Project Details reveal… ExxonMobil’s hammerhead Project to produce 150,000 to 190,000 barrels of heavy oil per day

Mar 11, 2020 News

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By Kiana Wilburg

ExxonMobil’s fourth development project on the Stabroek Block will roll out at the Hammerhead well and will see the production of 150,000 to 190,000 barrels of heavy oil per day.
This was revealed in project details ExxonMobil’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL), recently submitted to the Environmental Protection Agency (EPA).
In that document, EEPGL noted that Hammerhead is located in the eastern portion of the Stabroek Block approximately 160km from Georgetown. The project is expected to last for 20 years and will see 26 to 30 wells being drilled to support extraction of the oil from below the seafloor. Each well will be drilled to some 3500 to 5300 metres below sea level.
Kaieteur News understands that EEPGL will install some of the oil production facilities on the sea floor at approximately 800 to 1500 metres water depth. These subsea facilities include various types of pipes and hardware. The subsea facilities allow the oil from the wells to be gathered and moved to the surface of the ocean for further processing.
It was noted that EEPGL will use a Floating Production Storage and Offloading Vessel (FPSO) which will have the capacity to produce up to an average of approximately 4,500,000 to 5,200,000 barrels of crude oil per month. The operator noted that these estimates are preliminary and are subject to change.
In addition, it was noted that approximately every seven to eight days, the oil will be pumped from the FPSO to a conventional tanker which is owned and/or operated by others. The tanker will then bring the oil to buyers.
At peak, EEPGL will utilise approximately 1200 personnel offshore during the stage where wells are being drilled and the offshore oil production facilities are being installed. It was keen to point out that this number will decrease to 200 personnel during the production operations phase. Further to this, a smaller number of personnel will be utilised at the onshore support facilities.
With respect to overall production rates, Hammerhead will produce 150,000 to 190,000 barrels of oil per day; Payara will produce 180,000 to 220,000 barrels of oil per day; Liza Phase Two will produce 220,000; and Liza Phase One is at 100,000 barrels of oil per day with the ability to produce at 120,000 at sustained peaks. If EEPGL gets all the necessary approvals, it can bring operations for Hammerhead on stream by mid-2024 and produce as it had projected, 750,000 barrels of oil per day by 2025.
REQUEST FOR PUBLIC’S COMMENTS
It was only a few days ago that Esso Exploration and Production Guyana Limited submitted an application to the Environmental Protection Agency to undertake the development of Hammerhead which stands as its ninth discovery on the Stabroek Block.
This discovery was announced in August 2018. The well was drilled in a new reservoir, encountering approximately 197 feet (60 meters) of high-quality, oil-bearing sandstone reservoir.
As a result of the intended development activities, the EPA noted that the Operator of the Stabroek Block would have to submit an Environmental Impact Assessment (EIA) for the Project.
It said that members of the public are invited within 28 days of this notice to make written submissions to the agency, setting out questions and matters, which they require answered or considered in the EIA.
The EPA also said that a summary of the project can be viewed on the EPA website.
HEAVY OIL
Most of the oil in the Stabroek Block has been described as light, sweet crude but this is not the case for Hammerhead. While ExxonMobil has been tightlipped about the kind of oil in Hammerhead, its partner on the Stabroek Block, Hess Corporation, disclosed last year that Hammerhead contained heavy oil.
Specifically, Hess Corporation’s Chief Executive Officer (CEO), John Hess made this disclosure at the 2019 Global Energy Conference.
He was at the time presenting the keynote address on Perspectives on Global Oil Outlook.
During the conference, the Hess CEO was asked by investors to state if there should be any cause for worry about Hammerhead which extends into the Orinduik Block.
At that time, the market was already informed that two wells on the Orinduik Block, Jethro and Joe, contained heavy oil, which is less valuable on the world market.
Hess maintained that there was no need for investors to be concerned while noting that ExxonMobil, which is the operator of the block, has drilled three wells in the Hammerhead area and would not have done so if it were not deemed commercial.
The CEO said, “…As you go into the shallow waters, Hammerhead is an indicator of this, the oil is definitely heavier. But what we have there is a pretty big tank of oil and…that is going to be a commercial development. Plans are going ahead with that. The specifics of that I can’t get ahead of …”
The official added, “In the way the geology of the block works…as you go inboard, the oil tends to get heavier. That’s the case with Hammerhead. It doesn’t surprise me that even more inboard, Tullow (the Operator of the Orinduik Block) has a heavier outcome.”
The CEO said that the oil in Hammerhead is not only heavier than what is contained in Liza Phase One but also that in Phase Two and its potentially third field development project, Payara. “…But at the end of the day, it is very much commercial,” the CEO added.
According to Berenberg Bank, one of the world’s largest multinational investment banks, it projected that Exxon’s Hammerhead discovery holds 800M net recoverable resources, with the Orinduik Block operator poised to cash in when production comes on stream.
Even as it pursues this fourth venture, ExxonMobil is yet to receive the green light from the EPA for its third development project on the Stabroek Block called Payara.
According to documents in the possession of the Environmental Protection Agency, EEPGL’s Payara development will be located in the eastern area of the Stabroek Block, which is approximately 190 km (118 miles) from Georgetown.
The operator notes that oil production from Payara is expected to last at least 20 years with startup of the facilities expected to occur approximately in mid-2023.

 

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