ExxonMobil already tendering for Yellowtail development

Mar 08, 2021 News

– Months before seeking Govt.’s approval

Kaieteur News – ExxonMobil’s local subsidiary, Esso Exploration and Production Guyana Limited (EEPGL), is forging ahead with plans for its fourth development in the Stabroek block, Yellowtail. Despite it not planning to submit the field development plan (FDP) to government for review until the end of the year, the company has already started putting out tenders.
One oil service company, Subsea 7 SA (SUBCY), recently discussed an Exxon project it is bidding for in aid of Yellowtail, during its 2020 Full Year earnings call. Subsea 7 SA is a subsea engineering company domiciled in Luxembourg.

Map showing location of Yellowtail well in Stabroek Block.

During his company’s latest earnings call on February 25, 2021, Chief Executive Officer (CEO) of Subsea 7 SA, John Evans, responded to a question about Guyana saying “Yellowtail is a project, which is the next project for ExxonMobil in Guyana, and that is out for bid, and we are bidding that at the moment.”
Hess, a partner in the Stabroek block, announced in January that it had put aside US$70M from its 2021 exploration and production capital and exploratory budget of US$1.9 billion to finance unannounced, future development phases. This means the money is expected to be spent in 2021. Hess said that the money was set aside “primarily for front end engineering and design work for future development phases on the Stabroek Block.”
This is not the first time ExxonMobil has put out tenders way ahead of even submitting the FDP for a project. This is how ExxonMobil operates. Back in 2019, the company did the same thing with Payara.
Months before it submitted the FDP for Payara, which was approved nearly a year later, ExxonMobil had already granted contracts for Front End Engineering and Design (FEED) and subsea systems.
In November 2019, the company had given the Italian-based Saipem, a multi-million US dollar contract, for the subsea systems, for the Liza Prosperity. It had also already awarded a contract to SBM Offshore for the FEED.
What is the issue when it comes to handing out projects prematurely?
When former Executive Director of the Environmental Protection Agency (EPA), Dr. Vincent Adams, had encountered issues in the Payara FDP, which were of concern under his agency’s mandate, he began to demand changes be made to the project design to facilitate the environmental protection necessary.
But ExxonMobil insisted that to redesign the Prosperity in the manner that Dr. Adams requires would be too expensive and inconvenient, especially considering that some contracts were already handed out. Exxon was already well into its preparatory work for Payara. This had held up the approval of the Payara project for some time.

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