Govt. approves Exxon’s Hammerhead project

Sep 23, 2025 News

---

…no word on any additional fiscal benefits for Guyana

Kaieteur News – The Government of Guyana (GoG) on Monday announced the approval of a Petroleum Production Licence (PPL) for ExxonMobil Guyana Limited (EMGL’s) seventh development in the Stabroek Block, the US$6.8 billion Hammerhead project.

The announcement was made by the Ministry of Natural Resources in a statement on Monday morning. At the end of the review process of Exxon’s Hammerhead Field Development Plan (FDP) the ministry approved the FDP and issued the Hammerhead PPL.

The Stabroek Block which is estimated to hold 11.6 billion barrels of oil is operated by EMGL, who holds 45% interest. The other block partners Hess Guyana Exploration Ltd. holds 30% interest, and CNOOC Petroleum Guyana Limited holds 25% interest.

The Hammerhead development is located in the south-western portion of the Stabroek Block offshore Guyana and targets the Hammerhead reservoir. Hammerhead was announced as Exxon’s ninth commercial discovery in August 2018. The Hammerhead-1 well was drilled in a new reservoir, encountering approximately 197 feet (60 metres) of high-quality, oil-bearing sandstone reservoir. The well was safely drilled to 13,862 feet (4,225 metres) depth in 3,773 feet (1,150 metres) of water.

First oil from the Hammerhead project is expected by 2029. The project will use a Very Large Crude Carrier (VLCC) conversion-type Floating Production, Storage, and Offloading (FPSO), which will be built by Japanese shipbuilder, MODEC. Notably, a total of 445 million barrels of oil is forecast to be produced with an estimated daily production capacity of 150,000 barrels of oil per day (bpd). Hammerhead oil production will be facilitated through 10 production wells and 8 injection wells.

Hammerhead is expected to boost Guyana’s overall production capacity at approximately 1.5 million bpd, with the FDP projecting this by the second quarter of 2029.

Additionally, the ministry stated that the associated gas produced from the Hammerhead Project reservoir will be transferred to the Gas-to-Energy (GtE) pipeline network. Hammerhead is expected to boost energy security, drive industrial growth and create employment across various sectors, further positioning Guyana as a key player in the global energy landscape.

Notably, MNR said the Hammerhead PPL features notable improvements when compared to previous licences in several areas. “Some of these include its alignment with the Oil Pollution Prevention, Preparedness, Response and Responsibility Act 2025; improved management of production levels and new conditions to cover off-specification fluid discharges and the transfer of associated gas from the Hammerhead development to the Gas-to-Energy pipeline.

These enhancements reflect the government’s ongoing commitment to responsible resource management and sustainable development,” the ministry.

In April 2024, Exxon sanctioned its sixth project named Whiptail. Shortly after, Exxon began its work to seek regulatory approval for the Hammerhead project and earlier this year, the Environmental Impact Assessment (EIA) for the Hammerhead project was submitted to the Environmental Protection Agency (EPA). The company had also made a partial submission of the project’s FDP back in 2024.

Following the submission of an application for the Hammerhead project, Vice President Bharrat Jagdeo, the country’s chief policymaker on oil and gas was asked on multiple occasions whether improved fiscal terms would apply to ExxonMobil’s seventh development. Jagdeo’s most recent disclosure in April, he stated that a thorough assessment is being done and once completed, Guyanese would be informed of additional fiscal benefits.

Moreover, Hammerhead adds to the other six sanctioned projects under Exxon’s belt. These include, Liza One, Liza Two, Payara, Yellowtail, Uaru and Whiptail. The first four projects are already in operation, producing an average 650,000 bpd, with an installed capacity of 900,000 bpd. Construction is underway for the Uaru and Whiptail, with Uaru anticipated to start production in 2026, and Whiptail is anticipated for startup in 2027.

Earlier this year, Exxon also submitted an application for an eighth project, Longtail. The oil company is aiming to bring all eight developments into production by the end of the decade, targeting a combined output of 1.7 million bpd.

The agreement governing the Stabroek Block extends favorable terms to the oil companies. According to the agreement, Stabroek Block partners can recover 75% of oil produced to cover investment costs. The remaining 25% is considered profit and is split equally between Guyana and the consortium, giving each 12.5%. However, the consortium pays a 2% royalty from its share to Guyana. From Guyana’s 14.5% total take, the government must pay the oil companies’ taxes. The deal stipulates that the sum equivalent to the taxes owed by the companies must be paid by the Minister responsible for petroleum to the Commissioner General of the Guyana Revenue Authority (GRA).

Exxon

For their part, Exxon in a statement on Monday announced that it made a final investment decision for the Hammerhead development after receiving regulatory approvals.

“We continue to set a new standard in Guyana – advancing an impressive seventh project just 10 years after first discovery, said President of ExxonMobil Upstream Company Dan Ammann. “In collaboration with the people and Government of Guyana, we’ve helped build a thriving new oil-and-gas industry in the country that is creating jobs, supplier opportunities, profits and follow-on investments.”

Further it was disclosed that the final investment decision for the Hammerhead project increases funds committed for seven approved projects to more than US$60 billion. It was also stated that more than US$7.8 billion has been paid into Guyana’s Natural Resource Fund (NRF) since production in the Stabroek Block started in 2019.

The company also outlined that there are currently some 6,200 Guyanese working in support of Stabroek block operations, which is about 70% of the workforce. It was noted too that the Stabroek Block partners have spent more than US$2.9 billion with Guyanese suppliers since 2015.

---

• EMGL, Exxon, Hammerhead, oil, Petroleum Production Licence

---