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Exxon to start spending on 8th project next month without approval from Govt.
(Kaieteur News) – ExxonMobil Guyana Limited (EMGL) plans to start engineering and procurement activities in the second quarter of this year for its eight deepwater project, Longtail which is yet to be approved by the government of Guyana.
According to the preliminary project schedule submitted by Exxon to the Environmental Protection Agency and included in the company’s Environmental Impact Assessment (EIA), Longtail is expected to startup in 2031.
The revelation comes even as Exxon’s Country Manager said on Thursday that Guyana will be able to clear all expenses currently in the cost bank. He said that US$5B is left to be recovered.
Another new project will however add more expenses to the cost bank which further impact the country and delay increased revenue would flow to the Natural Resource Fund (NRF).
Under the 2016 Production Sharing Agreement (PSA) Exxon is allowed to take 75% of revenue to cover expenses for its Stabroek Block operations. This will continue until Guyana clears all costs owed to the company.
Until such time, Guyana will receive 12.5% profit and 2% royalty. After clearing all expenses, Guyana can receive 50% or half of all the oil produced after operations and maintenance cost is deducted.
Exxon’s project schedule (source: Longtail EIA)
Longtail plans
The EIA explained that Exxon plans to drill approximately 24 to 60 development wells, with development well drilling scheduled to begin in 2027 and possibly extending as late as 2031 and beyond. It said installation of subsea components is slated to commence in 2028 with installation of the Floating Production Storage and Offloading vessel (FPSO), commissioning and startup planned to occur from 2028 to 2031.
Longtail is expected to continue for at least 30 years according to the project schedule. Unlike previous developments focused primarily on oil, Longtail will focus on gas production. It will produce hydrocarbons from the non-associated gas fields and potential proximal resources according to the EIA.
The FPSO is being designed to produce 250,000 barrels of condensate per day (bpd) with a gas production capacity of 1,200 million standard cubic feet per day (MMscf/day). BlackRock Midstream describes condensate as extremely light oil.
The FPSO is being specially designed to accommodate future gas export capabilities. The EIA explains, “The FPSO will be designed to separate the recovered reservoir fluids into water and gas phases. The condensate will be treated to remove impurities (e.g., sulphate and other salts) and then sent to storage tanks in the hull.”
The water from the reservoir (referred to as produced water) will be treated to remove hydrocarbons and then discharged to the sea, while non associated gas from the separation and treating process will be compressed and dehydrated to provide fuel gas to the FPSO, and the remaining balance will be returned to the reservoir through reinjection wells.
The vessel will feature three riser slots, reserved topsides space and weight capacity for additional equipment, and detailed facility designs that anticipate future gas export operations. “The integrated design of the FPSO and the SURF system enables flexible gas export to multiple potential destinations and at varying rates. As the market for gas export matures, the produced gas remains available for export. The FPSO will also have the capacity to treat (by filtration, deaeration, and sulphate removal) seawater for facility cooling purposes,” Exxon explained in its study.
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