June 16 (Reuters) – Exxon Mobil Corp said on Friday it would proceed with the development of one of the largest oil discoveries of the past decade, the Liza oil field, located offshore Guyana, after receiving approval from the South American nation’s government.

The Liza field is part of the large Stabroek block, which is off a border region that is claimed by Guyana’s neighbor, Venezuela, in a territorial controversy dating back more than a century. The area, however, functions in practice as Guyanese territory.

The development received regulatory approval from the Guyanese government, Exxon, the world’s largest publicly traded oil company, said in a statement.

Exxon also said its estimate of the amount of resources that could be extracted from the Stabroek block had increased to 2 billion to 2.5 billion oil-equivalent barrels.

Production from the Liza field is expected to begin by 2020, less than five years after its discovery, the company said.

The first phase of the Liza project would produce up to 120,000 barrels of oil per day, with an expected cost of about $4.4 billion, Exxon added.

Esso Exploration and Production Guyana Limited holds a 45 percent stake in the Stabroek block, U.S. oil producer Hess Corp holds a 30 percent interest and CNOOC Ltd owns 25 percent.

(Reporting by Ahmed Farhatha in Bengaluru; Editing by Sai Sachin Ravikumar)

Copyright 2017 Thomson Reuters. Click for Restrictions.

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