ExxonMobil greenlights its $12.7 billion oil project offshore Guyana and firms up FPSO deal with SBM Offshore

U.S.-headquartered energy giant ExxonMobil has decided to move forward with its sixth deepwater oil development on the Stabroek block off the coast of Guyana. With all the required government and regulatory approvals in the bag, the oil major took a final investment decision (FID) for the project and confirmed the award of contracts for the construction and installation of a floating production, storage, and offloading (FPSO) vessel destined to work at the project.

ExxonMobil explains that the Whiptail development offshore Guyana, which represents its sixth project on the Stabroek block, is expected to add approximately 250,000 barrels of daily capacity by the end of 2027. This $12.7 billion project will encompass up to ten drill centers with 48 production and injection wells. Whiptail is anticipated to come online in 2027. The production from the six Stabroek block developments is expected to generate tens of billions of dollars of revenue, bringing a significant economic boost to Guyana.

Liam Mallon, President of ExxonMobil Upstream Company, commented: “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.”

According to the U.S. energy heavyweight, more than $4.2 billion has been paid into the Guyana Natural Resource Fund since the first production started on the Stabroek block in 2019. Currently, 6,200 Guyanese are working to support Stabroek block operations, which is 70% of the workforce. The cumulative spending of ExxonMobil Guyana and its contractors with Guyanese suppliers surpassed $1.5 billion since 2015 at the end of 2023.

The Whiptail project will develop the Whiptail, Pinktail, and Tilapia fields, along with potential additional resources, if deemed feasible and economically viable. This project is located in the southeastern portion of the Stabroek block, approximately 183 km from Georgetown and amid previous Stabroek projects on Guyana’s Continental Shelf.

SBM Offshore secured a contract in October 2023 to perform front end engineering and design (FEED) for the FPSO, to be named Jaguar, which will work on the Whiptail project. This vessel, currently under construction, will be the fifth FPSO built by the Dutch player for operations in Guyana. The unit’s ownership will transfer to ExxonMobil Guyana before the FPSO’s installation in Guyana. SBM Offshore expects to operate the FPSO for ten years under the operations and maintenance enabling agreement signed in 2023.

Moreover, the FPSO Jaguar’s design is based on the Dutch firm’s Fast4Ward program, which incorporates the firm’s seventh newbuild multi-purpose floater hull combined with several standardized topside modules. 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. The vessel, which will be spread moored in a water depth of about 1,630 meters, will come with a storage capacity of around 2 million barrels of crude oil.

Three other FPSOs operating offshore Guyana – Liza Destiny, Liza Unity, and Prosperity – produce more than 600,000 barrels of oil daily. In addition, construction is underway on FPSOs for the Yellowtail and Uaru projects, with the first anticipated to start production in 2025 and the second one targeted in 2026.

The Stabroek block covers 6.6 million acres or 26,800 square kilometers and is operated by ExxonMobil’s affiliate Esso Exploration and Production Guyana with a 45% interest. The company’s partners in the block are Hess Guyana Exploration (30%) and CNOOC Petroleum Guyana (25%).

Based on the U.S. oil major’s plans, six FPSOs with a gross production capacity of more than 1.2 million barrels of oil per day are expected to be online on the Stabroek block by the end of 2027, with the potential for up to ten FPSOs to develop the estimated gross discovered recoverable resources of over 11 billion barrels of oil equivalent.