Guyana approves latest ExxonMobil oil project

2024, 04/12

The Guyana government Friday granted a petroleum production licence to the US energy giant, ExxonMobil, the Stabroek Block operator for its sixth development offshore Guyana, Whiptail.

The Ministry of Natural Resources said that this US$12.7 billion development will produce 250,000 barrels of oil daily, bringing daily production to 1.3 million by the end of 2027. Additionally, this development will include up to ten drill centers with 48 production and injection wells.

The construction of Jaguar, the floating, production and offloading (FPSO) vessel identified for this development, remains in progress. This vessel joins the Liza Destiny, Liza Unity and Prosperity FPSOs, which combined, are currently producing over half a million barrels of oil daily. Construction is also in progress for the Yellowtail and Uaru developments. Production for these projects is planned to commence in 2025 and 2026, respectively.

Oil production from this sixth development will generate substantial revenue for Guyana, thereby supporting significant economic and social upliftment for the country and its citizens.

Stabroek Block, off the coast of Guyana, generates much of the tax revenue that allows the administration in Georgetown to increase its 2024 expenditure by 46 per cent.

In a separate statement from its US office, ExxonMobil said it has made a final investment decision for the Whiptail development offshore Guyana, after receiving the required government and regulatory approvals.  Whiptail, the sixth project on the Stabroek block, is expected to add approximately 250,000 barrels of daily capacity by the end of 2027. Liam Mallon, president of ExxonMobil Upstream Company, said,

“Our sixth multi-billion-dollar project in Guyana will bring the country’s production capacity to approximately 1.3 million barrels per day. Our unrivaled success in developing the Guyana resource at industry-leading pace, cost and environmental performance is built on close collaboration with the government of Guyana, as well as our partners, suppliers, and contractors. The Stabroek block developments are among the lowest emissions intensity assets in ExxonMobil’s upstream portfolio and will provide the world with additional reliable energy supplies now and for years to come. We are committed to helping spread the benefits throughout the country by investing in local Guyanese communities and projects to support the country’s phased and sustainable development.”

ExxonMobil said the $12.7 billion Whiptail project will include up to 10 drill centers with 48 production and injection wells. Production from the six Stabroek block developments will generate tens of billions of dollars of revenue and significant economic development for Guyana. Since first production in 2019, over US$4.2 billion has been paid into the Guyana Natural Resource Fund.

There are currently 6,200 Guyanese working in support of Stabroek block operations— 70 per cent of the workforce. The cumulative spend of ExxonMobil Guyana and its contractors with Guyanese suppliers since 2015 surpassed US$1.5 billion at the end of 2023.

 

 

 

ExxonMobil greenlights Whiptail project , expects production to pass Venezuela

Bloomberg – Kevin Crowley, April 14, 2024

Exxon Mobil Corp. formally approved its sixth oil development offshore that will make the Latin American nation a bigger crude producer than OPEC founder Venezuela.The Whiptail project will cost $12.7 billion and produce about 250,000 bpd by the end of 2027. Overall daily crude capacity will climb to 1.3 MMbbl just eight years after the advent of Guyana’s oil production.

Guyana’s boom comes as neighboring Venezuela grapples with years of underinvestment and international sanctions that slashed oil production and government revenues. Emergence as a major oil producer is having vast social and economic consequences for Guyana’s 800,000 people. Oil revenues allowed the government to unleash a wave of welfare and infrastructure spending while expanding crude supplies factored into a recent OPEC decision to maintain production caps in a bid to support prices. International crude prices rose almost 20% this year to about $90 a barrel.

Exxon plans to drill 48 wells about 120 miles (190 kilometers) offshore Guyana that will feed a floating production, storage and offloading vessel, named Jaguar, the national animal. SBM Offshore NV will construct the FPSO which will have 2 MMbbl of crude storage capacity,. SBM shares rose 1.7% in Amsterdam.

Exxon expects Whiptail to ultimately produce over 750 MMbbl. The cache was discovered in 2021.

Guyana’s offshore oil production growth is unlikely to continue at breakneck pace once Whiptail is online in 2027. Exxon found enough oil and natural gas to support 10 FPSOs but is leaving its options open for the seventh project having made 49 major discoveries.

