March 27, 2017

Exxon Mobil applies for Production License of Oil in Guyana

oilAmerican oil giant Exxon Mobil Corp. has asked Guyana’s government for a production license to let it start pumping oil from the seabed by late 2019, though company officials have said operations are likely to start in 2020, according to an AP report.

Guyana Geology and Mines Commissioner, Newell Dennison on Wednesday confirmed the application, saying it would be the first time the small South American country has issued an oil and gas license.

Exxon Mobil said last year that exploratory wells off Guyana discovered a “world-class” reservoir that could hold up to 1.4 billion barrels of oil.

The discoveries add to a maritime rights dispute with Venezuela, which also claims the area where they are located. The UN has given both nations until year’s end to solve the dispute.

According to AP, Dennison said the company has also submitted its general production plan alongside its application for a production permit. The firm has so far drilled five wells and is currently completing work on a sixth. Only one has come up dry so far.

“I can confirm that they have applied for the permit,” said Dennison, who indicated it would allow operations by late 2019.

Exxon Mobil announced on March 1 that “Guyana startup is expected by 2020, less than five years after the initial discovery well – a rare occurrence in the industry in terms of development time.”

Natural Resources Minister Raphael Trotman has said that government is planning to contract international firms to help it in negotiations with Exxon Mobil because the country has no expertise in this area. He did not identify any of the firms.

Guyana’s parliament is planning to update legislation to cover issues including oil production and potential spills.