Exxon signs another contract for unapproved US$12.6B 5th project

Jan 14, 2023 News

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Kaieteur News – ExxonMobil Corporation’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL), has handed out yet another contract for its fifth project in the absence of regulatory approvals.

Strohm B.V which is headquartered in the Netherlands revealed this week that it received a contract from Exxon to supply 24 jumpers (pipes and pipe connections) for the Uaru field development which will produce 1.3 billion barrels of oil over the course of 20 years.

The company said this is the largest commercial agreement in its 15-year history. Less than 12 months ago, it said Exxon had awarded it a similar contract for the Yellowtail development, also in Guyana’s Stabroek Block.

The Dutch company said the equipment will be produced at its manufacturing facility and used for water and gas (WAG) injection. It said the technology will be supplied to ExxonMobil Guyana in a single continuous length along with associated pipe handling equipment.

It said this concept and delivery method allows the individual 24-plus jumpers to be cut to the desired length, terminated, and tested onsite in Guyana. In this way, the company said the concept provides maximum flexibility to the end-user. The jumpers made of carbon fibre and PA12 polymer, will also be installed in deep water, at depths over 1,700m operating in the region of 10,000psi.

Strohm’s in-country specialist field service technicians will mobilise to Guyana as the jumper termination campaigns are called off over the duration of the deployment programme, spanning pre and post first oil from the development.

In the absence of the relevant approvals, Exxon made two other awards last year for the Uaru Project. Kaieteur News had reported that Mitsui Ocean Development & Engineering Company (MODEC) which is based in Japan signed a contract to perform Front End Engineering and Design (FEED) for a Floating Production, Storage and Offloading vessel (FPSO) for the “Uaru” development project. French multi-national Vallourec also secured a third major order in the framework of the Long-Term Agreement (LTA) signed in 2021 with ExxonMobil Guyana. Under the contract, Vallourec will deliver line-pipe for ExxonMobil Guyana’s deep-water Uaru project.

Importantly, the Uaru Project is expected to cost Guyana over GY$2.6 Trillion (US$12B). The Environmental Impact Assessment (EIA) states that the Uaru Development Project will develop the Uaru, Mako and Snoek oil-rich fields with the potential to develop other resources within the Licence area.

A preliminary schedule anticipates that FPSO and other fabrication and installation works will begin in 2024 following the completion of engineering and will take approximately three years. Development well drilling may also occur during this period. Production operations are expected to begin in 2027 and will continue for at least 20 years.

With respect to the FPSO, EEPGL’s Environmental Impact Assessment states that oil production will average at 250,000 barrels of oil per day. It was keen to note that peak rates may be higher during the lifetime of the project, depending on multiple factors such as reservoir pressure, number of wells, equipment reliability etc.

It states at page 146, “Currently, the FPSO basic design has an upper production limit of 263,000 BPD (42,080 m3) peak oil production rate. For the purposes of the EIA, production up to 300,000 bpd is considered to assess potential impacts from the project and cover potential production optimization after facility start up. If during the detailed design stage or during production operations an opportunity to expand the upper production limit arises, the project will document the evaluation and justification and an updated upper production limit will be available.”

It was also noted that the project will be producing 540 million standard cubic feet of gas per day.

Importantly, telecommunications equipment will also be installed on the FPSO to enable safe operation of the facilities in normal and emergency conditions. Kaieteur News understands that this equipment will allow communication with the offices, shore bases, support vessels, helicopters, and tankers, as well as communication within the FPSO.

EEPGL had previously installed the Fibre Optic Cable Project, which provides the fibre optic communication infrastructure from the Stabroek Block to shore, enabling high-speed, low-latency communications and data transfer between EEPGL’s FPSOs and shore.

The Fibre Optic Cable Project included installation of two optical distribution units (ODUs), two main fibre optic trunk lines to shore, and fibre optic cables routed from the Destiny, Unity, Prosperity, and One Guyana FPSOs to the ODUs.

EEPGL plans to connect this Project’s FPSO into the existing fibre optic infrastructure back to shore, which will consist of two fibre optic cables connected from a Uaru subsea drill centre back to the existing two ODUs. From the Uaru subsea drill centre, the fibre optic cable will connect to the Uaru FPSO via one of the dynamic umbilicals, which will contain fibre strands.

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• ExxonMobil, FPSO, Guyana EEPGL, Payara, Uaru

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