Exxon Mobil Corporation XOM is putting a cap on production from offshore Guyana and limiting output to 100,000 barrels per day (bpd), per Reuters. A local environmental regulator stated that the company is having more problems with natural reinjection, which is affecting output.
The first phase of the Liza project at the Stabroek block, offshore Guyana, was expected to reach 120,000 bpd production capacity in August. The company uses the natural gas that comes as a byproduct of oil for reinjection at the site. However, mechanical issues associated with the gas compression equipment are obstructing its plan of reinjecting all the natural gas and reach the maximum oil production capacity.
Per Reuters, the company is checking production in order to limit gas flaring, which is harmful for the environment. In June, it curtailed production at the site to 30,000 bpd but later brought production back to 90,000 bpd as some technical glitches were fixed. Once the third gas handling system comes online, the company is expected to reach the 120,000-bpd oil production mark.
Notably, ExxonMobil estimates gross resources of more than 8 billion barrels of oil equivalent from its 16 promising discoveries in the Stabroek Block. The discoveries made so far on the block have the potential to add five FPSO vessels that will be capable of yielding 750,000 barrels of oil per day by 2025. ExxonMobil commenced production in the block last December.
Esso Exploration and Production Guyana Limited, a subsidiary of ExxonMobil, is the operator in the Stabroek Block with a 45% stake. The respective subsidiaries of Hess Corporation HES and CNOOC Limited CEO have 30% and 25% interest in the block.
The company’s stock has lost 5.3% in the past three months compared with 3.9% fall of the industry it belongs to.
Zacks Rank & Stock to Consider
Currently, ExxonMobil has a Zacks Rank #3 (Hold). A better-ranked player in the energy space is Royal Dutch Shell plc RDS.A, holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shell’s bottom line for 2021 is expected to rise 112.5% year over year.
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