Exxon earmarks US$10B to develop Yellowtail; now seeking approval for 5th project

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ExxonMobil plans to spend US$10 billion (about GY$2 trillion) at its recently approved Yellowtail project, in the Stabroek Block offshore Guyana, but the company is also now seeking environmental approval for its fifth project: Uaru+.

This was announced by President of ExxonMobil Guyana Alistair Routledge, in a video statement provided on Monday to the local media.

Last Friday, the Environmental Protection Agency (EPA) granted a five-year environmental permit that allows Esso Exploration and Production Guyana Limited (EEPGL)- ExxonMobil’s local affiliate- to move ahead with the development of the Yellowtail project.

The government and EEPGL have also inked the Petroleum Production Licence (PPL) for the Yellowtail offshore development. With the requisite approvals, the company can now undertake the construction and operation of production facilities.

ExxonMobil Guyana President Allister Routledge (Photo: News Room/November 9, 2021)

The start-up of the Yellowtail project, Routledge said, is expected to begin in late 2025 and is anticipated to produce 250,000 barrels of oil per day from the “One Guyana” Floating Production Storage and Offloading (FPSO) vessel that would be able to store up to two million barrels.

Exxon’s total investment in this project is pegged at US$10 billion, the single largest investment in Guyana to date.

A press release from the Hess Corproation, said that Hess’ net share of development costs at Yellowtail, excluding pre-sanction costs and FPSO purchase cost, is forecast to be approximately US$2.3 billion.

EEPGL is the operator in the 6.6 million acres Stabroek Block, hold 45 per cent interest there; Hess Guyana Exploration Ltd. holds 30 per cent interest and CNOOC Petroleum Guyana Limited holds 25 per cent interest.

Importantly, though, Routledge highlighted: “Even as we make this final investment decision for Yellowtail, our team here in Guyana has submitted an application for environmental authorisation for a fifth development in the Stabroek Block at Uaru+.”

This was confirmed on Monday by EPA’s Senior Environmental Officer Arethe Forde; it was noted that the application was submitted on March 23.

If approved, ExxonMobil could begin developing this field and later, startup production there too.

During this year’s Budget debates, Guyana’s Natural Resources Minister Vickram Bharrat announced that $88 million has been allocated for the review and evaluation of the Uaru field development plan.

Later, during the recent International Energy Conference in Guyana, Routledge said that as soon as engagements with the government on the Yellowtail development were concluded, the company would “begin talking about Uaru.”

ExxonMobil anticipates up to 10 projects in the Stabroek Block to develop the more than 10 billion oil-equivalent barrels discovered there already.

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