Home' Trinidad and Tobago Guardian : February 9th 2017 Contents BG8 | ENERGY
BUSINESS GUARDIAN guardian.co.tt FEBRUARY 9 • 2017
Exxon Mobil's giant Liza discov-
ery will have an average pro-
duction of 100,000 barrels of
oil per day (bo/d) when it be-
gins flowing in 2020, accord-
ing to the company's country
manager Jeff Simons. It also expects to pro-
duce 165mmscf/d of natural gas which will
be mainly used for reinjection into the wells.
This will make the South American country
the largest producer of crude oil in Caricom---
surpassing T&T's 70,000 bo/d---but not the
largest energy producer in the region because
this country's production of 3.5 bbscf/d of
natural gas. As a result, T&T remains, by
far, the largest energy producer in the region.
Speaking at last month's Energy Confer-
ence, hosted by the Energy Chamber, Simons
said Exxon Mobil will use a floating produc-
tion, storage and offloading (FPSO) unit to
produce the oil and would then be exporting it.
He raised the possibility of it being refined at
Petrotrin's Pointe-a-Pierre refinery in south
He told delegates that the company planned
to drill 17 production wells with subsea tie
backs to the FPSO and that Exxon Mobil
was confident it could meet the early start-
up deadline because of its use of cutting edge
Simons said no decision had as yet been
taken on whether Exxon would use one or
two drill ships during the development stage.
This would be disappointing news for T&T
as there will not be any platforms put in place
and therefore no need for construction to take
place at the Tofco facility at La Brea.
Simons noted that Exxon has always been
committed to the maximum use of local con-
tent but admitted that during production very
few jobs will be created in Guyana because only
60 people will be required for the production
of the oil.
Exxon Mobil's country manager said the
company had to use Trinidad and its services
during the exploration phase due to its rela-
tively close proximity, its long history in oil
and gas and its capacity to service the industry.
Asked if he thought the company's produc-
tion out of the Stabroek Block could increase
with additional discoveries in the offing, Si-
mons was careful to point out there was no
certainty in exploration and pointed to the
Skipjack prospect which, he said, was a ge-
ological lookalike to Liza and turned up a dry
"Before drilling Liza, our partner, left us and
we were looking for a new partner because
we were not prepared to take the risk alone.
Luckily, we got Hess and Nexen and luckily
we drilled Liza 1 before we drilled Shipjack.
So I hope we will find more oil but I can only
speak to what we know is there," Simons told
Last month Exxon Mobil and its partners
announced its Payara-1 well offshore Guyana
as its second discovery on the Stabroek Block.
It was drilled in a new reservoir. The Payara-1
well targeted similar-aged reservoirs that were
proven successful in the Liza discovery.
The well was drilled by ExxonMobil affili-
ate Esso Exploration and Production Guyana
Ltd, and encountered more than 95 feet of
high-quality, oil-bearing sandstone reser-
voirs. It was drilled to 18,080 feet in 6,660
feet of water. The Payara field discovery is
about 10 miles (16 km) northwest of the Liza
Exxon also announced that in addition to the
Payara discovery, appraisal drilling at Liza-3
identified an additional high-quality, deeper
reservoir directly below the Liza field, which is
estimated to contain between 100-150 million
barrels of oil equivalent.
The Liza 1 well encountered more than 295 ft
of high-quality, oil-bearing sandstone in May
2015. With the second well on the block, Liza
2, the company confirmed the finding as sig-
nificant with a potential recoverable resource
of 800 mm to 1.4 Bboe of high-quality oil.
Esso Exploration and Production Guyana
Ltd is operator and holds 45 per cent interest in
the Stabroek Block. Hess Guyana Exploration
Ltd holds 30 per cent interest and CNOOC
Nexen Petroleum Guyana Ltd holds 25 per
BP profits show signs of recovery
Oil giant BP saw profits double
in the last three months of
2016 on the back of slightly
higher oil prices and more
cost profit---the company's preferred meas-
ure---was US$400m, up from US$196m a year
BP took another charge of US$799m for the
Deepwater Horizon disaster, bringing total
charges to US$62.6bn.
"2016 was the year we made significant
strides" for future growth, said chief execu-
tive Bob Dudley.
He added: "We start this year with consid-
erable momentum and a sense of disciplined
ambition. We have laid the foundations for BP
to be back to growth."
For the year as a whole, underlying replace-
ment cost profit---which strips out fluctuations
in the value of oil stocks---fell to US$2.58bn
(£2.08bn), down from US$5.90bn in 2015.
The profit figures were, however, below some
analysts' forecasts, and BP shares fell two per
cent at the start of trading in London.
If BP group chief executive Bob Dudley was
paid £14m for delivering a US$6.5bn (£5.3bn)
loss last year, what on earth will he get paid for
delivering a profit in 2017?
The answer to this will shed a lot of light
on the politically current and intense debate
around executive pay.
A year ago, Dudley became the unwilling
poster boy for angry shareholders when, at
the BP annual general meeting, 59 per cent of
shareholders voted against his £14m pay award.
He got the money anyway because the vote
was not binding, so the board did not have to
do what the owners of the company wanted.
Under rules introduced by the coalition gov-
ernment and championed by then Business
Secretary Vince Cable, shareholders can only
reject a pay packet or the formula by which it
is calculated every three years.
That measure gave them more control than
they had previously enjoyed but it clearly did
not work or go far enough.
In 2015, BP posted the company's biggest
loss in at least 20 years, ravaged by Gulf of
Mexico spill costs and tumbling oil prices,
which caused the group to axe jobs and cut
But Mr Dudley said that the costs and lia-
bilities from the fatal Deepwater Horizon oil
platform disaster were "now substantially
behind us. BP is fully focused on the future."
BP said it would balance its books at an oil
price of around US$60 per barrel by the end
of the year. Oil companies have been selling
assets and cutting costs to adjust to lower pric-
es. Brent crude, the international benchmark,
averaged US$44 a barrel last year, the lowest
in 12 years.
Full-year capital expenditure is now expect-
ed at the higher end of BP's previous guidance
of US$16-17bn, a possible sign that the com-
pany feels that crude oil prices are starting to
The group has been making acquisitions re-
cently, snapping up Australian petrol stations
at the end of last year, striking a deal to take a 10
per cent stake in Abu Dhabi Company; giving
it access to the emirate's largest oilfields, and
taking a stake in exploration areas off the coast
of Mauritania and Senegal.
BP held the quarterly dividend at 10 cents,
which equates to an annual yield of seven per
cent. Given the size of BP, the payout is watched
closely by investors.
Laith Khalaf, senior analyst at Hargreaves
Lansdown, said: "One worrying aspect of the
dividend is the colossal amount being paid out
in shares rather than cash, which increases the
number of mouths to feed next time a payment
"BP issued US$2.9bn of shares in lieu of div-
idends in 2016; shares which if listed separately
would form a company at the top end of the
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