Sat. May 18th, 2024

Exxon to Invest Nearly $13bn in Sixth Project Offshore Guyana

ExxonMobil’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL) has furnished the Environmental Protection Agency (EPA) with an Environmental Impact Assessment (EIA) for its sixth project, set to cost US$12.9B.

The document comprising 3636 pages provides a comprehensive outlook of how the project will be established in the Stabroek Block, along with the range of social and environmental impacts it is likely to have.

The report which is now available for public review and commentary for a 60 day period, notes that oil will be produced from the Whiptail, Pinktail, and Tilapia fields of the Stabroek Block. These fields are approximately 1,500 to 2,200 meters deep.

The project will see the development of multi-million barrels of oil resources by drilling approximately 33 to 72 development wells (including production and water/gas injection wells). It will also see the installation of a Floating Production, Storage, and Offloading (FPSO) vessel to process, store, and offload the recovered oil. Currently, the FPSO’s basic design has an upper production limit of 263,000 barrels per day (bpd).

For the purposes of the EIA, the document states that production of up to 300,000 bpd is considered to assess potential impacts from the project and cover potential production optimization after facility start-up. If during the detailed design stage or during production operations an opportunity to expand the upper production limit arises, the EIA states that the project will document the evaluation and justification and an updated upper production limit will be available.

EEPGL estimates the project will require a workforce of approximately 540 persons at the peak of the development well drilling, and approximately 100 to 180 persons at the peak of production operations (with an additional 25 to 30 personnel on board each export tanker).

A map from the EIA showing the location of the Whiptail Project offshore Guyana

Notably, EEPGL estimates that drilling the approximately 33 to 72 wells is expected to commence in late 2024/early 2025 through mid-2030 (but could extend as late as 2031). Installation of subsea components is planned to begin in the second half of 2025 or early 2026. The FPSO installation, commissioning, and start-up are planned to occur in 2027. Overall, the project is expected to continue for at least 20 years.

Furthermore, the EIA states that the Whiptail field contains substantial quantities of associated gas. EEPGL said a study was therefore conducted to determine its best use. It was noted in the report to the EPA that gas re-injection was evaluated as an option to maintain reservoir pressure and improved oil recovery. The report states that this alternative was selected because it provides greater efficiency than water injection alone and will increase the amount of crude oil that can be recovered over time.

Under this alternative, EEPGL said associated gas that is not used as fuel gas on the FPSO will be re-injected in support of normal operations, which results in lower air emissions than the continuous flaring option. It further noted that a gas export study was conducted for the Whiptail Project to evaluate the impact gas exports would have on oil production forecasts and estimated ultimate recovery. EEPGL said the results from the study indicate that any reduction in injected gas would result in reduced oil recovery. For this reason, the current development plan does not include gas exports.

EEPGL is the designated Operator of the Stabroek Block under a Petroleum Agreement signed by the subsidiary and a consortium that includes Hess Guyana Exploration Limited and CNOOC Petroleum Guyana Limited. The Petroleum Agreement covers approximately 26,806 square kilometers and was executed together with a Petroleum Prospecting License for the Stabroek Block.

EEPGL has previously planned and obtained approval from the Government of Guyana for five development projects in the Stabroek Block—the Liza Phase 1 Development Project, Liza Phase 2 Development Project, Payara Development Project, Yellowtail Development Project, and Uaru Development Project. Collectively, these five projects are worth over US$41B. According to the terms of the petroleum agreement signed between the oil companies and Guyana, all investments will be recovered using Guyana’s oil.

The Liza Phase 1 and Liza Phase Two Projects are already in operation, producing some 400,000 barrels of oil per day.

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