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Guyana paying US$3M per day to rent six drill ships for Exxon’s operations – Upstream President says
One of Noble drill ships working offshore
Kaieteur News – Liam Mallon, ExxonMobil Upstream President yesterday disclosed that ExxonMobil Guyana Limited (EMGL) is operating six drill rigs in the Stabroek Block daily costing US$500,000 (GYD$100M) per day based on current market-rate.
Liam Mallon, ExxonMobil Upstream President
It was during his address at the opening of the 2024 Guyana Energy Conference and Supply Chain Expo when Mallon made the disclosure. “Meanwhile, we talked a lot about the source of the revenue, six drilling rigs and their crews are at work every single day 24/7 throughout the block, drilling and exploring, preparing yellowtail and Uaru for startup tirelessly developing the existing resource base and seeking to find even new discoveries,” Mallon told the conference.
The Yellowtail and Uaru projects were already approved and are expected to achieve first oil in 2025 and 2026. This publication had previously reported that Exxon is utilising six drill ships for its Stabroek Block project – four vessels from American drilling company Noble Corporation and two from Stena Drilling.
A 2023 report by Wood Mackenzie, a global research and consultancy group, had shown that rig utilisation returned to pre-COVID levels, driving rates up. Wood Mackenzie had reported that by the end of 2023 rates were expected to be at US$500,000/day or above for highly-prized, advantaged ultra-deepwater rigs.
Notably, owing to the 2016 Production Sharing Agreement (PSA) Guyana signed onto with Exxon – all of the company’s expense will be recovered. Under the deal, Exxon receives profits after 75 percent is withdrawn to cover operational expenses.
Kaieteur News had reported that for every day that the four drill ships work, Guyana will have to foot the bill. In May 2023, Noble announced that ExxonMobil Guyana has extended their contract for the rental of the ultra-deepwater drill ships Noble Tom Madden, Noble Sam Croft, Noble Don Taylor and Noble Bob Douglas to work in Guyana at an average day rate of about US$420,000 (GYD$84 million) for each – until second quarter of 2027. Notably, Noble had explained that market-based day rates are reset twice per year (March 1, and September 1) to the projected market rate at that time.
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