ONCE given the go ahead from the government, ExxonMobil Guyana and its partners will be gearing up to invest approximately GY$1.8 trillion (US$9 billion) to develop the Yellowtail project within the Stabroek Block offshore Guyana.
According to a report published by OilNow on Saturday, the investment figures are based on initial estimates which were outlined in the project’s Environmental Impact Assessment (EIA). The document was submitted to the Environmental Protection Agency (EPA) by the oil company’s local affiliate, Esso Exploration and Production Guyana Limited (EEPGL).
Following feedback from the government, the company, according to OilNow, will make a Final Investment Decision (FID) on the Yellowtail project – the company’s fourth development in the Stabroek Block.
“Exxon was keen to note that the project costs are anticipated to increase given the higher numbers of development wells and associated drilling costs when compared to its Payara project, which carries a similar price tag,” OilNow said in its report.
The Yellowtail discovery was announced in April 2019. It is ExxonMobil’s 13th oil discovery in the Stabroek Block with drilling having encountered approximately 292 feet (89 meters) of high-quality oil-bearing sandstone reservoir at a depth of 18,445 feet (5,622 meters) in 6,046 feet (1,843 meters) of water.
With a recent discovery at the Cataback-1 Well, Guyana’s oil reserves have shot up to 10 billion barrels. And, with Guyana preparing to accommodate its largest ever exploration campaign, the country’s petroleum resources are projected to double by 2025. The heightened exploration efforts across the Stabroek and Canje blocks are expected to run until December 2025. ExxonMobil had specified that it has plans to drill a total of 37 wells at the Stabroek block alone.
The oil giant, according to OilNow, made no mention of its projections for the Kaieteur block which has since seen a non-commercial discovery at the Tanager well.
The company did note, however, that it will continue use of its six drill ships, namely the Stena Carron, the Stena DrillMAX, the Noble Bob Douglas, the Noble Tom Madden, the Noble Don Taylor and the Noble Sam Croft, all of which continue to operate offshore Guyana.
As it is, these vessels have been executing a series of exploration, appraisal and development drilling campaigns with the Stena Carron being the only rig equipped to perform well tests.
To further complement the ongoing operations of the Liza Destiny Floating Production Storage and Offloading (FPSO) vessel, ExxonMobil and its partners are preparing to welcome the Liza Unity in November, followed by the Prosperity FPSO.
Meanwhile, Minister of Natural Resources, Vickram Bharrat, had previously said that oil discoveries in the Guyana Basin have been quite lucrative, and is currently approaching 13 billion barrels of oil equivalent resources, which could see further increases as more drilling begins.
Bharrat had indicated that even though the majority of Guyana’s oil discoveries are being made in the Stabroek block, the country’s petroleum potential is far more expansive and goes beyond the ExxonMobil-operated areas.
With the country’s half-year oil earnings already surpassing US$1 billion, coupled with the fact that global oil prices have been on a constant rise, Guyana’s petroleum revenues could increase significantly. More specifically, Guyana could earn in excess of US$80 million from its eighth oil lift which is slated for November.
It was only in August that Minister Bharrat announced Guyana’s receipt of payments for its seventh oil lift, to the tune of US$79,617,561.87. It is the largest single oil payment the country has received to date, and it brought total oil extractions to a grand total of 7,056,262 barrels, which have accumulated US$436 million in earnings.
Since 2015, Guyana has had 22 oil discoveries, and with the country poised to gain far more within the coming years, the government has promised that the oil revenues will be used to bring direct benefits to the people of Guyana.
As it is, more than US$400 million is sitting in Guyana’s Natural Resources Fund, untouched. The People’s Progressive Party Civic-led government has vowed to ensure that the monies are only spent once the requisite legislation is in place to ensure intense scrutiny and accountability of spending.
Additionally, Vice-President, Dr. Bharrat Jagdeo, had previously indicated that with the climate change imperative to decarbonise the world, it was important that Guyana pursues an aggressive mission of “getting as much oil out of the ground as quickly as possible.”
The former President, at an oil conference in the United States, reasoned that Guyana has to maximise the benefit from the industry and use those benefits to change lives of every Guyanese. “We don’t know how swiftly we’ll get to a decarbonised world, but we have to make use of this period when there is still demand to get as much as possible out of the ground and that is why we support the rapid pace of the industry, but it must be done safely,” he posited.
He said too that the government will be working strategically in its efforts to develop the oil industry. In doing so, he said that the oil revenues will be used to propel and accelerate the country’s critical non-oil sectors such as agriculture and social services.
