobil will outline plans when they are finalized.” Exxon will make significant spending cuts, Chief Executive Darren Woods said on March 16.

AI) by the Guyana Lands and Surveys Commission, ExxonMobil plans to construct its state-of-the art corporate headquarters

Exxon reduced production at its refinery in Baton Rouge, Louisiana, and cut 1,800 contract workers employed by third-parties contracted by Exxon for refinery maintenance. “Exxon Mobil will outline plans when they are finalized.” Exxon will make significant spending cuts, Chief Executive Darren Woods said on March 16.

Schedule for release of info on oil sales being determined

March 23, 2020 The Department of Energy said the price per barrel of Guyana’s oil will be calculated using the Brent crude benchmark after the bill of lading for the cargo is issued and how information on the sales will be released is currently being determined.

26 March 2020 23:00 GMT UPDATED 29 March 2020 10:36 GMT

By Gareth Chetwynd and Xu Yihe in London and Singapore

(This article is one part of a special eight-page Guyana Focus in this week’s issue of Upstream. The weekly issue is available as an e-reader here.) The first floating production,

2. Persistence pays off for ExxonMobil in Guyana
Country in global spotlight as series of high-profile discoveries highlight potential

26 March 2020
By Gareth Chetwynd in London

3. Guyana’s victory lap hits a rough stretch
Political turmoil, tanking oil prices and a pandemic turn celebratory mood to something more sober, but long-term outlook remains positive

26 March 2020
By Gareth Chetwynd in Georgetown

Tullow investors “frustrated” with low oil quality in Guyana licenses

March 28, 2020

In its latest Annual Report, Tullow recalled that it had completed a three-well exploration campaign in Guyana in 2019, drilling the Jethro-1 and Joe-1 wells in the Tullow-operated Orinduik licence and the Carapa-1 well in the non-operated Kanuku licence.

In the Orinduik Block, the Jethro-1 and Joe-1 wells discovered 55 metres and 14 metres of net oil pay, respectively in Tertiary-age reservoirs. Full analysis indicated both deepwater discoveries contained heavy oil with high sulphur content. In the Kanuku block, operated by Repsol, the Carapa-1 well drilled in a water depth of 80 metres discovered four metres of net oil pay containing good quality low sulphur oil, but in poorly developed reservoirs of Cretaceous age. The Carapa-1 well confirmed the extension of the prolific lighter oil hydrocarbon play in the Stabroek Block which is adjacent to Tullow’s acreage.

Reviewing the results, Tullow said, “The Joe and Jethro discoveries in Guyana were ultimately disappointing with lower oil quality discovered than originally prognosed, and investors were frustrated…”

In 2020, Tullow drilled one exploration well in Peru, which did not make a commercial discovery. In light of this, the operator said, “We will also be drilling in Suriname as well as thinking carefully about how to proceed in Guyana.”

The next steps in Guyana will be to integrate the three well results into updated geological and geophysical models, with a focus on the high-grading of the Cretaceous portfolio where better quality oil is expected across both the Kanuku and Orinduik blocks

For 2019, the total exploration cost write-offs for Tullow was €$1.3B, up from €$295 million in 2018. This was predominantly driven by a write-down of the value of its assets in Kenya and Uganda due to a reduction in the Group’s long-term accounting oil price assumption from US$75/bbl to US$65/bbl. The remaining write-offs include Jethro, Joe and Carapa well costs in Guyana as a result of drilling results and Kenya’s Block 12A, 12B and 10BA, Mauritania’s C3, PEL37 in Namibia and its Jamaica licence due to the levels of planned future activity or licence exits.

Tullow plans no further drilling in Guyana in 2020

March 23, 2020

The company had fully written off its oil exploration licence for the Walton-Morant Basin offshore Jamaica, on which it has taken a US$36 million hit. The three wells here were listed as write-offs but Tullow continues to assess the Guyana operations. Tullow’s partners here include France’s Total, with a 25 per cent stake, and Eco Atlantic,listed in the UK and Canada, owning 15 per cent. The remaining 60 per cent is held by Tullow.

