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Exxon awards US$150M contract for eighth project not yet approved by Govt.
…full contract to value between US$750 million and US$1.5B
(Kaieteur News) – ExxonMobil Guyana Limited (EMGL) has moved to award a new Limited Notice to Proceed (LNTP), worth around 150 million USD to Italian firm Saipem for the engineering, procurement, construction and installation (EPCI) of the subsea structures, umbilicals, risers, and flowlines (SURF) system for the Longtail project, yet to be approved by the Government of Guyana (GoG).
Longtail is the eighth project Exxon plans to develop in the Stabroek Block offshore Guyana, at a water depth of approximately 1,750 metres.
ExxonMobil Guyana Limited (EMGL) Alistair Routledge
The LNTP allows Saipem to commence preliminary detailed engineering and procurement activities. According to the company, execution of the main EPCI scope (including construction and installation activities) is subject to the receipt of the necessary governmental and regulatory approvals, as well as the Final Investment Decision (FID) by Exxon and its co‑venturers in the Stabroek Block.
“Once approved, the full contract will have an expected duration of around four years and an estimated overall value of between $750 million and $1.5 billion USD,” Saipem said.
Saipem has operated in the Stabroek Block for ExxonMobil Guyana under seven offshore development contracts, four of which have already been completed, namely Liza Phase 1, Liza Phase 2, Payara, and Yellowtail. EMGL has already disclosed that it hopes of securing regulatory approval by the end of 2026 for the Longtail project.
Notably, this is not the first time Exxon has issued contracts before the project is approved by the Guyanese government. In fact, just recently Exxon released payments to Dutch shipbuilder, SBM Offshore for an eight Floating Production, Storage and Offloading vessel (FPSO) for the Longtail project.
SBM had explained that further construction and installation activities for the FPSO will be conducted after government signals its approval for Exxon’s development plan and the final investment decision by the company. The award of a US$150 million contract to Saipem, will drive up the cost bank which Exxon said Guyana will pay off by the end of this year given the high prices of oil. This publication had reported President of EMGL, Alistair Routledge said, “We were anticipating sometime next year in 2027 that we were going to get to the point where we had recovered those historic cost… what we are now seeing in this price environment is that it will accelerate.” So far, ExxonMobil has expended U.S.$40B to develop the seven oil projects approved to date. Currently, U.S.$5B remains in the cost bank to be recovered by the company.
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