SBM Offshore, the Dutch shipbuilder responsible for constructing the Floating Production Storage and Offloading (FPSO) vessels currently operational in Guyana’s waters, has inked a 10-year agreement with ExxonMobil to operate and maintain a total of four FPSOs in the Stabroek Block.
The Operations and Maintenance Enabling Agreement was announced on Tuesday and will be applicable to the Liza Destiny (operating in Liza Phase One development), Liza Unity (operating in Liza Phase Two), Prosperity (earmarked for Payara) and ONE GUYANA (earmarked for Yellowtail) FPSO’s.
“This framework agreement establishes the new terms related to the operations of the Guyana FPSO fleet for a period of 10 years up to 2033. The lease terms and durations remain the same for all units, with 10 years lease for FPSO Liza Destiny and up to 2 years lease for FPSOs Liza Unity, Prosperity and ONE GUYANA after which the FPSOs’ ownership will transfer to the client,” the announcement from SBM stated.
“This contract supports SBM Offshore’s long-term business vision in Guyana enabling the Company to perform local and sustainable investments in people and infrastructure as well as to deploy its digital and operational technologies to the Guyana fleet. The estimated impact on the revenue backlog is around US$3 billion based on various operating and maintenance assumptions.”
Meanwhile, it was explained that SBM Offshore will operate the units through an Integrated Operation Model, which will include seconding ExxonMobil Guyana employees in some key onshore and offshore positions. Chief Executive Officer (CEO) of SBM Offshore, Bruno Chabas, was quoted as referring to the operational model as the first of its kind in the industry.
“We are very pleased with the contract concluded with ExxonMobil Guyana leveraging both companies’ recognized operating excellence. This contract capitalizes on our developments in Guyana to date, positioning the Company for long-term operations in the country. This Integrated Operation Model is the first of its kind in the industry.”
“And (it) extends our relationship with ExxonMobil Guyana by integrating further our teams. We believe it is the optimal solution to achieve excellence in the operation of Guyanese assets bringing value to all stakeholders and setting a new performance benchmark for the industry,” Chabas said.
It was only last month that the Prosperity FPSO, constructed by SBM Offshore, arrived in Guyana to join the other FPSO’s- Liza Destiny and Liza Unity, which are currently producing more than 380,000 barrels per day.
Prosperity will develop the Payara field in the offshore Stabroek Block. It has an initial production capacity of around 220,000 barrels of oil per day and an overall storage volume of two million barrels.
Production from the Prosperity vessel is expected to push daily production to some 600,000 barrels a day in 2024. ExxonMobil had said at the time that installation campaigns were ongoing and development drilling is underway to support Prosperity’s start-up later this year.
Guyana, with US oil giant ExxonMobil as the operator, began producing oil on December 20, 2019, in the Stabroek Block. Guyana’s oil revenues are being held in the Natural Resource Fund (NRF) at the New York Federal Reserve Bank, where it is earning interest.
