Exxon’s ship builder says pace of Guyana oil sector vital to company

Oct 24, 2024 News

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Kaieteur News – The rapid pace at which ExxonMobil Guyana Limited (EMGL) and the Government of Guyana (GoG) have advanced oil projects in the Stabroek Block has been crucial to the success of Dutch shipbuilder, SBM Offshore the world’s undisputed leader in floating production, storage and offloading vessels (FPSOs).

In a recently aired interview by OilNow, SBM’s Chief Executive Officer (CEO) Øivind Tangen emphasised, “I think the pace of the development in Guyana, and this is very much also, you know, driven by Exxon and how projects have come to investment decisions very fast, coincided with our Fast4Ward programme and us always wanting to be, you know, anticipating the next prospects.”

Tangen noted that the speed of Guyana’s development has been an eye-opener for many other countries, whether they are newly discovering oil or are established oil producers. He explained that Guyana is showing the world a different approach that can significantly shorten the time between discovery and first oil. “And even how you go from first oil to, let’s call it, plateau production,” he added.

The SBM Offshore CEO highlighted the synergy between ExxonMobil, the Government of Guyana, and SBM’s Fast4Ward programme. He explained that the convergence of these factors has allowed for an effective partnership that has had a major impact on SBM’s marketing and positioning in other growing oil and gas markets.

“So I think it’s been fundamental to SBM, you know, the fact that Fast4Ward and Guyana discovery coincided, and with the development pace driven by, you know, let’s call it field development teams, Exxon and the government of Guyana, has allowed the kind of a perfect combination of parameters coming together that has been very powerful,” Tangen said.

He further noted that Guyana could serve as a reference point for other companies, signaling that it may be time to reconsider the traditional approach to field development. “Be open-minded, to change the pace,” he added.

Regarding SBM’s Fast4Ward program, Tangen underscored the company’s confidence in the FPSO product and the certainty in execution, which enables SBM to manage capacity and execute engineering, procurement, and construction (EPC) faster than competitors. “But more importantly, it’s a philosophy that needs to be deployed at a country level, and through the developing oil company and the whole ambition they set around a pace of development that also would favour, you know, the value proposition of SBM. So I think it’s been an eye opener, and you can see a lot of people look to Guyana as a reference for that. So it’s, let’s say, it shook the industry up a bit,” Tangen concluded.

Last month, this publication reported that Guyana has been a dream scenario for SBM Offshore. This was revealed by Tangen in an exclusive interview with Upstream, an online source for independent news and analysis of the major oil and gas projects.

In an article, Upstream reported that the company is reaping the rewards of its forward thinking and outstanding project execution, while its new chief executive intends to keep the company well ahead of its peers.

Tangen said, “Guyana so far has just been a fairytale, and it happened at about the same time as we launched our Fast4Ward programme, and that positioned us well for a series of Petrobras projects as well.”

Fast4Ward is the ground-breaking design that SBM came up with in 2012 tailored for benign ultra-deepwater settings like Brazil and Guyana, and which SBM was able to replicate in stunning fashion, with a standardisation philosophy and with repeat subcontractors and vendors, all supported by its two principal customers ExxonMobil in Guyana and Petrobras in Brazil.

Next year, there will be 19 active SBM floaters around the world producing about 2 million barrels per day of oil of which seven will be Fast4Ward designs. The company has already ordered the eighth and ninth hulls.

Two Fast4Wards are operating for ExxonMobil in Guyana and two more are being built.

SBM was contracted by Exxon, the operator of Guyana’s prolific Stabroek Block, to construct five of the six FPSOs sanctioned to date. The Liza Destiny, Liza Unity and Prosperity FPSOs have been delivered and are operating, while the fourth FPSO, One Guyana is scheduled to arrive next year. SBM also secured a contract to construct the FPSO for the sixth project, Whiptail. To this end, the Jaguar FPSO is expected to commence production by the end of 2027.

Tangen told Upstream that ExxonMobil continues to set the benchmark, with decisions to own the FPSOs in Guyana. The CEO said this provides SBM with significant early cash followed by the revenue from a long-term Operations and Maintenance (O&M) contract. Exxon has stated that it will have six FPSOs in operation in Guyana by the end of 2027. “We are in a very good dialogue with Exxon and they know when it’s a good fit for SBM and themselves, where we unlock value together, that’s normally where we find the opportunities to move forward together,” Tangen said.

 

(Exxon’s ship builder says pace of Guyana oil sector vital to company)

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• Exxon, FPSO, OilNOW, SBM, Stabroek Block

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