Having only received approval from the Guyana Government for the Yellowtail project earlier this month, ExxonMobil is expected to submit its fifth development plan in the Stabroek Block – Uaru Meco – by the end of this year. This is according to Chief Executive Officer (CEO) of Hess Corp, John Hess, during the company’s first-quarter conference call on Wednesday.
“Front-end engineering and design work for our fifth development at Uaru Meco is underway, and we anticipate that ExxonMobil will be in a position to submit a plan of development to the Government by the year-end,” Hess disclosed.
Only last week, President of ExxonMobil Guyana, Alistair Routledge, indicated that they are already working on the Uaru Development Project. He was at the time speaking at the signing of an agreement with Vreed-en-Hoop Shorebase Inc. for a US$300 million port facility.
Meanwhile, even though Uaru is still in the planning stage, ExxonMobil has already indicated its fifth development will be the same as the Yellowtail project as it relates to production, water injection and gas re-injection wells, and other development features. This was indicated in the Environmental Impact Assessment (EIA) for the Yellowtail project.
Hess holds a 30 per cent interest in the Stabroek Block, which is operated by ExxonMobil. The Hess CEO lauded the unprecedented rate at which the United States oil major is developing the oil resources offshore Guyana. In fact, it was disclosed that third development on the oil-rich Stabroek Block – Payara, which has already been approved by the Guyana Government since September 2020 – is now slated for startup in late 2023, earlier than initially forecasted, that is, in 2024.
“Our third development on the Stabroek Block at the Payara field, with a gross capacity of approximately 220,000 barrels of oil per day, is also ahead of schedule and is now expected to start up in late 2023,” Hess stated.
The Payara development will utilise the Prosperity floating, production, storage and offloading (FPSO) vessel, which has a gross capacity of producing 220,000 barrels of oil per day.
According to Chief Operations Officer at Hess, Greg Hill, “Pulling forward [Payara’s] production start-up reflects strong execution by the operator, and significantly enhances the net present value of the project.”
Earlier this month, Hess sanctioned the Yellowtail development after receiving Government and regulatory approvals. With first oil expected in 2025, Yellowtail will be the largest development to date on the Stabroek Block, with an estimated resource base of approximately 925 million barrels of oil and a gross production capacity of approximately 250,000 barrels of oil per day.
Current production at the Liza Phase 1 development is 130,000 barrels of oil per day, ahead of its original gross nameplate capacity, and this is expected to increase to 140,000 bpd during this quarter, following production optimisation work on the Liza Destiny FPSO.
The Liza Phase 2 development, which achieved its first oil in February using the Unity FPSO, is ramping up ahead of schedule, and is expected to reach its gross production capacity of approximately 220,000 barrels of oil per day by the third quarter.
“We want to thank and congratulate ExxonMobil for their outstanding work as operator in delivering exceptional project management and execution. According to a Wood Mackenzie study, the production growth ramp for the Stabroek Block is the best in the industry, compared with other major deep-water developments, which will benefit the people of Guyana and our shareholders,” the Hess CEO stated.
He noted that the company sees the potential for at least six FPSOs on the Stabroek block in 2027, with a production capacity of more than 1 million gross barrels of oil per day and up to 10 FPSOs to develop the discovered resources on the block.
With regards to exploration and appraisal in Guyana, Hess noted that the company will continue to invest in an active exploration programme, with approximately 12 wells planned for the Stabroek Block in 2022.
Only Tuesday, ExxonMobil announced three new discoveries at Barreleye, Lukanani and Patwa, which further strengthens the development potential of the oil-rich Stabroek Block. This is in addition to two other significant discoveries on the block in January at the Fangtooth and Lau Lau wells.
“With these discoveries, the gross discovered recoverable resource estimate for the block has been increased to approximately 11 billion barrels of oil equivalent, up from the previous estimate of more than 10 billion barrels of oil equivalent, and we continue to see multibillion barrels of future exploration potential remaining.