Threat of Tullow collapse looms

The failure of multiple projects in Africa and depressed oil prices puts the company in ‘significant doubt’.   Last year was harrowing for Irish independent Tullow Oil. Production downgrades, disappointing exploration results offshore Guyana and delays to key African projects triggered a share price collapse of more than 70pc. Full-year results show market concerns were fully justified. Tullow posted a $1.7bn after-tax loss in 2019, partly from reduced output at the Jubilee and TEN fields in Ghana. These problems were compounded by failure to make progress on crucial projects in Kenya and Uganda. Assets in both countries contributed towards a write-off charge of $1.25bn. Tullow looks unlikely to recover in 2020 after the collapse of the Opec+ alliance and the growing threat of Covid-19.

Stabroek Block contract allows ExxonMobil to weather storm

Mar 22, 2020 Stabroek Block Production Sharing Agreement (PSA) will leave ExxonMobil and its partners with good outcomes in the volatile oil market where ExxonMobil is making budget cuts in the face of the coronavirus.

Changes to CapEx (Capital Expenditure), will ensure its Stabroek Block operations, the crown jewel of its portfolio, is preserved. Chief Executive Officer (CEO), Darren Woods, will disclose the details of these cuts soon. Partner on the Guyana license, Hess Corporation’ CEO, John Hess, announced that the company shaved US$800M from its budget so that it can preserve its “great investment opportunity in Guyana”. On March 16, the company entered into a US$1 billion three-year term loan agreement with JPMorgan Chase Bank, N.A.

Financial maneuverings by the two American oil giants for Guyana investment would not result in a loss. The 2016 PSA allows them to recoup all financing costs as well as the interest taken on loans to support operations. “Interests, expenses and related fees incurred on loans raised by the parties comprising the Contractor for petroleum operations and other financing costs provided that such expenses, fees and costs are consistent with market rates” are recoverable without need for approval by the Minister.

Both ExxonMobil and Hess are satisfied that their investment has yielded 16 strikes to date. John Hess said that the string of successful discoveries Guyana has seen is “world class” as it works out to about 500 million barrels of oil per discovery. He praised the Stabroek Block for very low cost development while delivering high returns for investors.

The Liza field offers “high financial returns and more rapid cash paybacks since it carries the lowest development costs of all the major global offshore projects.” Hess Executives are pleased about the company becoming a free cash flow engine for shareholders by 2022 thanks to its 30 percent stake in Guyana’s Stabroek Block.

Despite budget cuts Hess and Exxon are pursuing a fourth development project on the Stabroek Block at the Hammerhead well which will deliver production of 150,000 to 190,000 barrels of heavy oil per day.
This was revealed in project details subsidiary Esso Exploration and Production Guyana Limited (EEPGL), recently submitted to the Environmental Protection Agency (EPA).
Hammerhead is located in the eastern portion of the Stabroek Block approximately 160km from Georgetown. The project is expected to last for 20 years and 26 to 30 wells will be drilled to extract the oil . Each well will be drilled to some 3500 to 5300 metres below sea level.

EEPGL will install some oil production facilities on the sea floor at approximately 800 to 1500 metres water depth. Subsea facilities allow oil from wells to be gathered and moved to the surface for further processing.
EEPGL will use a Floating Production Storage and Offloading Vessel (FPSO) which will have the capacity to produce up to an average of 4,500,000 to 5,200,000 barrels of crude oil per month. The operator noted that these estimates are preliminary and are subject to change.

Approximately every seven to eight days, oil will be pumped from the FPSO to a conventional tanker owned and/or operated by others. The tanker will then bring the oil to buyers.

At peak, EEPGL will utilize approximately 1200 personnel offshore during the stage where wells are being drilled and the offshore oil production facilities are being installed. This number will decrease to 200 personnel during the production operations phase. A smaller number of personnel will be utilized at the onshore support facilities.

Exxon will be adding close to 1 million barrels/day in production with a $25/barrel breakeven. The company has a 45% stake in the field although, as other partners like Hess Corporation (NYSE:HES) need cash, it can increase that. At current prices of $30/barrel Brent, that means $820 million in annual profit from this field alone.

China National Offshore Oil Corp (CNOOC) will trim annual investment by 10% to 15% in 2020, while maintaining its goal of increasing domestic crude oil and natural gas production for the year following a major oil discovery in Bohai Bay. Exxon may eventually buy the SOC share as PRC responds to the Covid-19 impact and low oil price.

