Exxon’s 4th oil project to cost over US$9 billion

Oct 24, 2021 News

Kaieteur News – According to ExxonMobil’s Environmental Impact Assessment (EIA) for its fourth project called Yellowtail, development costs are poised to exceed US$9B or GY$1.8 trillion.
Exxon said the costs are expected to be higher since there would be a greater number of development wells and associated drilling costs when compared to its Payara project which will also cost Guyana $1.8 trillion.
Despite the astronomical costs, Exxon believes that the project should be supported as it would generate benefits for the citizens of Guyana in several ways, which would otherwise not be there in the absence of the project. It said these benefits include revenue sharing with the Government of Guyana. The oil giant stressed however, that the type and extent of the benefits associated with revenue sharing will depend on how decision-makers in government decide to prioritise and allocate funding for future programmes, which is unknown to the company and outside the scope of the EIA.
Apart from the revenue sharing, Exxon said Guyanese stand to benefit from the procurement process that will follow for goods and services from local businesses in alignment with the Petroleum Agreement and the EEPGL Local Content Plan approved by the Ministry of Natural Resources in June 2021.
Apart from revenue sharing, expenditures, and employment, Exxon said the project will also likely generate induced economic benefits.
According to project documents, Yellowtail will consist of the drilling of approximately 41 to 67 development wells (including production, water injection, and gas re-injection wells); installation and operation of Subsea, Umbilicals, Risers, and Flowlines equipment; installation and the operation of a Floating Production, Storage, and Offloading (FPSO) vessel in the eastern half of the Stabroek Block; and— ultimately—project decommissioning.
The FPSO will be designed to produce up to 250,000. The initial production is expected to begin by the end of 2025–early 2026, with operations continuing for at least 20 years.
The project is expected to employ up to 540 persons during development well drilling, approximately 600 persons at the peak of the installation stage, and 100 to 140 persons during production operations.

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