ExxonMobil-led Guyana group OKs 6th oil development in offshore Stabroek Block

Operator ExxonMobil and its offshore Guyana Stabroek Block partners have greenlighted Whiptail, the block's sixth oil development, after receiving required approvals from Guyana energy officials, with first oil expected in late 2027, the US energy group and 30% partner Hess said in separate statements April 12.

With a price tag of $12.7 billion, the project will have a floating production storage and offloading vessel capable of delivering 250,000 b/d of oil production capacity, and will further push up the block's production -- which by the time Whiptail comes on stream will already be producing more than 1 million b/d, Liam Mallon, ExxonMobil's Upstream President, said in the company's statement.

"Our sixth multi-billion-dollar project in Guyana will bring the country's production capacity to approximately 1.3 million b/d," Mallon said. "Our unrivaled success in developing the Guyana resource at industry-leading pace, cost and environmental performance is built on close collaboration with the government of Guyana, [and] our partners, suppliers, and contractors."

"The Stabroek block developments are among the lowest emissions intensity assets in ExxonMobil's upstream portfolio and will provide the world with additional reliable energy supplies now and for years to come," he added.

ExxonMobil operates Stabroek with 45% while China's CNOOC holds 25%.

Targets 850 million barrels

Whiptail, which was announced as a discovery in July 2021, will target an estimated resource base of more than 850 million barrels of oil and include up to 10 drill centers and 48 production and injection wells, Hess said.

Earlier this year, the Stabroek Block was producing more than 600,000 b/d after Payara, the block's third oil development, came online in November 2023.

Next to debut in the block's project lineup will be the Yellowtail development, due on stream in 2025, to be followed by Uaru in 2026. Both of those projects will each have oil output capacity of 250,000 b/d.

The Stabroek partners have made well-over 30 significant oil discoveries in Guyana, most of them in the southeast portion of the block near the border with Suriname. They continue to explore on the block and while the official resource figure has been more than 11 billion boe for a while now, that doesn't include finds of the last year or so.

FPSO under construction

The FPSO vessel to be used for Whiptail, which will be named Jaguar, is now under construction, while FPSOs for Yellowtail and Uaru are already underway.

The partners said the Stabroek projects are projected to create tens of billions of dollars of revenue and "significant" economic development for Guyana.

Since the first Stabroek production, Liza Phase One, in December 2019 more than $4.2 billion of revenues from the block have been deposited into the Guyana Natural Resource Fund.

Liza Phase 2, the second Stabroek field to be produced, flowed its first oil in February 2022.

Currently 6,200 Guyanese work to support Stabroek operations, or 70% of the total workforce, ExxonMobil said. The company's cumulative spending on Guyana and its contractors with Guyanese suppliers since 2015 topped $1.5 billion by the end of 2023.

In March, the partners made the Bluefin discovery, and in October 2023 made what they called a "significant" find at the Lancetfish-2 appraisal well.

Among 15 largest oil producers by mid-2030s

S&P Global Commodity Insights said Guyana is projected to rank among the world's 15 largest oil-producing countries by the mid-2030s, according to a company report April 1 on Guyana's oil and gas risk.

"Guyana's oil production rampup will transform the economy through revenue windfalls and the gradual creation of ancillary jobs tied to the domestic oil and gas industry," the report said.

"In real terms, the value of Guyana's oil production is projected to increase from approximately $11 billion in 2023 to approximately $33 billion by 2030," the commentary said. "Oil exports are expected to represent more than 90% of GDP before the end of the decade."

S&P Global also believes Guyana's upstream investment environment is expected to remain competitive with more challenging fiscal terms, but new contracts will feature provisions to protect investors from adverse changes.

"The new E&P framework maintains decision-making leeway for Guyana to continue expediting projects, but lack of a skilled oil-sector workforce to manage the booming hydrocarbon sector threatens to result in new operational risks," S&P Global said.