CNOOC to load first oil cargo

March 20, 2020

(Reuters) – CNOOC Ltd is scheduled to load its first cargo of crude from Guyana’s offshore Liza oil project. The SOC has a 25% stake in the massive Stabroek block in a consortium with operator Exxon Mobil Corp and U.S. firm Hess Corp. The companies began production in December and discovered more than 8 billion barrels of recoverable resources, which could transform Guyana’s economy.

The New Melody tanker is expected to load up to 1 million barrels of sweet, light Liza crude for CNOOC when it arrives at the consortium’s floating production, storage and offloading platform (FPSO) – some 190 kilometers (118 miles) off Guyana’s coast – around March 24, according to Refinitiv Eikon data.The very large crude carrier (VLCC), with a capacity of around 2 million barrels, departed Colombia’s Covenas port after loading around 1.1 million barrels. The tanker’s destination is yet unclear. The New Melody had approached the FPSO earlier this month but left without loading due to a change in the loading window.

Since this is a VLCC, she picked up some cargo and on her way back… she will collect the remainder of her cargo.

The New Melody will be the fifth tanker to load Guyanese crude. Exxon, which has a 45% stake in the Stabroek block, has taken two cargoes of some 1 million barrels each, while the government – which awarded Royal Dutch Shell a tender to sell the first three cargoes it is entitled to receive– has taken two cargoes.

Exxon 5-year plan signals high priority for oil recovery pursuits

March 20, 2020

Continued focus by the US super major, ExxonMobil, on further developing oil production offshore Guyana is one of the priority pursuits of the company’s immediate-term investment plans, against the backdrop of its recent disclosure of plans to sustain capital expenditure levels of between US$30 billion and US$35 billion through to 2025.The disclosure by Exxon Chairman and Chief Executive Officer, Darren Woods, strongly suggests that Guyana will be assured of high priority among ExxonMobil’s oil & gas recovery pursuits, at least for the next five years.

Exxon’s disclosure of its likely short to medium-term spending came notwithstanding the roughly 25 per cent fall in oil prices this year and comes against the backdrop of few other oil companies willing to commit to ramping up spending in the period ahead.

ExxonMobil may rethink its 2020 spending strategy amid contagion

March 20, 2020

Even after having made it clear that its multi-billion dollar budget for the next five years takes high-priority based on its ongoing oil recovery operations offshore Guyana, US titan ExxonMobil is seemingly reviewing its operating strategy, going forward, on account of the raging coronavirus pandemic menacing key sections of the global economy.

Chairman and CEO Darren Woods projected US$35 billion investment in operations through to 2025, However, after evaluation of the pandemic and particularly its impact on the global oil industry, he later asserted that the months ahead may prove to be a “make or break” period as it cuts capital spending plans and shifts some employees to home offices.

Oil resources now confirmed

Focus on Guyana shifts to socio-political environment for prosperity

March 20, 2020

Forecasts of the direction of the Guyana petroleum industry and the time it will take to leave a significant footprint on the sector comparable to some members of the Organization of Petroleum Exporting Countries (OPEC) continue even as ExxonMobil continues to ramp up oil production levels. Online oil and gas Information and Resource Centre in the local petroleum sector, quoting the Washington-based public policy and resource organization, American Security Project (ASP), reported that current estimates over the next ten years for Guyana’s oil production of 750,000 barrels per day may be an underestimation. As most of the reserves appear to be “light sweet crude” earnings may exceed current analyses .

Lankhorst Mooring Lines for Liza Unity FPSO

Mooring specialist Lankhorst Offshore has secured a contract by SBM Offshore to supply the deepwater mooring lines for the Liza Unity Floating Production Storage and Offloading (FPSO) for ExxonMobil’s Liza field offshore Guyana. This follows the deployment of Lankhorst mooring lines for the Liza Destiny FPSO mooring system also in the Liza field.

The Liza Unity FPSO will be spread moored at a water depth of 1600 meters with 20 Cabral 512 deepwater mooring lines with a minimum breaking strength of 12,300 kN. Each mooring line measures 2,320 meters in length, totaling 46,400 meters. The ABS class approved Cabral 512 rope construction features a specially designed filter, preventing ingress of sand while the mooring lines are pre-laid on the seabed ahead of the Liza Unity FPSO arriving on station.

