ExxonMobil now seeking insurance broker for 6th oil project after receiving permit

Apr 30, 2024 ExxonMobil, News, Oil & Gas

Guyana’s first Floating Production Storage and Offloading (FPSO) vessel, the Liza Destiny

Kaieteur News – ExxonMobil Guyana Limited (EMGL) is now searching for insurance brokers to provide an Insurance Programme for its sixth project in the Stabroek Block, the Whiptail development, after receiving regulatory approvals from the Government of Guyana (GoG).

The company recently issued a Request For Information (RFI) in this newspaper, outlining the company’s intent to establish an agreement for the provision of Insurance Brokerage Service for the Whiptail Development Insurance Program in the Stabroek Block, Guyana. The RFI process is used to seek input and develop a list of qualified bidders before structured bid rules take effect. ExxonMobil said in the RFI that the company in its sole discretion may divide the services described into several enabling agreements that may be awarded to more than one bidder.

According to the RFI, the oil company is looking to implement a ‘Property Damage (PD) Construction All Risk (CAR) program to include all Subsea, Umbilical, Riser, Flowlines (SURF), shore base construction and related assets for the Whiptail project; Operator’s Extra Expense (OEE) including control of well, redrilling/extra expenses, seepage and pollution, clean up and contamination exposures and General Third Party Liability (TPL) (including sudden and unforeseen pollution) covering, interalia, liabilities arising from all Whiptail Development exposures on an international basis.

For Property Damage and Third-Party Liability, insurance is expected to cover three consecutive periods: Project Period, Maintenance Period (12 months), and Discovery Period (12 months), all subject to the terms, conditions and exclusions to be agreed as part of the coverage.

Insurance provided to ExxonMobil must be procured from an Insurance Company or Companies with long term unsecured obligations rated at least ‘A-’ by Standard & Poor’s, ‘A3’ by Moody’s Investor’s Service, or ‘A-’ by AM Best.

ExxonMobil was officially given the green light for the project by the government on April 11, 2024. The company plans to produce approximately 250,000 barrels per day (bpd) by the end of 2027 at the Whiptail project. The development works are expected to cost some US$12.7B. Currently, three FPSOs – the Liza Destiny, Liza Unity and Prosperity – are operating offshore Guyana and are producing more than 640,000 barrels of oil per day. Construction is underway on FPSOs for the Yellowtail and Uaru projects, with Yellowtail anticipated to start production in 2025 and Uaru targeted in 2026. The sixth project will take Guyana’s total gross production approximately 1.3 million barrels of oil per day by 2027. Guyana’s oil has helped ExxonMobil to significantly grow its profits over the past few years. The company has increased daily production beyond the safety limits of the existing FPSOs with the blessings of the Government of Guyana (GoG) but remain reluctant to provide the nation with an unlimited parent company guarantee to protect the nation from the costs of an oil spill that would not be satisfied by the limited insurance.

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Approval, broker, ExxonMobil, Insurance, oil, spill

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