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Govt. gives Exxon permission in licence to increase oil production for 5th project
Kaieteur News – Guyanese authorities have provided ExxonMobil’s affiliate, Esso Exploration and Production Guyana Limited (EEPGL), along with its joint-venture partners, with the legal backing needed to increase oil production at its fifth project in the Stabroek Block.
According to the Petroleum Production Licence for the Uaru Development Project Project, local authorities have included a clause called: Production Optimisation Review. It states that EEPGL and its partners “shall facilitate and fully cooperate with reviews of production optimization reports for the Uaru Project.” It further notes that the first such review shall commence two years after start up. It also adds that the licensee shall meet with the Chief Inspector, at his request, to ensure any issues, concerns, and/or recommendations arising out of the review are complied with and/or addressed in a manner satisfactory to the Minister.
By requiring the review of these documents, government has in essence, given Exxon and its partners, permission to increase production, much in the same way that has obtained for the operations at the Liza Phase One and Two Projects. Both developments were designed to produce 120,000 barrels and 220,000 barrels of oil per day respectively. Government has however approved increased production at these projects by as much as 10 to 15 percent.
The Uaru project which is expected to produce 812 million barrels of oil equivalent resources in the initial 20-year licensed period through a total of 44 wells – 21 producers and 23 water and gas injectors, is expected to follow suit.
The floating, production, storage and offloading (FPSO) vessel, Errea Wittu, which will be built for Uaru by Japanese FPSO-building and operating company, MODEC, will produce 250,000 barrels of oil per day at peak production.
First oil is anticipated for the second quarter of 2027, thereby boosting Guyana’s overall production rate to over 1,100,000 barrels of oil per day.
Additionally, MODEC will now compete with SBM Offshore, the Dutch-based company responsible for the first four projects in the Stabroek Block. Notable changes in the FPSO design compared to previous projects include using a combined-cycle gas turbine for power generation and a closed-loop flare system, reducing greenhouse gas emissions from the project.
Certain conditions that are applicable to the Yellowtail project were excluded from the Uaru PPL since they were deemed to have been sufficiently addressed by the Yellowtail licence conditions. Similar to the Payara licence, the Uaru PPL boasts a Unit Development component, covering four of the Uaru field reservoirs that extend into the Liza production area.
The Natural Resources Ministry said last Friday that the Uaru project is budgeted to cost US$12.683 billion and is subject to cost recovery under the Stabroek Block Petroleum Sharing Agreement.
Importantly, the cost reporting condition was strengthened to include annual synergy reporting, acknowledging the shared facilities and personnel between these projects that result in cost savings. Additionally, a Capping Stack condition was included in this licence to ensure compliance with the commitment to have the Capping Stack in-country as required by the Yellowtail licence. In summary, the approval of the Uaru Field Development Plan and issuance of the Uaru Petroleum Production Licence marks the fifth approved production operation for offshore Guyana within the prolific Stabroek Block.
The Uaru project is expected to significantly contribute to Guyana’s oil production and highlights the benefits of leveraging similarities between black oil projects.
- Esso Exploration and Production Guyana Limited (EEPGL), oil, Petroleum Production Licence, Stabroek Block, Uaru Development Project
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