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Exxon shipbuilder records 271% profits increase in first quarter of 2024
Kaieteur News – Japanese Floating Production Storage and Offloading (FPSO) builder, MODEC on Tuesday announced a 271.7% increase in operating profits for the first quarter of 2024 – when compared to the same period in 2023.
MODEC Chief Executive, Hirohiko Miyata
Last year, MODEC was contracted by ExxonMobil Guyana Limited (EMGL) to construct the fifth FPSO (Errea Wittu) for the Uaru development in the Stabroek Block.
This is MODEC’s first project in Guyana and it represents a significant addition to the company’s portfolio. In fact, it is MODEC’s largest Engineering, Procurement, Construction, and Installation (EPCI) contract.
According to MODEC, for the three months ended as of March 31, 2024, the total orders on a consolidated basis resulted in US$233.3 million, slightly lower than the US$239.6 million recorded in the first quarter of 2023, due to the variation orders of FPSO construction projects. However, the company disclosed that the consolidated revenue was US$822.8 million, which is more than the $744.9 million recorded in the same period last year. The company attributed this to the progress in the construction of FPSOs.
The company stated, “While coexisting with the trend toward decarbonization, maintaining a stable energy supply remains an important issue, and oil companies continue to pursue projects to develop deepwater oil fields. Demand for the Group’s main business related to floating offshore oil and gas production facilities especially for large-scale ultradeepwater projects, in which the Group has a competitive advantage, has also remained firm.”
In terms of profit, MODEC said its operating profit was US$76.8 million, a significant increase from the operating profit of US$20.6 million recorded in the first quarter of 2023. The company explained that this is due to the recognition of revenue from the steady progress of construction projects and share of profit of investments accounted for using equity method from the stable charter business.
Last year, MODEC earned some US$823 million from the Exxon contract.
Construction on the Errea Wittu FPSO commenced earlier this year. The vessel is scheduled for first oil in 2026. The FPSO will be designed to process approximately 250,000 barrels of oil per day (bpd), it also has the capacity for gas treatment (540 million cubic feet per day), water injection (350,000 barrels per day), and handling produced water (300,000 barrels per day).
Notably, MODEC will also provide the operation and maintenance services for this unit at least 10 years from its first oil production. MODEC said it is solely engaged in construction of floating, production, storage and offloading systems for oil and gas productions and various related services as single business. Last year the company earned a total of US$3.6 billion.
- and Installation (EPCI), Construction, engineering, Hirohiko Miyata, MODEC Chief Executive, procurement
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