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ExxonMobil extends contract for four drill rigs costing Guyana around US$2M daily
One of the Noble Drill Ships working for Exxon offshore Guyana
Kaieteur News – ExxonMobil Guyana Limited (EMGL) has extended its contract with American offshore drilling company Noble Corporation for four of its drill ships to work in the Stabroek Block.
According to Noble, ExxonMobil has awarded 4.8 additional rig years of backlog under the Commercial Enabling Agreement (CEA) which has been assigned evenly across the four drill ships: Noble Tom Madden, Noble Sam Croft, Noble Don Taylor and Noble Bob Douglas, extending each rig’s contract duration from June 2027 to August 2028.
In May 2023, Noble announced that ExxonMobil Guyana had extended their contract for the rental of the four ultra-deep-water drill ships to work in Guyana until second quarter of 2027.
Notably, Noble had explained that market-based day rates are reset twice per year (March 1, and September 1) to the projected market rate at that time.
This publication had previously reported that Exxon is utilising six drill ships for its Stabroek Block project – four vessels from A Noble and two from Stena Drilling.
Earlier this year, Liam Mallon, ExxonMobil Upstream President disclosed that EMGL is operating six drill rigs in the Stabroek Block daily costing an average of US$420,000 (GYD$84 million) to US$500,000 (GYD$100M) per day for each ship, based on current market-rate.
It was during his address at the opening of the 2024 Guyana Energy Conference and Supply Chain Expo when Mallon made the disclosure. “Meanwhile, we talked a lot about the source of the revenue, six drilling rigs and their crews are at work every single day 24/7 throughout the block, drilling and exploring, preparing yellowtail and Uaru for startup tirelessly developing the existing resource base and seeking to find even new discoveries,” Mallon told the conference.
Moreover, a 2023 report by Wood Mackenzie, a global research and consultancy group, had shown that rig utilisation returned to pre-COVID levels, driving rates up. Wood Mackenzie had reported that by the end of 2023 rates were expected to be at US$500,000/day or above for highly-prized, advantaged ultra-deep-water rigs.
EMGL is producing a daily average of 645,000 barrels of oil per day (bpd) and have plans to hit a target of 1.2 million bdp by 2027. Since 2015 the company has made over 30 discoveries from its drilling campaign in the Stabroek Block which is estimated to hold 11.6 billion barrels recoverable oil.
It should be noted that for every day that the drill ships work, Guyana will have to foot the bill. Owing to the 2016 Production Sharing Agreement (PSA), Guyana signed with Exxon – all of the company’s expense will be recovered. Under the deal, Exxon receives profits after 75 percent is withdrawn to cover operational expenses.
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