Govt. gives Exxon leeway in licence to change costs, development plan for US$10B Yellowtail Project

May 24, 2022 News

By Kiana Wilburg

Kaieteur News – It appears that the Government of Guyana has given ExxonMobil’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL), enough leeway to change as it deems necessary, costs as well as the already approved development plan for the US$10B Yellowtail Project in the Stabroek Block.

Map showing the location of the Yellowtail field

According to the provisions of the Petroleum Production Licence (PPL) that was awarded on April 1, 2022, “The Licensee may, with the written approval of the Minister, amend the Development Plan with respect to work and expenditure contained in the Development Plan, but the amendment shall not have effect so as to reduce any minimum requirements.”
It noted further that, “Unless the Minister has approved any such amendment, expenditures made to carry out operations to implement the amendment will not be cost recoverable.”
The PPL states as well that EEPGL shall carry out all activities under this Licence in keeping with good international oilfield practice and in compliance with the nation’s outdated oil laws, the lopsided Stabroek Block Petroleum Agreement, the Development Plan, and any other law or instrument or agreement with the Government to which the licence may be subject, as may be amended, enacted or modified from time to time.
The foregoing is listed under “Duties of the Licensee” in the PPL.
Kaieteur News previously reported that the project will develop approximately 925 million barrels offshore by drilling approximately 45 to 67 development wells (including production, water injection, and gas re-injection wells) and using a Floating Production, Storage, and Offloading (FPSO) vessel to process, store, and offload the recovered oil.
The FPSO will be connected to the wells via associated equipment, collectively referred to as Subsea, Umbilicals, Risers, and Flowlines (SURF) to transmit produced and associated fluids (i.e., oil, gas, and produced water) from production wells to the FPSO, as well as treated gas and water from the FPSO to the injection wells.
It should be noted that the exact locations of the Yellowtail development wells have not yet been finalised; however, the wells will be drilled from six drill centres.
Additionally, natural gas will be produced in association with the produced oil. EEPGL will use some of the recovered gas as fuel on the FPSO and proposes to re-inject the remaining gas back into the reservoir, which will assist in optimising management of the reservoir. Alternative uses of gas for future phases are being studied and any such uses would be addressed in an environmental impact assessment.

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