4th oil project to begin pumping soon

Jul 04, 2024 News

The fourth FPSO, ‘One Guyana’ is being constructed by Dutch shipbuilder, SBM Offshore

…as ExxonM expected to conclude installation activities in September

Kaieteur News – Guyana’s fourth oil project, Yellowtail could see first oil ahead of its initial 2025 startup. ExxonMobil Guyana Limited (EMGL) the operator of the oil-rich Stabroek Block is currently engaged in installation activities offshore to support the deep-water project.

The activity is expected to conclude on September 30, 2024, the Maritime Administration Department (MARAD) informed in an advertisement published in this newspaper on Wednesday.

According to the Notice, Exxon is utilizing the OSV Normand Installer vessel, in the area situated approximately 107.4 nautical miles (198.9 kilometers) off the Coast of Guyana and covers an area of 25.4 square nautical miles (87.4 square kilometers).

Chief Operating Officer (COO) for Hess Corporation, Greg Hill had informed shareholders that the project was running way ahead of schedule.

Yellowtail would be the largest oil project to come on stream since the country commenced production activities in 2019. The Yellowtail project will be operated by the ‘One Guyana’ Floating, Production, Storage and Offloading (FPSO) vessel, designed by Dutch shipbuilder, SBM Offshore, to produce 250,000 barrels of oil per day (bpd).

Kaieteur News previously reported that the project will develop approximately 925 million barrels offshore by drilling approximately 45 to 67 development wells (including production, water injection, and gas re-injection wells). Production will continue for 20 years.

The US$10B project received government’s blessings on April 1, 2023.

By 2027, Exxon will be producing 1.3 million bpd. Three FPSOs, the Liza Destiny, Liza Unity and Prosperity are producing approximately 640,000 bpd. This means that the fourth project will increase daily capacity to almost 900,000 bpd.

Two other projects, Uaru and Whiptail, the fifth and sixth projects respectively have also been sanctioned by the government. These developments are being designed to each produce 250,000 bpd and are likely to come on stream by 2026 and 2027 respectively.

Although Guyana’s increased oil production has enlisted the country as the world’s fastest growing economy, citizens have been complaining that the wealth generated from the sector has not been trickling down to improve their lives.

The lopsided 2016 Production Sharing Agreement (PSA) Guyana signed with ExxonMobil, Hess and CNOOC has been criticized as the deal does not ensure Guyanese benefit from a fair share of their resources.

According to the contract, Exxon can deduct up to 75% of the monthly revenues earned to repay their investments in the Stabroek Block. The remaining 25% is then shared with Guyana as profits. The country also receives a meager 2% royalty.

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