Exxon Sanctions Yellowtail Development Offshore Guyana

U.S. supermajor ExxonMobil has made a final investment decision for the Yellowtail development offshore Guyana after receiving government and regulatory approvals.

This will be the company’s fourth, and largest, project in the Stabroek Block. It is expected to produce approximately 250,000 barrels of oil per day starting in 2025. To remind, the project received environmental clearance by Guyanese authorities late last week.

“Yellowtail’s development further demonstrates the successful partnership between ExxonMobil and Guyana and helps provide the world with another reliable source of energy to meet future demand and ensure a secure energy transition,” said Liam Mallon, president of ExxonMobil Upstream Company.

“We are working to maximize benefits for the people of Guyana and increase global supplies through safe and responsible development on an accelerated schedule,” Mallon added.

Yellowtail production from the One Guyana floating production storage and offloading (FPSO) vessel will develop an estimated resource of more than 900 million barrels of oil. The $10 billion project will include six drill centers and up to 26 production and 25 injection wells – up to 67 development wells in total.

ExxonMobil’s ongoing offshore exploration in Guyana has discovered a recoverable resource of more than 10 billion oil-equivalent barrels. The company anticipates up to 10 projects on the Stabroek Block to develop this resource.

Development of projects and continued exploration success offshore are enabling the steady advancement of Guyanese capabilities and enhanced economic growth. More than 3,500 Guyanese are supporting ExxonMobil’s activities in Guyana, an increase of more than 50 percent since 2019.

The company and direct contractors have spent more than $600 million with more than 880 local suppliers since 2015.

More than 3,000 Guyanese companies are registered with the Centre for Local Business Development, which was founded by ExxonMobil and its co-venturers in 2017 to build local business capacity and support global competitiveness.

Partner Hess said in a separate statement that its net share of development costs, excluding pre-sanction costs and FPSO purchase cost, is forecast to be approximately $2.3 billion, of which approximately $210 million is expected in 2022, $430 million in 2023, $585 million in 2024, $390 million in 2025, and $295 million in 2026.

“We are excited to sanction our fourth oil development and the largest FPSO to date on the Stabroek Block,” CEO John Hess said. “We look forward to continuing to work with the Government of Guyana and our partners to realize the remarkable potential of this world-class resource for the benefit of all stakeholders. The world will need these low-cost oil resources to meet future energy demand and help ensure an affordable, just, and secure energy transition.”

Exxon said in February that it started production from Guyana’s second offshore oil development on the Stabroek Block – Liza Phase 2 – bringing total production capacity to more than 340,000 barrels per day in only seven years since the country’s first discovery.

Currently, the company is producing oil via the FPSO Liza Unity which produced first oil on February 11, 2022, and the Liza Destiny FPSO which started production in December 2019.

Payara, the third project in the Stabroek Block, is expected to produce approximately 220,000 barrels of oil per day using the Prosperity FPSO vessel, which is currently under construction.

Last week, the construction of the Prosperity FPSO hit a new milestone as it left dry dock in Singapore. The second Fast4Ward FPSO built by SBM Offshore has in February moved to the quayside for the topside integration phase.

ExxonMobil affiliate Esso Exploration and Production Guyana Limited is the operator and holds 45 percent interest in the Stabroek Block. Hess holds 30 percent while CNOOC holds the remaining 25 percent interest.

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