Guyana to start offshore oil production soon

The government of Guyana says the country will soon start producing crude oil and gas from an offshore field which was discovered a year ago.

According to announcement on Wednesday, the energy giant, ExxonMobil, expects to start producing oil and gas by 2020 from the offshore area where it reported a significant oil find last year.

The oil and gas exploration activity by Guyana has been a source of tension with neighboring Venezuela, which claims a huge swathe of Guyana known as the Essequibo, AFP reported.

Guyana’s Prime Minister Moses Nagamootoo, however, held high-level meetings with president of ExxonMobil’s exploration department, Stephen Greenlee, after which he said the US energy giant plans to proceed with commercial offshore drilling for oil and gas as early as next year.

"What I can say with some assurance is that my impression is that oil extraction would be done long before the time you have stated," Nagamootoo said when asked whether oil would be pumped before Guyana's general elections, which are slated for 2020.

A source, who took part in the meeting with Greenlee, was also quoted by media as saying that ExxonMobil plans to begin drilling a second exploratory well next month in an offshore field near where its Liza 1 well struck oil last year.

The source, who declined to be named, said "there is a lot of oil and a lot of gas" at the Liza well and according to current projections, the second well is to be drilled next month in an area which will have even larger gas reserves.

"It's the perfect time to drill because the equipment is about half the price and it is available," a Guyanese official said, speaking on condition of anonymity.

Back in May 2015, Guyana announced a significant discovery of high quality hydrocarbon reserves, including crude oil, in an offshore concession 190 kilometers (120 miles) off Guyana. The announcement set off a round of recriminations between Venezuela and its eastern neighbor.

Officials in Caracas, which has long had claims on Guyana's Essequibo region, have alleged that the concession is located in disputed waters.

Venezuela’s President Nicolas Maduro has issued decrees extending Venezuela maritime boundaries to include the waters off the Essequibo region of Guyana, which makes up two thirds of the territory of the former British colony, declaring those waters as part of his country’s integrated defense zone.

Guyana maintains that valid land borders were set in 1899 by an arbitration court decision, but Venezuela says it has never recognized that decision.

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