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ExxonMobil quits 80% stake in Ghana acreage to focus on Guyana, others
Map showing the location of the block relinquished by ExxonMobil.
Kaieteur News – America’s king of oil exploration, ExxonMobil Corporation, this week relinquished its majority interest in Ghana’s Deepwater Cape Three Points block located offshore. This news was confirmed with Reuters, Bloomberg and other international media agencies yesterday.
Preba Arkaah, a spokesman for Exxon in Ghana said via correspondence, “ExxonMobil is prioritising near-term capital spend on the most advantaged assets with the lowest cost of supply in the portfolio including developments in Guyana, Brazil and the U.S. Permian Basin.”
ExxonMobil had acquired the rights to explore the Deepwater Cape Three Points block in 2018. The U.S. based company held an 80% interest in the concession, while state-run Ghana National Petroleum Corporation held 15%, and GOIL Offshore Limited held five percent.
According to the Petroleum Agreement between Ghana and ExxonMobil, the oil giant had agreed to pay the country several types of taxes including 10 percent of the gross production of crude oil as royalty.
Over in Guyana, ExxonMobil via its subsidiary, Esso Exploration and Production Guyana Limited (EEPGL), operates the Stabroek Block that spans 26,800 square kilometers, more than 18 times the size of the block that was held by the oil giant in Ghana. The Production Sharing Agreement (PSA) insulates the Stabroek Block operator to be exempt from various types of taxes. Even ExxonMobil’s income tax, and that of its partners, Hess Corporation and CNOOC/NEXEN, is paid on behalf of the State.
Since bringing the Liza Phase One Project into operation in December 2019, EEPGL is set to bring Liza Phase Two on stream next year, with the third development project called Payara set for 2024.
The American explorer is already in the process of securing regulatory approvals for its fourth project called Yellowtail, poised for start-up in 2025 and which will produce up to 250,000 barrels of oil per day. Production from this project is expected to last at least 20 years.
The production facilities to be installed include subsea equipment attached to the seafloor as well as processing equipment on the ocean’s surface known as a Floating, Production, Storage and Offloading (FPSO) vessel. The subsurface equipment is expected to be installed at approximately 1,700 – 1,950 m of water depth. The main pieces of kit in the subsurface include the following: production tree, production manifold, flowlines, risers, and umbilicals. The subsurface umbilicals, risers and flowlines are commonly referred to as SURF.
Building on the previous Stabroek Projects, EEPGL said Yellowtail would be designed to demonstrate continuous improvement in environmental performance. EEPGL in this regard said it routinely strives to make improvements in environmental performance through emissions controls, technology enhancements and process improvements. Expounding further, the subsidiary said in 2020, the FPSO Liza Destiny experienced unanticipated technical challenges and unplanned gas flaring during its start-up and commissioning process.
As a result of the foregoing, EEPGL said it conducted comprehensive root-cause analyses of these issues and evaluated potential improvements to gas handling systems, sparing philosophy and execution procedures. The company assured the EPA that it plans to take significant steps to incorporate the lessons learned from the commissioning of the Liza Destiny into future projects, including Yellowtail.
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