A day after being granted its production licence from the Guyana Government, US oil and gas giant ExxonMobil said it has made a final investment decision to proceed with the first phase of development for the Liza field located offshore Guyana, one of the largest oil discoveries of the past decade.The company also announced positive results from the Liza-4 well, which encountered more than 197 feet (60 metres) of high-quality oil-bearing sandstone reservoirs, which will underpin a potential Liza Phase 2 development.Gross recoverable resources for the Stabroek block are now estimated at 2 billion to 2.5 billion oil-equivalent barrels, which include Liza and other successful exploration wells on Liza Deep, Payara and Snoek.The Liza Phase 1 development includes a subsea production system, and a floating production, storage and offloading (FPSO) vessel designed to produce up to 120,000 barrels of oil per day. Production is expected to begin by 2020, less than five years after discovery of the field. Phase one is expected to cost just over $4.4 billion, and includes a lease capitalization cost of approximately $1.2 billion for the FPSO facility, and will develop approximately 450 million barrels of oil.President of ExxonMobil’s Development Company, Liam Mallon, said the company is excited about the tremendous potential of the Liza field, and is accelerating first production through a phased development in the lower cost environment.He said the company will work closely with Government, its co-ventures and the Guyanese people in developing the world-class resource that will have long-term and meaningful benefits for the country and its citizens.The Liza Phase 1 development can provide significant benefits to Guyana, including jobs during installation and operation; workforce training; local supplier development; and government revenues to fund infrastructure, social programs and services.Government on Thursday officially handed ExxonMobil and its partners a Production Licence.The announcements were made on Thursday by Natural Resources Minister Raphael Trotman as members of the National Assembly gathered to consider the second reading of the Petroleum Commission of Guyana Bill.Delivering his preamble to the debate on the Petroleum Bill – meant in part to create the Petroleum Commission – Minister Trotman recalled for the House the significant discovery made by ExxonMobil and its partners, as announced back in May 2015.Since that discovery, Trotman told the House, the ministry has been able to assess the quantum and value of that find at the Liza Well, which is said to contain a minimum of some 800 million barrels, and possibly a maximum of 1.4 billion barrels.According to Minister Trotman, the other international operators in Guyana have signalled their intention to continue with exploration activities. Only recently, one such operator – Tullow — operating in the Orinduik block, indicated that it would be scaling-up its exploration activities to encompass its entire concession.RoyaltiesMeanwhile, the Government remains satisfied with the two per cent royalty it negotiated with ExxonMobil. This is according to Minister of State, Joseph Harmon, during a post-cabinet press briefing.“I’ve seen statements about whether two per cent or five per cent is enough. I think that is something that will go on, but I have the full confidence that our Minister of Natural Resources has gotten the best advice possible in the circumstance.”Harmon was adamant that whatever agreement was arrived at between Guyana and ExxonMobil had benefited from local and international input. He also said that the agreement was in line with best practices.But when told of the average royalty rates that exceed Guyana’s rate, which other countries have obtained, Harmon defended the two per cent.“We have been given the best possible advice, and every situation has to be dealt with on its merit. Our situation may not be the same as another country’s situation,” Harmon affirmed.