US supermajor in early dialogue with contractors over FPSO for the Yellowtail area in the Stabroek block
US supermajor ExxonMobil is engaged in early discussions with the world’s two leading floater specialists over the contracting of a fourth large floating production, storage and offloading vessel for the flagship Stabroek block offshore Guyana.
ExxonMobil is fast-tracking activities in Guyana, as the company aims to have as many as six FPSOs in operation at Stabroek by 2027, shooting for a total processing capacity of more than 1 million barrels per day of oil by then.
Output at Stabroek began in December 2019 when the Liza Destiny FPSO started up on the giant Liza field.
Two more units — Liza Unity and Prosperity — are earmarked to produce from Liza and the Payara-Pacora development in 2022 and 2024 respectively.
Industry sources told Upstream that ExxonMobil is already conducting technical analysis on the scope of the floater to be contracted for the potential development of the Greater Yellowtail area, with initial talks taking place with Netherlands-based SBM Offshore and Japanese arch-rival Modec.
“ExxonMobil is running early studies with both SBM and Modec but, from my understanding, it is still a fairly experimental conversation. It is not even pre-front-end engineering and design at this point,” one well-informed source told Upstream.
The ExxonMobil-led consortium in Stabroek, which also includes US independent Hess and China’s CNOOC International, expects to submit a plan of development on Yellowtail to the Guyanese government for approval in the fourth quarter.
The Yellowtail unit is not yet set in stone, but the fourth Guyana FPSO will likely be as big as the second and third vessels, both of which featured topsides modules able to produce 220,000 bpd and 400 million cubic feet per day of natural gas.
SBM won the bidding process for the Liza Destiny floater and was subsequently awarded contracts for the Liza Unity and Prosperity FPSOs as a result of direct negotiations, with ExxonMobil taking advantage of the Dutch company’s highly standardised Fast4Ward building concept.
Competition coming
ExxonMobil being in dialogue with SBM and Modec suggests the operator might opt for a competitive tender for the Yellowtail FPSO, which sources added is tentatively scheduled to start production in 2025.
A similar process occurred in the contracting process for the subsea risers, umbilicals, risers and flowlines package, which has been thrown open to competition for Yellowtail, interrupting a sequence of direct negotiations with preferred vendor Saipem.
ExxonMobil still has a long road ahead before deciding the contracting format, with one source predicting things will be much clearer in the second half.
The Greater Yellowtail area encompasses the Yellowtail-1, Yellowtail-2 and Redtail-1 discoveries in the centre portion of Stabroek.
ExxonMobil has an ambitious drilling plan in motion for Stabroek this year, and depending on results, other potential discoveries could see the daylight sooner.
“Yellowtail will be a single FPSO. If ExxonMobil finds a lot more oil in other areas, it is possible they choose to replicate the same development concept, although right now this is all speculation,” one source added.
On the list of potential future developments at Stabroek are Hammerhead, Turbot-Longtail and Mako-Uaru.
ExxonMobil has recently started appraising the Longtail-1 find with the Stena Drilling drillship Stena DrillMax and soon will spud both the Mako-2 and Uaru-2 prospects.
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Source: Upstream | This text was excerpted from the media outlet cited on March 23, 2021 and is provided to Noia members for information purposes only. Any opinion expressed therein is neither attributable to nor endorsed by Noia.