The Liza Unity is based on SBM Offshore’s Fast4Ward FPSO design. For these two Liza FPSOs, Lankhorst Offshore has developed a ‘standardised’ deepwater mooring model to reduce lead times. The Liza Unity mooring lines will reuse the 16 shipping reels returned from the Liza Destiny mooring.

“We fully support SBM Offshore’s Fast4Ward FPSO design approach. By introducing a standardized manufacturing model combined with reusable shipping reels, we too are playing our part in reducing the capital costs of deepwater mooring and increasing sustainability,” said Neil Schulz, sales director Lankhorst Offshore.

The Cabral 512 ropes will be manufactured at Lankhorst Offshore’s factory, dedicated to the production of offshore mooring systems, in Viana do Castelo, Portugal. March 19, 2020

Hess, ExxonMobil respond to market developments

Mar 17th, 2020 Texas

More oil companies responded to the current market price volatility.

Hess will implement an $800-million reduction in its capital and exploratory budget for 2020, down to $2.2 billion.

At the same time, the company has secured a new $1-billion three-year term loan agreement which should strengthen the company’s cash position and financial liquidity.

CEO John Hess said: “With 80% of our oil production hedged in 2020, our significantly reduced capital and exploratory budget and our new three-year loan agreement, our company is well positioned for this low-price environment.

“Our focus is on preserving cash and protecting our world class investment opportunity in Guyana.”  The company plans to defer most of its discretionary exploration and offshore drilling activities, excluding Guyana.

ExxonMobil said it was looking to significantly reduce its own spending.

“Based on this unprecedented environment, we are evaluating all appropriate steps to significantly reduce capital and operating expenses in the near term,” said Chairman and CEO Darren Woods. “We will outline plans when they are finalized.”

He pointed out that the company had come through various market downturns throughout its history and had experience operating in a sustained low-price environment.

“We remain focused on being a safe, low-cost operator and creating long-term value for shareholders,” he added.

The company is monitoring the spread of COVID-19 and has adjusted working arrangements accordingly for staff and support communities where it operates.

“We are confident that we will manage through these challenging times by taking deliberate action to keep our people safe, our environment protected, and our company strong,” Woods said.

03/17/2020

Hess cuts CAPEX and exploration budget : focus on Guyana

Hess Corporation announced a revised $2.2 billion capital and exploratory budget for 2020, an $800 million reduction from the previous budget of $3.0 billion. The company also announced a new $1.0 billion three-year term loan agreement. These actions further strengthen the company’s cash position and financial liquidity in response to the sharp decline in oil prices.

“With 80% of our oil production hedged in 2020, our significantly reduced capital and exploratory budget and our new three-year loan agreement, our company is well positioned for this low-price environment,” CEO John Hess said. “Our focus is on preserving cash and protecting our world-class investment opportunity in Guyana.”

The reductions to the company’s 2020 capital budget will be primarily achieved by shifting from a six-rig program to one rig in the Bakken, which is expected to be completed by the end of May. Most discretionary exploration and offshore drilling activities, excluding Guyana, will also be deferred.

On March 16, 2020, the company entered into a $1.0 billion three-year term loan agreement with JPMorgan Chase Bank, N.A. The term loan contains provisions that require the company to reduce JPMorgan’s initial funded amount, which the company intends to do by syndicating the loan to other banks.

In 2020, approximately 80% of the company’s oil production is hedged by put options, with 130,000 barrels a day at $55 per barrel West Texas Intermediate put options and 20,000 barrels a day at $60 per barrel Brent put options. The company entered 2020 with over $1.5 billion in cash and cash equivalents on its balance sheet and has a $3.5 billion undrawn revolving credit facility and no material debt maturities until 2027.

Net production for 2020 is now forecast to average between 325,000 and 330,000 boepd, excluding Libya, versus previous guidance of between 330,000 and 335,000 boepd. Bakken net production is forecast to average approximately 175,000 boepd in 2020, versus previous guidance of approximately 180,000 boepd.

ExxonMobil Evaluating Significant Near-Term Capital and Operating Expense Reductions

Public Company Information:  NYSE:XOM

IRVING, Texas–(BUSINESS WIRE)–ExxonMobil is looking to significantly reduce spending as a result of market conditions caused by the COVID-19 pandemic and commodity price decreases, the company said today.

