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ExxonMobil, Hess to export first oil from Guyana in early 2020

December 13/2019

MOSCOW (MRC) -- US producers ExxonMobil Corp and Hess Corp plan to export the first-ever shipments of crude oil from Guyana between January and February, a milestone for Latin Americas newest oil producer, reported Reuters with reference to sources with knowledge of the plans.

A consortium including both companies and a unit of Chinas CNOOC Ltd have so far discovered more than 6 billion barrels of recoverable oil and gas resources off Guyanas coast, which could eventually produce 750,000 barrels per day (bpd) for a country that has no history of crude output.

Those finds are turning Guyana, an impoverished nation bordering longtime producers Venezuela and Brazil, into a hot property for oil investment.

Exxons Guyana spokeswoman last week told Reuters that "key activities" on its giant Stabroek block, including early production, were running ahead of schedule. He said that coming weeks would be critical as progress could be impacted by weather and other factors.

The US company did not provide additional details. Hess declined to comment. CNOOC and Guyanas government were not immediately available for comment.

Liza will be the first Guyanese crude grade produced and offered to the oil market. It has 32 API degrees of density and 0.5 percent of sulfur content, according to Exxons assay seen by Reuters.

Exxon is planning on shipping two 1-million-barrel cargoes of Liza crude in January, to be followed by similarly sized shipments from Hess and Guyanas government in February.

Exxon plans to process the oil at its refineries, while Hess could offer it for spot sales. CNOOC, which has not yet scheduled exports, would ship it to China, whose refiners like using similar medium sweet grades, the sources said.

Interested buyers are exploring options to co-load Liza crude with other South American crudes bound for Asia, mainly Brazilian grades. Starting in March, very large crude carriers (VLCCs) could lift up to 2 million barrels each, depending on weather conditions, the sources added.

"We are expecting Liza to be traded at USD4-USD6 over Brent crude prices during the first three months of exports. First buyers would test it, and then prices could go up a little," a trader interested in purchases said.

The Liza project is expected to produce up to 120,000 bpd of oil in 2020-2022 and reach 750,000 bpd by 2025. Exxon had initially planned first production to come in early 2020, but in November it said it could be available in December.

Exxon and its partners have made 14 large discoveries at the Stabroek block since 2015.

We remind that, as MRC informed earlier, ExxonMobil's cracker at Notre Dame de Gravenchon, France, had an "unexpected stoppage" on Friday, 6 December, following a technical failure this October.

As reported before, an electric fire Saturday morning, 19 October, 2019, on the ExxonMobil facilities in Notre-Dame-de-Gravenchon (Seine Maritime) resulted in a plume of smoke, below the regulatory thresholds, which could remain visible for several days.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,724,670 tonnes in the first ten months of 2019, up by 7% year on year. Shipments of all PE grades increased. The estimated PP consumption in the Russian market in January-October 2019 totalled 1,066,520 tonnes, up by 7% year on year. Supply of block copolymers of propylene (PP block copolymer) and homopolymer of propylene (homopolymer PP) increased, demand for statistical copolymers (PP random copolymer) decreased.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world's oil and about 2% of the world's energy.
Author:Margaret Volkova
Tags:South America, PP, PE, crude and gaz condensate, PP block copolymer, homopolymer PP, PP random copolymer, propylene, ethylene, petrochemistry, CNOOC, Brazil, Venezuela, Guyana, China, Russia, France.
Category:General News
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