SBM Offshore and ExxonMobil firm up FPSO award for Guyana’s fourth oil development

Following a final investment decision for the Yellowtail project located offshore Guyana, ExxonMobil and SBM Offshore have firmed up a contract for the supply of an FPSO for the project, which will be SBM’s largest so far.

ExxonMobil announced the FID for the company’s fourth, and largest project in the Stabroek Block on Monday. The project is expected to produce approximately 250,000 barrels of oil per day starting in 2025.

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In an update on Tuesday, SBM Offshore said that Esso Exploration and Production Guyana Limited (EEPGL), an affiliate of ExxonMobil, has confirmed the award of contracts for the Yellowtail development project.

Under these contracts, SBM Offshore will construct, install, and then lease and operate the ONE GUYANA FPSO for a period of up to two years, after which the FPSO ownership and operation will transfer to EEPGL. The award follows the completion of front-end engineering and design studies, receipt of requisite government approvals and the final investment decision on the project by ExxonMobil and block co-venturers.

The Yellowtail development is the fourth development within the Stabroek block, circa 200 kilometres offshore Guyana. EEPGL is the operator and holds a 45 per cent interest in the Stabroek block, Hess Guyana Exploration holds a 30 per cent interest and CNOOC Petroleum Guyana, a wholly-owned subsidiary of CNOOC Limited, holds a 25 per cent interest.

Fast4Ward - SBM Offshore
Fast4Ward design; Source: SBM Offshore

The FPSO ONE GUYANA’s design is based on SBM Offshore’s Fast4Ward program that incorporates the company’s new build, a multi-purpose floater hull combined with several standardized topsides modules. The FPSO will be designed to produce 250,000 barrels of oil per day, will have an associated gas treatment capacity of 450 million cubic feet per day and a water injection capacity of 300,000 barrels per day. The FPSO will be spread moored in a water depth of about 1,800 meters and will be able to store around 2 million barrels of crude oil.

SBM Offshore is preparing to further recruit and employ Guyanese engineers into the ONE GUYANA project team.

The turnkey phase of the project is executed by a special purpose company (SPC) established by SBM Offshore and McDermott. As a reminder, following the award of the FEED work for the project to SBM in November 2021, the Dutch operator established an SPC with McDermott for the execution of the turnkey phase of the project. The SPC is meant to benefit from the combined engineering and fabrication capacity as well as the experience of both companies in delivering EPC solutions.

SBM Offshore holds 70 per cent and McDermott holds 30 per cent equity ownership in this SPC. The FPSO will be fully owned by SBM Offshore.