“Based on this unprecedented environment, we are evaluating all appropriate steps to significantly reduce capital and operating expenses in the near term,” said Darren Woods, chairman and chief executive officer of Exxon Mobil Corporation. “We will outline plans when they are finalized.”

Woods said that ExxonMobil has faced numerous market downturns throughout its long history and has experience operating in a sustained low-price environment. “We remain focused on being a safe, low-cost operator and creating long-term value for shareholders,” said Woods.

The company is closely monitoring the COVID-19 pandemic and has adjusted work arrangements to ensure a healthy work environment and support communities where we operate.

Woods stressed the company will maintain its ongoing commitment to safety and environmental performance.

“We are confident that we will manage through these challenging times by taking deliberate action to keep our people safe, our environment protected and our company strong,” said Woods.

 

Dealmaker pushes back against environmentalists’ lobby – Guyana not likely to ‘tie bundle’ with lobbyists

March 13, 2020

Replying to increasing criticism levelled at the global petroleum sector in response to the linkage between fossil fuels and what the global environmental lobby says continues to be an alarmingly degraded environment, a high profile associate in SCF Partners, a US-based energy service company, sought to mount a pushback against the “demonizing of oil and gas,” contending that it could take up to three decades for alternatives to be developed to replace the product.

A report in Oil Industry News, a high profile oil & gas news source, quotes Colin Welch, a North Sea dealmaker, as saying that while hyped-up environmentalists continue to rail against oil and gas, the reality is that we will have no option but to continue to rely on those products as critical sources of energy for years to come.

Wärtsilä signs EPC contract for dual-fuel power plant
Wärtsilä signs EPC contract for dual-fuel power plant in Guyana

Guyana Power and Light (GPL) awarded Wärtsilä an Engineering, Procurement and Construction (EPC) contract for a dual-fuel power plant at the Garden of Eden Generating Complex. e Wärtsilä 34DF engines will initially run on liquid fuel, and on natural gas when that fuel becomes available.

Wärtsilä to build Guyana’s dual-fueled power plant.

Oil exploration activities offshore Guyana have resulted in significant finds of crude oil and associated gas. The potential utilization of natural gas led GPL to make the strategic decision to opt for dual-fuel fired generating units, able to operate on both natural gas and liquid fuels.

The new power plant will, therefore, operate on five Wärtsilä 34DF dual-fuel engines that will initially run on liquid fuel, and on natural gas when that fuel becomes available.

Wärtsilä will also supply a 69 kV sub-station to be integrated within the existing Garden of Eden sub-station. The Wärtsilä plant is being delivered on a fast-track basis and is scheduled to be completed in mid-2020.

Heading for “untold riches?”

Royalty, tax revenue from oil could rake in US$13B a year by 2029

March 13, 2020

Despite the recent collapse in oil prices and a dim medium-term outlook, knowledgeable international industry analysts are employing superlatives to quantify the extent of Guyana’s oil reserves and potential wealth.They urge Guyana not to look a gift horse in the mouth by choosing the same counterproductive road taken by other underdeveloped countries that failed to make the most of the oil wealth with which they had been blessed.
The latest such assessment of the extent of the country’s oil riches and the possibilities that repose therein has come from the UK-based global energy consulting group, Wood Mackenzie, which says that its analysis “models almost six billion barrels of oil in Guyana’s oil fields and sets a time line of 2028 for the lifting of output to over 1.1 million barrels per day. At that point Guyana will be elevated to the position of being just the eleventh country in the history of oil recovery to reach the 1 million barrel-per-day milestone.

Guyana can anticipate “untold riches” from its giant oilfields. “The giant oil fields will deliver untold riches to this nation of only 0.8 million people,” Wood Mackenzie declares. As output builds, Guyana will rise to be king of the heap. Production per capita will eclipse even that of the leading Middle East producers, Kuwait, UAE and Saudi Arabia. A significant bonus has to do with the fact that the “mostly light” crude meets “the market’s increasing need for relatively low-carbon-intensity liquids. They are also low cost – the breakeven of under US$30/barrel (NPV10) competes with the very best new projects, conventional or unconventional.

According to Law Insider, NPV10 means with respect to any Proved Reserves as expected to be produced from the properties of the Corporation, the net present value of the future net revenues expected to accrue to the Corporation’s interests in such Reserves during the remaining expected economic lives of such Reserves, discounted at 10% per annum.

