Latest update August 31st, 2024 12:59 AM
Jan 12, 2022 News
…despite no EPA, FDP approvals
Kaieteur News – Less than a week ago, the Government of Guyana issued a tender, inviting qualified consultancy firms to submit their technical and financial proposals to review the Field Development Plan (FDP) for ExxonMobil’s US$9B Yellowtail Project. But before the government could even have an opportunity to scrutinise some of the applications received or even provide an environmental permit for the project, ExxonMobil is already steaming ahead with the award of more multi-million dollar contracts to ensure its 2025 startup timeline is not derailed for any reason.
On Tuesday, Italian contractor, Saipem announced that it won a contract from Esso Exploration and Production Guyana Limited (EEPGL), a subsidiary of ExxonMobil, for the Yellowtail development project. Saipem said the contract relates to the Engineering, Procurement, Construction, and Installation (EPCI) of the Subsea Umbilicals, Risers and Flowlines (SURF). Further to this, the company said Saipem’s flagship vessel FDS2 will conduct the offshore operations while Saipem’s fabrication facility in Guyana will build the deepwater structural elements.
Francesco Caio, CEO and General Manager of Saipem, commented, “The recently opened Saipem fabrication facility in Georgetown will be involved in the execution of the Yellowtail project, ensuring a positive and tangible impact on the country”.
The first contract that was awarded for Yellowtail occurred in November 2021. SBM Offshore had announced that it had been awarded contracts to perform Front End Engineering and Design (FEED) for a Floating Production, Storage and Offloading vessel (FPSO) for the Yellowtail development project. The FEED contract award triggered the initial release of funds by ExxonMobil’s subsidiary to begin FEED activities and secure a Fast4Ward® hull.
The Dutch company said as well that it will construct, install then lease the FPSO and operate it for a period of up to 2 years to Exxon.
TRILLION DOLLAR PROJECT
Kaieteur News previously reported that development costs for the Yellowtail project are poised to exceed US$9B or GY$1.8 trillion.
ExxonMobil said the costs are expected to be higher, since there would be a greater number of development wells and associated drilling costs, when compared to its Payara project which will also cost Guyana $1.8 trillion.
Despite the astronomical costs, Exxon believes that the project should be supported as it would generate benefits for the citizens of Guyana in several ways, which would otherwise not be there in the absence of the project.
The company said these benefits include revenue sharing with the Government of Guyana and stressed, that the type and extent of the benefits associated with revenue sharing will depend on how decision-makers in government decide to prioritise and allocate funding for future programmes, which is unknown to the company and outside the scope of the EIA.
Apart from the revenue sharing, Exxon said Guyanese stand to benefit from the procurement process that will follow for goods and services from local businesses in alignment with the Petroleum Agreement and the Esso Exploration and Production Guyana (EEPGL)—ExxonMobil Guyana—Local Content Plan, approved by the Ministry of Natural Resources in June 2021.
According to project document, Yellowtail will consist of drilling approximately 41 to 67 development wells; installation and operation of Subsea, Umbilicals, Risers, and Flowlines equipment; installation and the operation of a Floating Production Storage and Offloading (FPSO) vessel in the eastern half of the Stabroek Block; and— ultimately—project decommissioning.
The FPSO will be designed to produce up to 250,000 barrels of oil per day. The initial production is expected to begin by the end of 2025–early 2026, with operations continuing for at least 20 years.
The project is expected to employ up to 540 persons during development well drilling, approximately 600 persons at the peak of the installation stage, and 100 to 140 persons during production operations.
Mineral and oil rich country borrowing to feed, clothe and house its citizens.
Aug 31, 2024
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