GEORGETOWN, Guyana (CMC) — The US-based oil company, ExxonMobil, said it will be investing five billion US dollars as it prepares to explore oil production in Guyana by 2020.

ExxonMobil Country Manager, Jeff Simon, told a meeting on Thursday that its local affiliate Esso Exploration and Production Guyana Limited (EEPGL) has applied for a production licence and has contracted a Floating Production Storage and Offloading (FPSO) from SMB Offshore, a large company that specialises in tanker and FPSO construction.

The FPSO is a specialised vessel that will extract the oil from under the sea and store it until it is later moved to a refinery or sold on the world market. The FPSO will have an oil production capacity of 100,000 barrels per day.

Simon told the meeting called by the Ministry of Natural Resources that the vessel will separate the gas and water from the oil. While the oil will be stored on board, the gas and water will be re-injected into the reservoir. Exxon is expected to drill about 17 wells to extract the oil which is said to be equivalent to between 0.8 to 1.4 billion barrels of oil.

“The way we install a lot of the stuff on sea floor… is with some specialised equipment. There are not a lot of these kinds of vessels around the world,” Simon said, adding that the performance of the Liza wells has “has given us some additional confidence… to go forward in the development.”

ExxonMobil acquired its exploration permits since 1999, but it wasn’t until 2014 that the company began drilling explorations.

Simon said the company actually lost its partner back then which was another major oil company, because it was too risky.

ExxonMobil soon partnered with Hess Corp and Nexen but Simon explained that the exploration was still “a risky play”.  The oil companies had a one in five chance of success, but that was struck in 2016.

“2015 was Liza 1, but it wasn’t until Liza 2 was drilled in 2016 that we actually had enough confidence in the accumulation to say that yes we have something to go forward in the development,” Simon said.

The oil that is being primed for production is in the Liza field which is within the 6.6 million acres Stabroek Block located offshore Guyana.

The country manager cautioned however, that the offshore production will not require a large workforce.

“I think the key things here are that that facility out there and all that equipment is really high-tech, highly instrumented and it is run basically with 60 to 80 people out on that ship and that’s two ships of people out there, so it’s not a people intensive operation for the actual oil production and operations,” Simon said, assuring that Exxon will be utilising local content to supply the offshore production.  “A lot of the supply of those equipment and materials will be coming from Georgetown: food, fuel and other materials,” Simon said.

To date, Exxon has invested a total of US$800 million in exploring the Stabroek Block offshore Guyana.

Meanwhile, Natural Resources Minister, Raphael Trotman, will table the Petroleum Commission Bill in the National Assembly soon. The Bill will outline the regulations that will govern the newly established Petroleum Commission.

The establishment of a new regulatory agency will see the responsibility taken from the Guyana Geology and Mines Commission (GGMC).

“We need to re-orient our minds towards petroleum which is a completely different form of mining, and so the idea is that we would move in tandem with the rest of the world, and have a separate regulatory agency,” Trotman said.

Trotman said the Bill has already been extensively shared with stakeholders including the Opposition.  He said that the Ministry of Natural Resources has been “working overtime” to create and upgrade legislation to govern the emerging oil and gas sector.

In December, the Commonwealth Secretariat drafted a Sovereign Wealth Fund Bill for the country. Trotman said that the Bill is now with the Minister of Finance since “it is a financial matter”.