All of this amounts to no more than an objective perspective of where oil reserves can take the 83,000-square mile republic. Mindful of examples of other developing countries, notably in Africa, which fell flat on their faces, oil wealth notwithstanding, Wood Mackenzie says that given the likelihood that Guyana may well be “the last new major oil-producing country,” what is important now is that critical lessons are learned from those who have gone before. “There’s a long list of developing countries, including some in Latin America, which have struck black gold and failed to make the most of it,” Wood Mackenzie reminds.

Even so, the UK analysts are optimistic about the prospects of Guyana ‘getting it right.’ The economy will be transformed as annual capital expenditure on the project will average US$4 billion a year this decade – the same as the 2019 GDP. “Much will be spent on production equipment outside Guyana, but considerable investment will flow into infrastructure onshore and offshore to support the growing oil industry.” Prospects for immediate positive change are good given that, according to its calculations, “revenue from royalty and tax starts flowing this year and climbs progressively to an annual peak of US$13 billion by 2029.” Annual tax income will average US$7 billion over the next 20 years – almost double 2019 GDP. After averaging 2.9% annually this century, Wood Mackenzie forecasts a 78% rise in 2020; adding more to GDP in one year than the economy accumulated since 1960. Extending its optimism beyond its predictions, Wood Mackenzie says that, in time, revenue from the country’s oil & gas industry may be even greater than its analysis suggests. “There’s no sign that success with the drill bit is waning and there are plenty of exploration wells to be drilled.” Its fiscal estimates “exclude 2 billion barrels of discovered gas and condensate reserves for which there is no plan yet for commercialization.”

Significant dent in first year of revenues from Liza 1 project

Mar 10, 2020

Guyana has been an oil producer for a little over two months and already has a brutal taste of volatility in the industry which led to a significant cut to the US$300M it was projected to collect this year from the Stabroek Block’s Liza Phase One Project.

Attorney-at-Law Charles Ramson Jr. said that the crisis in the oil market could reduce the first year of revenues byover US$200M.
Market tremors are due to two interrelated factors—fears over the coronavirus and an oil price war between Russia and Saudi Arabia.
The most dramatic decline in oil prices since the financial crisis in 2008 was deemed by some international analysts “Black Monday.” Because of the coronavirus, oil prices as high as US$69 a barrel in early January declined to about US$50-US$45 a barrel. That state of affairs worsened following an ugly oil price war.

Russia refused a proposal at a meeting in Vienna by the Organization of the Petroleum Exporting Countries (OPEC) to curtail production to support prices which were declining due to fears over the coronavirus.  In response to Russia’s refusal, Saudi Arabia slashed its selling price for crude by US$6 to US$8 in an effort to retake market share and heap pressure on Russia. International analysts commented that Saudi Arabia is “rolling up its sleeves for a price war.”

The net effect of Saudi’s actions led to prices dropping to US$34 a barrel . (See link for more details: https://edition.cnn.com/2020/03/08/investing/oil-prices-crash-opec-russia-saudi-arabia/index.html).

With a possible oil war unraveling before the world, US Investment Bank and Financial Services Company, Goldman Sachs said that the market should brace itself for a real possibility of oil prices dropping by 43 percent to US$20 a barre.

Ramson pointed out that when Guyana calculated its take from the Liza project, calculations were using the US$55 a barrel oil price. The fiscal take which includes a two percent royalty and a 50 percent take of the profit oil changes drastically, given the global circumstances.

Ramson said, “…If you were to do any kind of calculations now about what Guyana should expect for its oil for year one and year two etc., it shifts dramatically downwards, so instead of receiving US$300M, we will only receive US$9M to US$11M, which means that the first shipment of oil we were able to sell, whatever we were able to get as a result of that we were quite lucky, as it was a high price at the time but Guyana will not get that US$300M it expected…”

Ramping up production to 120,000 barrel of oil per day, based on his calculations, it would take Guyana five years to rake in the estimated US$300M and even then, it would not be guaranteed if the price continues downwards. The oil market crisis will also affect the pace of cost recovery. The estimated revenue from the Stabroek Block project would be significantly less, thereby increasing the timeframe for which ExxonMobil has to recover its investments, estimated to be over US$3.5B for the Liza Phase One Project.