The recent plunge in crude oil prices has had no impact on production at Guyana’s flagship Liza project, operated by Exxon Mobil Corp., but the company plans to make adjustments as necessary, a spokeswoman said.

A price war between the world’s oil powerhouses and fast-declining crude demand have left many producers in Latin America struggling to cover production costs, boosting the chances of output cuts.

Production at the offshore Liza well, which Exxon and partners Hess Corp. and China’s CNOOC brought online in December, is expected to reach some 120,000 barrels per day (bbl/d) in its first phase.

“We are managing production rates to ensure safe and responsible operations,” Janelle Persaud, Exxon’s public and government affairs adviser in Guyana, said in a statement. “We continue to monitor the situation closely and will make adjustments as necessary.”

Exxon would have to engage with the Guyanese government before making any adjustments to its operations, the country’s director of energy, Mark Bynoe, told Reuters.

Crude prices climbed on April 2, with Brent futures approaching $30 per barrel after U.S. President Donald Trump said he expects Russia and Saudi Arabia to announce a major oil production cut.

Projected lifting costs for Liza partners will be just over $10 per barrel of oil for the full year, said Ruaraidh Montgomery, director of research at Houston-based consultancy Welligence.

“I can’t see them shutting down production,” Montgomery said. “It is complex and costly to shut down production and you don’t want to mess around with the reservoir in that way. They’re designed for continual production.”

Bynoe said he remained hopeful the government will be able to find a marketing agent to sell its share of Liza crude, despite delays in the search process caused by political turmoil after a disputed presidential election and the coronavirus outbreak.

Guyana’s government several months ago awarded a contract to Royal Dutch Shell to sell its first three cargoes of oil produced at Liza, or about 3 million barrels in total.

Shell has so far exported one of the three cargoes, according to Bynoe. The next lift allocated to the government and sold to the Anglo-Dutch firm, is scheduled for May, he said.

Offshore