SBM proceeding with Liza FPSO conversion

MONACO – ExxonMobil has formally confirmed the award of contracts for the next phase of the deepwater Liza field development off Guyana.

SBM Offshore will construct, install, lease and operate an FPSO for the development, following completion of front-end engineering studies and the final investment decision on the project by ExxonMobil and partners Hess and CNOOC Nexen Petroleum Guyana.

Liza is in the 27,000-sq km (10,425-sq mi) Stabroek block, 200 km (124 mi) offshore Guyana.

The FPSO is designed to produce up to 120,000 b/d of oil, with associated gas treatment capacity of 170 MMcf/d and water injection capacity of 200,000 b/d.

The vessel – a converted VLCC – will be spread moored in 1,525 m (5,003 ft) of water and will be able to store 1.6 MMbbl of crude oil.

Pablo Medina, Wood Mackenzie’s senior analyst, Upstream, Latin America, said the short period between the field’s discovery and the final investment decision (FID) signals the project’s competitiveness.

Liza, in combination with the nearby Payara discovery, has a breakeven of $46/bbl, he added, underlining its attractive position compared to other leading investment opportunities such as tight oil or deepwater Brazil.

Very few deepwater projects have got through FID during the oil price downturn, he pointed out.

Wood Mackenzie expects the full development of Liza-Payara to generate over 330,000 b/d of oil at peak, with reserves of more than 1.5 Bboe.

Exploration in the area has also led to the discovery of almost 3 tcf of associated gas, and the full development solution will need to address the challenge of gas monetization, due to the remoteness from the coast and the lack of a gas market in Guyana.

However, the analysts expect the two fields to deliver 330,000 b/d within 10 years.