The floating, production, storage and offloading (FPSO) vessels Liza Destiny and Prosperity, which were built and leased to ExxonMobil Guyana by Dutch shipbuilder SBM Offshore, are currently on the oil company’s radar for outright early purchase.
This is according to SBM in a recently released report for the half year, wherein it has been explained that, as per the contract between SBM and ExxonMobil, the Destiny and Prosperity FPSOs have maximum lease terms extending to November 2025 and December 2029.
“ExxonMobil Guyana has indicated that it is contemplating the exercise of its contractual purchase option to acquire FPSOs Prosperity and Liza Destiny in the second half of 2024, ahead of the end of the maximum lease terms in November 2025 and December 2029 respectively,” SBM has explained.
The Liza Destiny and Prosperity FPSOs are two of three FPSOs currently operating in Guyana’s offshore waters. The other one, Liza Unity, is producing oil in the Stabroek Block’s Liza Phase 2 development.
ExxonMobil completed the purchase of the Liza Unity FPSO from SBM Offshore for some US$1.26 billion in November 2023. The vessel had been on hire since February 2022, and in 2023 had been operated through the integrated operations and maintenance model, wherein SBM Offshore and ExxonMobil’s expertise and experience had been combined.
Transaction at the time of that purchase had been completed a few months ahead of the end of the maximum lease term, which was set for February 2024. SBM Offshore has notwithstanding been tasked with continuing to operate and maintain the FPSO up to 2033.
The Stabroek Block is 6.6 million acres (26,800 square kilometres). Exxon, through its local subsidiary Esso Exploration and Production Guyana Limited (EEPGL), holds 45 per cent interest therein. Hess Guyana Exploration Ltd holds 30 per cent interest, and CNOOC Petroleum Guyana Limited, a wholly-owned subsidiary of CNOOC Limited, holds the remaining 25 per cent interest.
It has recently been announced by ExxonMobil that operation of the Liza Destiny and Unity FPSO vessels would be shut down in the third quarter of this year in order to install a pipeline that would be an integral part of delivering gas to the Gas-to-Energy (GtE) Project.
At a press conference held earlier this year, ExxonMobil Guyana President Alistair Routledge had said that, during that shutdown, the company would also do debottlenecking activities on the Unity FPSO; that is to say, modifications would be done to allow the vessel to produce more than 250,000 barrels of oil per day.
ExxonMobil has also been eyeing the possibility of increasing production at its third project, Payara, which is served by the Prosperity FPSO. Routledge explained that reviews were being done in this regard with Government ministries and agencies such as the Ministry of Natural Resources (MNR) and the Environmental Protection Agency (EPA).
Six FPSOs are expected to be operating offshore Guyana by 2027. The fourth FPSO, dubbed the ‘One Guyana’ FPSO, is currently being built by SBM, which had in 2022 been contracted by Exxon to construct, install, and then lease and operate the vessel. When completed, this vessel would operate in the Yellowtail development. It is expected to begin producing oil in the second half of next year, when production is expected to reach 250,000 barrels of oil per day. SBM’s latest update on the project is that it is 75 per cent completed.
The fifth FPSO, which would be named ‘Errea Wittu’, meaning “abundance” in the Warrau Indigenous language, would meanwhile operate in the Urau project. It would have an oil storage capacity of two million barrels, an oil production design rate of 250,000 barrels per day, and be able to offload approximately one million barrels onto a tanker in approximately 24 hours. This vessel would be delivered by MODEC, a Japanese company that has confirmed construction of this FPSO with a ceremony held on February 2. Start-up of the US$12.7 billion Urau development is targeted for 2026.
‘Jaguar’, the sixth FPSO, is earmarked for Exxon’s Whiptail project. Government has said that by the time this FPSO comes online in 2027, Guyana is expected to be producing as much as 1.2 million barrels of oil per day. This FPSO is also currently being constructed, and is 25 per cent completed.
