Approval for Exxon’s 5th oil project only a formality for us – FPSO Builder

Mar 01, 2023 News

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Kaieteur News – Esso Exploration and Production Guyana Limited (EEPGL)—ExxonMobil Guyana—is yet to make a formal announcement on a Final Investment Decision (FID) and the Guyana Government is also still to provide relevant approvals for the Uaru development in the Stabroek Block but this is being seen as a formality, by at least one top tier contractor.

The Uaru development is the fifth proposed oil field to be developed in the Stabroek Block by ExxonMobil Guyana as the operator. It has since contracted Japanese Floater Specialists, MODEC to build out the Floating Production Storage and Offloading (FPSO) vessel for that oil field. According to reports on Monday by ‘upstreamonline,’ the Japanese company has already selected a Chinese Contractor for key topside works on the vessel.

Additionally, MODEC has also moved to secure yard space for building the topside modules for the FPSO to be deployed. t was noted that the US supermajor is expected to make its FID by the end of the first quarter of this year. To this end, it was reported that MODEC is already in possession of Front End Engineering and Design (FEED) studies, for the FPSO and that the project’s “fundamentals are so strong, that sanction by ExxonMobil and its partners on the prolific Stabroek Block are seen as a formality once regulatory approvals are in place.”

The Japanese company had first announced the FEED Contract in November last, when it had inked the agreement with ExxonMobil to build out the fifth FPSO.

At the time, the company said, the FEED contract award relates to the initial funding by ExxonMobil’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL), to begin FEED activities related to the FPSO design and to secure the second hull for FPSO service.

It did note that following FEED and subject to government approvals in Guyana of the development plan, project sanction including FID by ExxonMobil, and EEPGL’s release of the second phase (EPCI) of work, MODEC is expected to construct the FPSO and install in Guyana.

MODEC said, it is also anticipated that the company would operate the FPSO for an initial duration of 10 years, with potential options for continuation.

According to MODEC, the FPSO will be designed to produce 250,000 barrels of oil per day, will have Associated Gas treatment capacity of 540 million cubic feet per day and water injection capacity of 350,000 barrels per day. The FPSO will be installed in a water depth of about 2000 meters, using a SOFEC Spread Mooring System and will be able to store around 2 million barrels of crude oil. “We are extremely honored and proud to be selected to provide the FEED services for an FPSO for the UARU project,” commented Takeshi Kanamori, President and Chief Executive Officer of MODEC, at the time of the signing of the contract.

“We are equally proud of our robust track record of successful project deliveries in the South America region, and we look forward to cooperating closely with the client and its partners to make this project a success,” he said.The FPSO will be MODEC’s first for use in Guyana.

Additionally, the French company, Vallourec has also secured three major contracts for works in Guyana, namely to provide the items for the oil company’s upcoming Yellowtail and Urau projects, as well as the Gas to Energy venture set to bring natural gas from the seabed to land.

In a press release, the French company announced in December last that it had won a major Line-Pipe order from ExxonMobil Guyana.

“Vallourec has secured a third major order in the framework of the Long-Term Agreement (LTA) signed last year with ExxonMobil Guyana. Under the contract, Vallourec will deliver line-pipe for ExxonMobil Guyana’s deep-water Uaru project,” the company said.

The Uaru project which is still pending necessary approvals is located in the Stabroek Block, a 26,800 km2 strategic basin located off Guyana’s continental shelf, where several important discoveries have been made since 2015.  The Uaru discovery involves two parts. In January 2020, ExxonMobil announced that Uaru-1 was their 16th discovery in the Stabroek Block. The well encountered approximately 94 feet (29 meters) of high-quality oil-bearing sandstone reservoir and was drilled in 6,342 feet (1,933 meters) of water.

ExxonMobil said last April that Urau-2 added to the previously announced gross discovered recoverable resource estimate for the block, which is currently estimated to be approximately 9 billion oil-equivalent barrels. Drilling at Uaru-2 encountered approximately 120 feet (36.7 meters) of high- quality -oil bearing reservoir and was drilled in 5,659 feet (1,725 meters) of water and is located approximately 6.8 miles (11 kilometers) south of the Uaru-1 well. The total project cost is yet to be identified.

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• Builder, Esso Exploration and Production Guyana Limited (EEPGL), FPSO, oil, project

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