Exxon’s Guyana country manager Alistair Routledge said, “Some of it is not quite so easy reservoir-wise, but there’s a lot of resource,. We’re working through that inventory and figuring out what could potentially be next in the development.”

One option is for Guyana’s first gas-focused project, which is favored by the government. Other options include connecting more recent discoveries to existing production vessels rather than commissioning new FPSOs.

Since Exxon’s first discovery in 2015, known reserves have expanded to over 11 Bbbl, attracting unwelcome interest from Venezuela. President Nicolas Maduro has ramped up rhetoric around historic claims to the Essequibo region that makes up two-thirds of Guyana’s land mass.

Chevron Corp. is attempting to buy a share of Guyana’s oil bounty through a $53 billion takeover of Hess Corp., which holds 30% of the Exxon-led development. Exxon, which owns 45%, is disputing the change of hands via arbitration at the International Chamber of Commerce, arguing that it has a right of first refusal.

PRC oil giant Cnooc Ltd., which also owns a stake, joined Exxon in arbitration last month.

 

 

 

Saipem proceeding with ExxonMobil’s sixth oil development offshore

April 15, 2024, Melisa Cavcic

ExxonMobil Guyana Limited, subsidiary of the U.S.-headquartered energy giant ExxonMobil, gave the go-ahead to engineering, drilling, and construction services provider Saipem to proceed with work on the sixth oil development at the Stabroek block offshore Guyana. The Italian contractor was hired in November 2023 to handle the design, fabrication, and installation of subsea structures, risers, flowlines, and umbilicals destined for a large subsea production facility on the Whiptail oilfield development. This is ExxonMobil’s sixth project in the Stabroek block offshore Guyana located at a water depth of approximately 2,000 meters. After securing regulatory approvals, ExxonMobil made a final investment decision (FID) to develop the project at the end of last week.

Following the FID, ExxonMobil Guyana Limited and its Stabroek block coventurers authorized Saipem to proceed with the execution of the Whiptail oilfield development project.

The company’s scope of work encompasses detailed engineering, procurement, construction, and installation (EPCI) of a subsea production facility. The contract’s value is estimated to be between $750 million and $1.5 billion.

The Italian heavyweight started initial activities, including the detailed engineering and procurement of the long lead items, and will now be able to proceed with the execution of the remaining project activities. Saipem’s FDS2, Castorone, and Constellation vessels will be used for the offshore installation activities. Saipem will deploy its Guyana Offshore

Construction Facility at the Port of Georgetown and an additional local fabrication facility, for on-site construction of part of the submarine items. Saipem describes this as proof of its continued commitment to sustainable growth in the country. The Whiptail project entails the development of the Whiptail, Pinktail, and Tilapia fields, along with potential additional resources, should they be feasible and economically viable.

The development concept for the project covers drilling operations via drillships to produce oil from around 40 to 65 production and injection wells. With an expected field life of at least twenty years, the project is slated to be brought on stream in 2027.

SBM Offshore is in charge of front end engineering and design (FEED) for the FPSO Jaguar, which will work on the Whiptail project. This vessel will be the fifth FPSO built by the Dutch player for operations in Guyana. With a production capacity of 250,000 barrels of oil per day, the FPSO will have an associated gas treatment capacity of 540 million cubic feet per day and a water injection capacity of 300,000 barrels per day.

Saipem previously won deals for ExxonMobil’s five other projects in Guyana: Liza Phase 1 and Phase 2, Payara, Yellowtail, and Uaru. The Stabroek block, which covers 6.6 million acres or 26,800 square kilometers, is operated by ExxonMobil with a 45% interest while the consortium partners in the block are Hess Guyana Exploration (30%) and CNOOC Petroleum Guyana (25%).

Saipem has been busy lately. Recently, the firm completed its assignment on a Greek LNG project and made progress with the shipment of the first three topsides for another LNG project off the northeast coast of Qatar.

SBM Offshore will construct and install FPSO Jaguar

Offshore
April 12, 2024

SCHIEDAM, Netherlands — SBM Offshore has been awarded contracts from ExxonMobil Guyana Ltd. (EMGL) for the Whiptail development project in the Stabroek Block.

