ExxonMobil sanctions $12.7 billion oil development off Guyana

U.S.-headquartered energy giant ExxonMobil has made a final investment decision (FID) to proceed with the fifth oil development project in Stabroek block offshore Guyana, after receiving government approvals.

The final investment decision to proceed with Uaru, the fifth development on the Stabroek Block, was disclosed on Thursday, 27 April 2023, by ExxonMobil’s partner on the block, Hess Corporation. This project will have a production capacity of approximately 250,000 gross barrels of oil per day with production targeted to begin in 2026. ExxonMobil submitted for approval a plan for the development of Uaru to the government of Guyana in 2022 and government approval has now been received.

According to Hess, the $12.7 billion Uaru development will target an estimated resource base of more than 800 million barrels of oil and include up to 10 drill centres and 44 production and injection wells. Japan’s MODEC secured a FEED contract for Uaru FPSO, which will be called Errea Wittu, and is constructing it under an engineering, procurement and construction (EPC) contract.

The FPSO, based on MODEC’s M350 newbuild design, which will be able to produce 250,000 barrels of oil per day, will have an associated gas treatment capacity of 540 million cubic feet per day, and a water injection capacity of 350,000 barrels per day.

John Hess, Hess’ CEO, commented: “We are excited to sanction Uaru, our fifth oil development on the Stabroek Block. We look forward to continuing to work with the government of Guyana and our partners to realize the remarkable potential of this world-class resource for the benefit of all stakeholders. The world will need these vital oil resources to meet future energy demand and help ensure an affordable, just and secure energy transition.”

This comes days after ExxonMobil made a new discovery at the Lancetfish-1 well on the Stabroek block. The U.S. oil major’s first two sanctioned projects off Guyana are Liza Phase 1 and Liza Phase 2, which produced an average of 375,000 gross barrels of oil per day in the first quarter of 2023.

Furthermore, the third sanctioned development on the Stabroek Block, Payara, is targeted for start-up early in the fourth quarter, with a gross production capacity of approximately 220,000 barrels of oil per day. The Prosperity FPSO, which will be deployed at the Payara development, arrived at the Stabroek Block on 11 April 2023 and the hook-up and commissioning activities are already underway.

On the other hand, the fourth sanctioned development, Yellowtail, which comprises six drill centres and up to 26 production and 25 injection wells, is expected to come online in 2025 using the One Guyana FPSO with a gross production capacity of approximately 250,000 barrels of oil per day. In addition, a sixth development, Whiptail, is expected to be submitted for government and regulatory approval later this year.

Based on ExxonMobil’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 more than 11 billion barrels of oil equivalent.

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