5th FPSO to push Guyana’s oil production beyond 1 million bpd

Guyana is on track to surpass one million barrels of oil production per day with the arrival of its fifth Floating Production, Storage and Offloading (FPSO) vessel, marking another major expansion of the country’s petroleum production capacity and economic potential.

President Dr Irfaan Ali said the fifth production vessel, which set sail from Singapore in early August, is expected to arrive off Guyana’s coast this week, with first oil targeted for the fourth quarter of 2026.

Built by MODEC at a reported cost of US$12.7 billion, the vessel is designed to add approximately 250,000 barrels per day to national production. “It is a larger FPSO in Guyana’s fleet… and will push national output above one million barrels a day for the first time,” the president stated.

The new vessel will join the four FPSOs currently operating in the Stabroek Block: Liza Destiny, Liza Unity, Prosperity and One Guyana, which together are producing approximately 900,000 to 920,000 barrels of oil per day.

The president also highlighted the growing benefits to Guyana under the existing production-sharing agreement, noting that the production-sharing formula remains unchanged from the 2016 agreement. Under the arrangement, royalty is paid first, while up to 75 per cent of production can be allocated to cost recovery, with the remaining profit oil shared equally between Guyana and the Stabroek Block co-venturers.

President Ali said Guyana’s share of Stabroek Block profit oil has increased from 12.5 per cent to 39.8 per cent, largely because the project’s cost bank was recovered earlier than initially anticipated.

He explained that whereas as much as 75 barrels out of every 100 previously went toward cost recovery, today only about 20 barrels are allocated to costs. President Ali stressed that the reduction in the proportion of production toward cost recovery means a significantly greater share of the country’s oil production is now available as profit oil.

He said this is reflected in Guyana receiving approximately 39.8 barrels out of every 100 barrels as its share of the profit oil. The expansion of production is expected to strengthen government revenues and provide additional resources to support national development, including continued investments in infrastructure, healthcare, education, housing and other public services.

With the fifth FPSO expected to begin production before the end of 2026, Guyana is poised to enter a new phase of its petroleum development, with national output projected to exceed one million barrels per day and a growing share of production translating into resources for the country’s long-term development. (DPI)