SBM Offshore will construct and install FPSO Jaguar.     Ownership will transfer to EMGL prior to the FPSO’s installation in Guyana, and SBM Offshore expects to operate the FPSO for 10 years under an operations and maintenance agreement signed in 2023. The award follows completion of FEED studies, receipt of requisite government approvals and the final investment decision on the project by ExxonMobil and block co-venturers.

The Whiptail development is the sixth development within the Stabroek Block, about 200 km offshore Guyana.      EMGL is the operator and holds a 45% interest in the Stabroek Block with partners Hess Guyana Exploration Ltd. (30%) and CNOOC Petroleum Guyana Ltd. (25%).

FPSO Jaguar’s design is based on SBM Offshore’s Fast4Ward program, which incorporates the company’s seventh newbuild, multipurpose floater hull combined with several standardized topsides modules. The FPSO will be designed to produce 250,000 bbl/d of oil, will have associated gas treatment capacity of 540 MMcf/d and water injection capacity of 300,000 bbl/d. The FPSO will be spread moored in water depth of about 1,630 m and will be able to store about 2 MMbbl of crude oil.

 

 

 

 

Strohm to supply pipe for Whiptail

April 16, 2024 Melisa Cavcic

Dutch thermoplastic composite pipe (TCP) technology manufacturer, Strohm, won the largest commercial award for pipe supply in its 16-year history, with a new contract for an oil development with ExxonMobil Guyana Limited, a subsidiary of the U.S. energy giant ExxonMobil. Work off the coast of Guyana enables Strohm to score its largest pipe supply deal ever.

Strohm Netherlands

The Netherlands-based manufacturer’s latest TCP ‘jumper on demand’ contract is for the supply of TCP for the Whiptail development, ExxonMobil’s sixth project in the Stabroek block offshore Guyana. A final investment decision (FID) to develop the project was made last week on the receipt of all regulatory approvals. Strohm’s new contract brings the project count for work with the U.S. oil major in Guyana to three, following previous awards for the Yellowtail and Uaru projects. The jumpers, made of carbon fiber and PA12 polymer, will be installed at water depths over 1,600 meters and will operate in the region of 10,000 psi. The use of TCP is expected to enable ExxonMobil to slash the CO2 footprint of its pipeline infrastructure.

Gavin Leiper, Strohm’s Vice President of Americas & Global Field Services Group, commented: “This latest award brings us to a total of over 70 jumpers across three developments in Guyana’s Stabroek block. Not only is this our largest award to date, but it also means we will be terminating TCP and supporting ExxonMobil Guyana and its co-venturers for at least the next 5 years under our field service group contract. We look forward to deepening our relationship with ExxonMobil Guyana and our Guyanese partners through the delivery and execution of the scope for Whiptail.”

Once the TCP for Whiptail, which will be used for water and gas (WAG) injection, has been produced at the firm’s manufacturing facility in the Netherlands, the technology will be supplied to ExxonMobil in a single, continuous length along with associated pipe handling equipment. This concept and delivery method allows the individual 24 jumpers to be cut to the desired length, terminated, and tested onsite in Guyana, providing flexibility to the end user. The development concept for the Whiptail project, which covers the Whiptail, Pinktail, and Tilapia fields, along with potential additional resources should they be feasible and economically viable, entails drilling operations to produce oil from around 40 to 65 production and injection wells. The $12.7 billion project, which has an expected field life of at least twenty years, is anticipated to come online in 2027.

Strohm Netherlands

 

 

Modec to charter key offshore vessel for major Guyana development

Flotel will assist in hook-up and commissioning activities for the Errea Wittu FPSO in the Uaru field

Fabio Palmigia 2 April 2024

Japanese floater specialist Modec launched a tender process to contract an accommodation vessel for the Uaru project in the Stabroek block . Modec is responsible for building and supplying the Errea Wittu floating production, storage and offloading vessel for ExxonMobil to exploit hydrocarbons from Uaru, with the first oil scheduled for 2026.

Modec recently invited leading contractors to submit offers on 4 April for a flotel equipped with an accommodation block for at least 150 berths, according to bidding documents seen by Upstream.

