IEA predicts Exxon will secure approval for 7th project by next year

Jun 25, 2024 News

Kaieteur News – The International Energy Agency (IEA) in a new report has predicted that United States oil major, ExxonMobil, will secure approval from the government of Guyana (GoG) for a seventh deep-water project in the Stabroek Block by 2025.

ExxonMobil Guyana Limited President, Alistair Routledge

According to the report Oil 2024, the project, Fangtooth could add 220,000 barrels of oil per day (bpd) to the country’s production capacity. The IEA also estimated that first oil from the seventh project could flow as early as 2029.

Furthermore, to meet the government’s target of 1.3 million barrels of oil per day by 2027, the report said an eight development could also be sanctioned the following year (2026). The project could add another 220,000 bpd by 2030.

Notably, concerns were previously raised by stakeholders regarding the swift approval of oil projects and Field Development Plans (FDPs) by the GoG. The fast tracking of the approval process not only puts the environment at risk but also allows for higher project cost, by failing to properly scrutinize FDPs.

Presently, ExxonMobil Guyana Limited (EMGL) has three Floating Production Storage and Offloading (FPSO) vessels in Guyana’s Stabroek Block. The company has received regulatory approvals for six deep-water projects to date.

ExxonMobil said it anticipates six FPSOs will be in operation on the Stabroek Block by year-end 2027. Already preparations are ongoing for startup of Yellowtail and Uaru, the fourth and fifth projects, which will each produce approximately 250,000 barrels of oil per day. Yellowtail is posed for startup in 2025 while Uaru is expected to come on stream by 2026.

The Stabroek Block is 6.6 million acres, where to date over 38 commercial discoveries have been made. It is estimated to contain more than 11 billion barrels of oil. ExxonMobil Guyana Limited is operator and holds 45 percent interest in the Stabroek Block. Hess Guyana Exploration Ltd. holds 30 percent interest and CNOOC Petroleum Guyana Limited holds 25 percent interest.

The PPP/C Government has made it clear that it plans to embark on a number of measures that will keep the oil industry on the fast track for a minimum of 15 years. This was revealed by Vice President, Bharrat Jagdeo.

The official said such an approach would include the timely award of production licences as well as encouraging investment in the sector. Given the pace at which discoveries are being made in the Stabroek Block, and the overall speed of development activities, Jagdeo said it is critical that the government adopts a complementary approach to ensure local and foreign businesses are not left with stranded investments.

The Vice President said, “All that we are doing is to sustain the level/ (momentum) and we will do so aggressively and unashamedly to sustain high levels of activity for a minimum of 15 years. That means licencing new FPSOs (Floating, Production, Storage and Offloading vessels), consistently encouraging investment, going out, as we have done, to an auction in a manner that could potentially have a minimum of five different investors in the basin.”

Jagdeo was also keen to note that government is not unmindful of the debate taking place globally about the need to reduce carbon emissions to save the planet. He said the administration subscribes to that philosophy. He stressed however that the transition from fossil fuels to renewables has to be just and in a sustainable manner. He said, unreservedly, that the government will not succumb to the jaundiced calls of certain detractors to shut down the industry. In closing, he said government will continue to defend the country’s right to develop its resources. The official also called for there to be a deepening of the analytical views that make their way into the media.

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ExxonMobil, IEA, oil, project, seventh

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