Exxon looking to buy two more FPSOs from owner by year-end

Aug 10, 2024 News

FPSO Prosperity

Kaieteur News – ExxonMobil Guyana Limited (EMGL) is now looking to purchase the other two Floating Production Storage and Offloading vessels (FPSOs) Prosperity and Liza Destiny that are operating offshore Guyana in the prolific Stabroek Block.

EMGL currently has three FPSOs operating offshore. The three vessels were contracted from Dutch ship-builder SBM Offshore and leased from the company. Last year Exxon purchased one of the vessels and is now gearing up to purchase the other two. SBM made the announcement on Thursday. According to SBM, ExxonMobil Guyana has indicated that it is contemplating the exercise of its contractual purchase option to acquire FPSOs Prosperity and Liza Destiny in the second half of 2024, ahead of the end of the maximum lease terms in November 2025 and December 2029 respectively.

The Liza Destiny was built to the tune of US$1 billion while FPSO Prosperity costs approximately US1.6 billion. “Should the purchase of FPSOs Prosperity and Liza Destiny occur in 2024, the guidance will be revised accordingly once the final details of the purchase are confirmed,” the company stated.

First oil was on December 20, 2019 at the Liza Destiny. The vessel was designed to produce some 120,000 barrels of oil per day with a storage capacity of 1.6 million barrels. After debottlenecking activities, Exxon increased this to 150,000 barrels per day.

FPSO Prosperity is designed to produce 220,000 barrels of oil per day, with an associated gas treatment capacity of 400 million cubic feet per day and a water injection capacity of 250,000 barrels per day. It will be spread moored in a water depth of about 1,900 meters and will be able to store around 2 million barrels of crude oil. The vessel, which measures 342M in length, 60m in width, and 25m in height, has a minimum lifespan of 20 years. Roughly 4,000 persons have been working on the FPSO which weighs 110,000 metric tonnes.

FPSO Destiny

To date, SBM projects in Guyana, includes FPSOs Liza Destiny, Liza Unity, Prosperity, and the upcoming ONE GUYANA. Exxon had recruited the services of Japanese ship builder, MODEC, for its fifth FPSO, Errea Wittu. However, back in April, SBM had announced that it secured a contract with EMGL to build and install Guyana’s sixth FPSO Jaguar, the Whiptail development.

Kaieteur News had reported that last year, EMGL purchased Liza Unity last year for the sum of US$1.3 billion. SBM had said the purchase occurred a few months ahead of the end of the maximum lease term, in February 2024. SBM said the purchase allows ExxonMobil Guyana to assume ownership of the unit while SBM Offshore will continue to operate and maintain the FPSO up to 2033. That transaction comprises a total cash consideration of US$1.26 billion. The net cash proceeds will primarily be used for the full repayment of the US$1.14 billion project financing and as such will decrease SBM Offshore’s net debt position.

SBM said via a statement that the Liza Unity had been on hire since February 2022 and up to 2023 it was operated through the integrated operations and maintenance model combining SBM Offshore and ExxonMobil’s expertise and experience to deliver outstanding operational performance.

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Exxon, ExxonMobil Guyana Limited (EMGL), FPSOs, owner, year-end

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