(Bloomberg) -- Exxon Mobil Corp. started drilling development wells off the coast of Guyana as the oil major gears up for first production from one of its five major global projects by 2020.
The Liza Phase 1 project involves drilling 17 wells in Guyana’s Stabroek block and will be the first part of a plan to ramp up production from the tiny South American country to more than 500,000 barrels of oil a day, Irving, Texas-based Exxon said today in a statement. That would amount to about 12.5 percent of Exxon’s current daily production.
Exxon will convert an oil tanker into a floating, production, storage and offloading vessel along with four undersea drill centers, it said. That will have capacity for 120,000 barrels of oil a day and will be followed by two more as production rises from 2020 to 2027.
Guyana is home to the world’s biggest new deepwater oil play following a series of major discoveries since 2015. Exxon has been keen to push development of the country’s reserves as it has faced stalling production over the past five years. The speed of Exxon’s plan has sparked concern that Guyana’s government doesn’t have the necessary regulatory or royalty mechanisms in place to support drilling on a large scale.
Exxon said Guyana is expected to generate more than $7 billion over the life of the Liza Phase 1 project.
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