Georgetown, Guyana — The U.S.-based oil company ExxonMobil said it will be investing $5 billion as it prepares to explore oil production in Guyana by 2020.

ExxonMobil Country Manager Jeff Simon said on Thursday that its local affiliate Esso Exploration and Production Guyana Limited has applied for a production license and has contracted floating production storage and offloading from SMB Offshore, a company that specializes in tanker and FPSO construction.

The FPSO is a specialized 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 group in a 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 specialized 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 in 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 1-in-5 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-acre Stabroek Block located offshore Guyana.

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

Read more here