Exxon gives ship builder US$3 billion contract to operate, maintain FPSOs

May 03, 2023 ExxonMobil, News, Oil & Gas

…CEO boasts of “one of its kind” contract

Kaieteur News – Dutch ship builder, SBM offshore on Tuesday morning announced that it has signed a “one of its kind” contract to operate and maintain four Floating Production Storage And Offloading (FPSO) vessels for ExxonMobil’s Guyana operations.

The Netherlands-based company announced the Operations and Maintenance Enabling Agreement was signed with Esso Exploration & Production Guyana (EEPGL) to operate and maintain FPSOs Liza Destiny, Liza Unity, Prosperity and ONE GUYANA. SBM Offshore has secured multiple contracts over the years for Exxon’s Guyana operations, which includes the four aforementioned FPSOs.

According to the company, while this framework agreement establishes the new terms related to the operations of the Guyana FPSO fleet for a period of 10 years up to 2033; the lease terms and durations remain the same for all units, with 10 years lease for FPSO Liza Destiny and up to 2 years lease for FPSOs Liza Unity, Prosperity and ONE GUYANA after which the FPSOs’ ownership will transfer to the client.

ExxonMobil Guyana is the operator of Guyana’s lucrative Stabroek Block which has over 11 billion proven barrels of oil. Recently, it was announced that Guyana’s Environmental Protection Agency (EPA) granted the Environmental Permit for ExxonMobil’s fifth project at the Uaru field in the Stabroek Block which has been approved. The Uaru project is expected to cost US$12.7B and produce about 250,000 barrels of oil per day after coming on stream in 2026.

“This contract supports SBM Offshore’s long-term business vision in Guyana enabling the Company to perform local and sustainable investments in people and infrastructure as well as to deploy its digital and operational technologies to the Guyana fleet,” the company said in a statement adding that the estimated impact on the revenue backlog is around US$3 billion based on various operating and maintenance assumptions.

It was explained that SBM will operate the units through an Integrated Operation Model, which encompasses an organization model including seconding ExxonMobil Guyana employees in some key onshore and offshore positions. This model will combine SBM Offshore and ExxonMobil Guyana’s experience and resources to increase team efficiency and foster synergies between the two companies.

For his part, Chief Executive Officer (CEO) of SBM Offshore Bruno Chabas, said “We are very pleased with the contract concluded with ExxonMobil Guyana leveraging both companies’ recognized operating excellence. This contract capitalizes on our developments in Guyana to date, positioning the Company for long-term operations in the country.” He continued: “This Integrated Operation Model is the first of its kind in the industry and extends our relationship with ExxonMobil Guyana by integrating further our teams. We believe it is the optimal solution to achieve excellence in the operation of Guyanese assets bringing value to all stakeholders and setting a new performance benchmark for the industry.”

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Floating Production Storage and Offloading (FPSO), Guyana, Liza Destiny, Liza Unity, Prosperity

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