Dutch contractor emerges as leading contender for ExxonMobil’s billion-barrel deep-water project off Guyana

(Upstream- The Global Oil and Gas News Source) Dutch floater specialist SBM Offshore has moved into pole position to secure a hard-fought contract from US supermajor ExxonMobil covering front-end engineering and design of a landmark floating production, storage and offloading vessel to be installed at the billion-barrel deep-water Liza oil discovery off Guyana.

Multiple sources told Upstream that SBM has emerged as front runner in a two-horse race against Japanese rival Modec and suggested that an award could be made as soon as this month.

Confirmation of an award would leave SBM in the driving seat to move on from FEED into an engineering, procurement and construction contract for the FPSO, though sources said it was too early to be definitive about that.

Project watchers said SBM would likely carry out FEED studies at its Schiedam headquarters and is expected to favour Singaporean yard Keppel to carry out conversion work on the floater, which will be installed in the Stabroek block about 193 kilometres offshore.

“SBM stands a high chance to win the FEED and eventually the conversion job, which will be done at Keppel,” said one source with direct knowledge of the bid process.

This duo has partnered before on similar jobs such as construction of the P-57 FPSO, which is operating at the Jubarte field off Brazil for Petrobras.

ExxonMobil has successfully appraised Liza over the past year and some industry sources suggested that a second FPSO is likely to be on the supermajor’s agenda.

Sources cited SBM’s strong relationship with ExxonMobil on previous projects as having helped give it an edge over Modec.

In 2003, SBM signed a lease contract with ExxonMobil covering the Serpentina FPSO off Equatorial Guinea with the supermajor later exercising a purchase option.

Located on the Zafiro field, north of Bioko Island, the vessel is designed to handle 110,000 barrels per day of oil and store 1.9 million barrels of crude. The two sides have also worked together in Angola where SBM leased out its Xikomba FPSO for work on the eponymous field in Block 15 — a project that was abandoned in recent years — while in the same block, SBM provided two FPSOs for the Kizomba A and B projects.

Elsewhere in Africa, SBM has carried out numerous FPSO studies for ExxonMobil, particularly on undeveloped Nigerian discoveries such as Bosi and Uge, and supplied an FPSO for its shallow water Yoho project.

Earlier this year on Liza, ExxonMobil shortlisted SBM and Modec out of five players — the other three original contenders were BW Offshore of Norway, Bluewater of the Netherlands and Italy’s Saipem — that originally bid for the Liza FEED study.

Current plans for the FPSO call for the conversion of a very large crude carrier with capacity to produce an average of 100,000 bpd and store 1.6 million barrels.

The floater is expected to be spread-moored, according to Exxon­Mobil’s draft development plan filed with Guyanan authorities.

Liza is the first field to have been declared commercial in the 50 years since the British colony gained independence.

Believed to be the largest oil find of 2015, Liza was initially estimated to hold 800 million to 1.4 billion barrels of oil.

Subsequent appraisal drilling at the Liza 3 well has caused the partners to boost their estimates towards the upper end of this range.

Current plans call for Exxon­Mobil to bring Liza into development as soon as 2020.

The US giant is planning a two-pronged development drilling effort at the field involving a pair of offshore rigs carrying out simultaneous operations, according to preliminary development plans filed with Guyanese regulators.

Development drilling is due to begin at the start of 2019.

During the first phase, the rigs will drill development wells from a pair of drill centres — one near the Liza-2 well location and about 3.6 kilometres west of the Liza discovery probe, and the second around 3.9 kilometres north of Liza-1.

Production will be collected via subsea flowlines and sent through subsea manifolds to an FPSO.

These schemes are yet to be finalised and are subject to change, ExxonMobil cautioned earlier.

First oil for phase one will come around the middle of 2020, according to the draft development plan.

Upstream earlier reported that the six-month FEED will be followed by the EPC contract in a year.

The original Liza wildcat hit more than 295 feet of high-quality sandstone reservoirs and was drilled to 17,825 feet by the Trans­ocean drillship Deepwater Champion.