ExxonMobil won’t stop production in Guyana

Plummeting demand for oil as a result of the Coronavirus (COVID-19) pandemic and an oil price war are expected to see Guyana earning less than the US$300 million it had expected to rake in annually from the Liza Phase 1 project and force ExxonMobil to push back developing other oil reservoirs, an analyst said.

ExxonMobil spokeswoman in Guyana, Janelle Persaud said Thursday that “we have no new updates at this time.”

Senior Analyst at the Norway-headquartered Rystad Energy, Aditya Ravi told Demerara Waves Online News/News-Talk Radio Guyana 103.1 FM that Guyana was now expected to earn US$160 million to US$190 million annually from Liza 1. “That will take a hit in the current price environment,” he said.

He added that Guyana was expected to earn less from oil during 2021 and 2022 before prices recover in 2023. “By the time, they are back in 2023 we do not see any sort of significant change in what Guyana makes from the Stabroek Block,” he said.

He said that although ExxonMobil’s breakeven price is US$30 to US$40 per barrel, the company would not stop oil production in Guyana. “Given the FPSO (floating production, storage and offloading vessel) is leased which accounts for almost 30-40% of the overall production costs, we do not see Exxon turning off the taps, provided there are available export tankers in this oversupplied market,” he said.

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