Exxon’s contractor profits jump 40% with new deal in Guyana’s 6th oil project

Apr 24, 2024 ExxonMobil, News, Oil & Gas

Italian-based Saipem was recently handed a US$1.5B contract for works on Exxon’s sixth oil project

Kaieteur News – As the ExxonMobil-led consortium continues doling out a steady stream of contracts for various components of the development of its oil fields in the Stabroek Block, it has been leading to ever increasing revenues for those companies.

One such company is Italian-based Saipem, which was recently handed a US$1.5B contract for an engineering, procurement, construction and installation (EPCI) contract for the Whiptail Development Project. Following that announcement last week, the company reported its first-quarter earnings on Monday, saying it had to adjust core earnings upwards to 40 percent, over the same period of last year, driven by growth at its offshore engineering and construction business.

According to Saipem, its adjusted core earnings increased to 268 million euros ($285 million) from 191 million euros in the same period of last year. Crediting its remarkable increase in earnings the company said, “its most significant new contract in the first three months of the year was the execution of the Whiptail oilfield development project for ExxonMobil offshore Guyana.”

Saipem’s latest contract worth up to $1.5 billion is for the supply of a subsea production facility for ExxonMobil’s Whiptail ultra-deepwater field development offshore Guyana. Two weeks ago, the U.S. supermajor took the final investment decision to develop Whiptail field, located on the prolific Stabroek block, which will exploit an estimated resource base of 850 million barrels of crude.

Saipem in making the announcement had said it has already started initial activities— the detailed engineering and procurement of long lead items for Whiptail and following FID, now has the issued authorisation to proceed with the execution of the remaining project activities.

The $1.5B contract is the second largest contract handed out by the ExxonMobil-led consortium in relation to the Whiptail Development Project. This past week, this publication reported that Dutch shipbuilder; SBM Offshore confirmed that it will be constructing Guyana’s sixth Floating Production Storage and Offloading (FPSO) vessel, Jaguar.

The vessel will be designed to produce 250,000 barrels of oil per day, and will have associated gas treatment capacity of 540 million cubic feet per day and water injection capacity of 300,000 barrels per day. The FPSO will be moored in water depth of about 1,630 meters and will be able to store around 2 million barrels of crude oil. To date, SBM has constructed four FPSOs for Guyana, including the Liza Destiny, Liza Unity, Prosperity and One Guyana. Exxon had recruited the services of Japanese ship builder, MODEC, for its fifth FPSO, Errea Wittu.

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contractor, Guyana, oil, profits, project

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