 

 

 

 

 

Guyana launchpad for helicopter provider’s ambitions

OHI’s Jeremy Akel describes the opportunities and challenges of mobilising in a young oil and gas province

Russell McCulley
UpstreamLondon, 17 April 2024

New Year’s Day 2024 marked the one-year anniversary of Omni Helicopters International’s first flight, under a new contract with Stabroek block operator ExxonMobil, to one of the floating production, storage and offloading vessels serving the Liza field offshore Guyana.

It was a significant milestone for the Portugal-based provider of vertical lift services, to use the helicopter transport industry term. Just six months before that January 2023 flight, Omni Helicopters International (OHI) learned it had won a tender for the contract to provide services for the supermajor’s Guyana operations.

It was also a big moment for Jeremy Akel, who joined OHI in 2019 as chief executive. Akel was on that initial flight, along with senior ExxonMobil management, and describes the contract award and its fast-track implementation as “a testament to the focus, the project management and the commitment” of his team in Guyana.

 

 

 

 

ExxonMobil, CNOOC merge arbitration claims against Chevron

March 29, 2024, (Bloomberg)

Exxon Mobil Corp. and Cnooc Ltd. merged arbitration claims against Chevron Corp.’s proposed takeover of Hess Corp. that would allow the U.S. oil supermajor to enter the Stabroek Block offshore Guyana.The unified arbitration was approved after a March 26 application, according to a Hess letter to stockholders included in a Chevron regulatory filing on Thursday. Exxon and Beijing-based Cnooc, which own 45% and 25% of Stabroek, respectively, argue they have a right of first refusal over Hess’s stake in the block.

“Chevron and Hess believe that ExxonMobil’s and CNOOC’s asserted claims are without merit,” according to the filing. Hess “intends to vigorously defend its position in the arbitration proceedings and expects the arbitration tribunal will confirm that the Stabroek ROFR does not apply to the merger.”

The dispute over a contract written more than a decade ago is unprecedented in the modern history of the oil and gas industry and threatens to upend Chevron’s $53 billion deal to buy Hess. In the filing, Hess noted that Exxon published a statement in October “indicating its support” for the deal before reversing course six months later.

Hess reiterated its confidence in winning the arbitration case “based on the express terms of the Stabroek” contract, it said.

Exxon has accused Chevron and Hess of attempting to “circumvent” the contract, which is private.   “We understand the intent of this language of the whole contract because we wrote it,” Exxon Senior Vice President Neil Chapman said on March 6.

 

 

 

 

 

TechnipFMC scoops up work on ExxonMobil’s sixth oil projects

APRIL 16, 2024, BY MELISA CAVCIC

UK-headquartered energy technology provider TechnipFMC has been hired on a large subsea assignment by ExxonMobil Guyana Limited, related to the oil major’s sixth oil development at the Stabroek block off the coast of Guyana.

TechnipFMC
For TechnipFMC, a large contract is perceived to be between $500 million and $1 billion and this award will be included in inbound orders in 2Q 2024. The deal entails the supply of subsea production systems for the Whiptail oil development, representing ExxonMobil’s sixth project in the Stabroek block . ExxonMobil made a final investment decision (FID) to develop the project at the end of last week once all regulatory approvals were secured.

Under the terms of the deal, TechnipFMC will provide project management, engineering, and manufacturing to deliver 48 subsea trees and associated tooling, along with 12 manifolds and associated controls and tie-in equipment.

Currently, the UK firm employs nearly 140 Guyanese workers and expects to continue hiring and training trend local staff in support of the latest contract award. TechnipFMC has been in charge of ExxonMobil’s subsea production systems in Guyana since the first contract award in 2017 for Liza Phase 1.

Jonathan Landes, President of Subsea at TechnipFMC, commented: “ExxonMobil Guyana will utilize our Subsea 2.0 systems and manifolds, which help provide schedule certainty. We have already delivered more than 100 subsea trees for ExxonMobil Guyana – the location of one of the world’s fastest developing basins – and we look forward to deepening our relationship with them through Whiptail.”

Covering the development of the Whiptail, Pinktail, and Tilapia fields, along with potential additional resources – should they be feasible and economically viable – the development concept for the Whiptail project encompasses drilling operations via drillships to produce oil from around 40 to 65 production and injection wells. With an expected field life of at least twenty years, the project is anticipated to come online in 2027.