ExxonMobil begins exploration drilling on new well offshore Guyana

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…11 Int’l firms submit bids to review Yellowtail development plan

United States oil giant, ExxonMobil, is continuing its exploration activities in the Stabroek Block offshore Guyana, spudding the Patwa-1 well on Friday.

The Maritime Administration Department (MARAD) had indicated in a Notice to Mariners that the oil major’s local affiliate, “Esso Exploration and Production Guyana Ltd (EEPGL) will continue exploration drilling operations at the Patwa-1 Well Site within the Stabroek Block of Guyana’s Exclusive Economic Zone.”

According to the Notice, the well is being spudded with Noble Corporation’s drillship Noble Sam Croft. It was noted that drilling activities will continue until March 15, 2022.

To this end, MARAD has informed mariners to stay clear of the vessels being used for the exercise and navigate with “extreme caution” whenever in the vicinity.

The Patwa-1 well is situated approximately 113.4 nautical miles (210 kilometres) from the Coast of Guyana, and covers an area of 0.29 square nautical miles (1 square kilometre).

Only earlier this month, Exxon announced two new oil discoveries in the oil rich Stabroek Block, which has more than 10 billion barrels of recoverable resource estimated. These recent oil finds were in the Fangtooth-1 and Lau Lau-1 wells in the Stabroek Block, bringing its number of discoveries in the Block to 27.

According to the US oil giant, Fangtooth-1 had 164 feet of oil reservoir, while the Lau Lau-1 well had 315 feet of oil reservoir.

ExxonMobil’s Senior Vice President of exploration and new ventures, Mike Cousins, noted that the discovery not only increased Exxon’s resource estimates, but added to the company’s understanding of the Block.

“Initial results from the Fangtooth and Lau Lau wells are a positive sign for Guyana and continue to demonstrate the potential for the country’s growing oil and gas sector, ExxonMobil and our co-venturers in the Stabroek Block… Both discoveries increase our understanding of the resource, our continued confidence in the Block’s exploration potential, and our view that the many discoveries to date could result in up to 10 development projects,” Cousins said.

Meanwhile, Exxon Country Manager Alistair Routledge noted that the company’s success in Guyana’s waters was nothing short of extraordinary. Routledge also assured that as the company’s oil finds increased, so too would opportunities for Guyanese to benefit.

Exxon’s last oil find was at the Cataback-1 well in the Stabroek Block back in October 2021, where the company encountered 243 feet of oil reservoirs. Before that, the company had also found oil at the Pinktail-1 well in September.

Currently, the oil major is producing close to 120,000 barrels per day (bpd) of oil in the giant Liza field with the Liza Destiny Floating Production Storage and Offloading (FPSO) vessel. This is Exxon’s first development project with two others already approved and its fourth in the process of being reviewed.

ExxonMobil has said it anticipates at least six projects offshore Guyana will be online by 2027, with developmental drilling recently starting on the second one, the Liza Phase 2 project.

Only recently, the oil company said production in the second phase is on course to start in the first quarter of 2022 during which production is expected to increase to 220 barrels of oil per day with the Liza Utility FPSO vessel.

The third project –the Payara Development – will meanwhile target an estimated resource base of about 600 million oil-equivalent barrels and was at one point considered to be the largest single planned investment in the history of Guyana.

Meanwhile, the Yellowtail development, which will be oil giant ExxonMobil’s fourth development in Guyana’s waters, will turn out to be the single largest development so far in terms of barrels per day of oil, with a mammoth 250,000 bpd targeted.

The Department of Public Information on Friday reported that 11 international firms have tendered bids in response to the Guyana Government’s search for a consultant to review the Yellowtail Field Development Plan.

Details from a recent tender opening at the National Procurement and Tender Administration Board (NPTAB) show the following bids: Infinity Services and X Well Mexico (US$617,500); Orwell Offshore (US$671,650); Endeavour Management (US$598,934); Future Energy Partners Limited (US$901,482); MSI International (US$817,761); IHS Global Incorporated (US$1,493,502); Sun Stone Energy Advisory Service (US$785,040); Bay Phase (US$423,360); RPS Energy Consultants Limited (US$494,000); Sproule (US$661,440); and Strat Oil Energy Services (US$324,080).

The proposals from these firms would be evaluated and ranked on their merit, in accordance with the evaluation criteria outlined. It is anticipated that contract negotiations with the selected firm would commence around February 1, 2022 and the assignment, around February 7, 2022.

Yellowtail is situated 126 miles offshore Guyana, where ExxonMobil made its 13th discovery in the Stabroek block. Its initial production phase is scheduled to commence in 2025 and the FPSO vessel is designed to have a storage capacity of two million barrels of oil. The proposed project could provide some 1,300 jobs across its four phases.

The oil rich Stabroek Block is 6.6 million acres (26,800 square kilometres). Exxon, through subsidiary EEPGL, is the operator and holds 45 per cent interest in the Block. Hess Guyana Exploration Ltd holds 30 per cent interest, and CNOOC Petroleum Guyana Limited, a wholly-owned subsidiary of CNOOC Limited, holds the remaining 25 per cent interest.