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Exxon signs ‘large’ contract for Guyana's 4th project with TechnipFMC for sub sea equipment despite no approval of the Yellowtail project

Kaiteur

An artist’s rendering of what the subsea apparatus looks like when hooked up

By Kaieteur News

GEORGETOWN
Petroleumworld 11 17 2021

Nov 17, 2021 News

Kaieteur News – Despite the fact that the Guyana Government is yet to sign off on any of the required approvals or licenses required for the development of the Yellowtail oil field development in the Stabroek Block, ExxonMobil Guyana has inked a “large contract” for the subsea installations for that project.

A TechnipFMC’s subsea apparatus that was installed on the seabed for the Liza II development

The news was disclosed on Monday by TechnipFMC, which said it has been awarded a “large” contract by Exxon Mobil Corporation, affiliate, Esso Exploration and Production Guyana Limited (EEPGL), to supply the subsea production system for the Yellowtail development.”

According to TechnipFMC, “a large contract is between US$500 million and US$1 billion”
It was noted, however that “the full contract award will not be included in inbound orders, until the project receives final investment decision and government approvals.”

According to the company, “subject to government approvals and final project sanction, TechnipFMC, will provide project management, engineering, manufacturing and testing capabilities to deliver the overall subsea production system.”

It said, “…the scope of the project includes 51 enhanced vertical deepwater trees (EVDT) and associated tooling, as well as 12 manifolds and associated controls and tie-in equipment.”

To this end, Jonathan Landes, President, Subsea at TechnipFMC said, “We are very excited to continue our relationship with ExxonMobil through this award, which is our fourth within the Stabroek Block. We are proud of our dedicated Guyanese employees and are committed to the continued development and expansion of local capabilities.”

The news of the ‘large contract’ comes on the heels of recent reports that ExxonMobil Guyana was already in talks with SBM Offshore, the Dutch floater specialists that constructed the first two Floating Production Storage and Offloading (FPSO) vessels—Liza Destiny and Unity, in addition to the Prosperity currently being fabricated—for the company to construct the Yellowtail FPSO.

Those negotiations were being had even before the public scoping exercise had been completed.

That vessel is for ExxonMobil Guyana’s fourth and largest oil field development, which is to operate in the Stabroek Block at the Yellowtail site to comprise up to 67 wells—production and reinjection.

According to international reports, the talks include the potential for some future platform assembly in Guyana. This publication understands the discussions include potential made-in-Guyana requirements to build part(s) of future production units.

This according to a Reuter’s report, which attributed the sentiments to Vice President, Bharrat Jagdeo.

“We are hoping that more and more of the components could be fabricated in Guyana,” Jagdeo said.

It was noted that the deal for the fabrication of the latest FPSO could be had within six months.

Netherlands-based SBM Offshore had been awarded Exxon contracts to build Guyana’s first three FPSOs, namely the Liza Destiny for the Liza I Oil Field, the Liza Unity currently being hooked up to the subsea installations, while the third development, Payara is well underway.

That oilfield will be produced using the FPSO—Prosperity—another of the production vessels that ExxonMobil had proceeded with constructing, even before receiving government’s approvals.

The company has, in recent years, been coming under increasing public scrutiny and receiving criticism over its high-handed approach towards projects in Guyana with negotiations being done for project costs to be recovered from oil revenues, and for which Guyanese authorities have little to no input.

Outside of its inability to audit the expenses for the Liza I&II, Guyanese authorities have also been coming under increased scrutiny concerning their dealings with ExxonMobil Guyana, as highlighted during the final scoping exercise to inform the crafting of the Environmental Impact Assessment for the Yellowtail Development.

To this end, the exercise saw participation from stakeholders locally, regionally and internationally, including Gary Aboud, founding member of the Trinidad and Tobago (T&T)

Fishermen and Friends of the Sea (FFOS) group.

He told the panelists including the facilitator—the Environmental Protection Agency (EPA)—that they are prepared to litigate against ExxonMobil Guyana, if their demands are not met in writing, in the EIA to be prepared.

Accusing the panelists of attempting to hoodwink the stakeholders as it relates to the emergency preparedness in the event of an emergency, Aboud, in raising his concerns with the EEPGL panel, stressed that the scoping exercise being conducted is for “a Caribbean audience who are concerned when we speak about oil spills.”

To this end, the FFOS founding member told the panelists “what we are saying in T&T is that for us to accept and endorse and welcome you into our territory of the Caribbean region, you need to respond to our questions and don’t hoodwink us and tell us, no we are prepared.”

He said, the concerns are credible as they relate to what obtains when a spill occurs and lambasted the EEPGL official that contended, “we have great facilities and capacities to prevent it (oil spill) from even occurring.”

According to the FFOS founding member, “I want to state on record strong objection to hoodwinking the question about preparedness for when they occur, because I am not aware of a single oil company on the planet which have not had accidents and spills.”

Adamant in his assertions, Aboud told the ExxonMobil and EPA panelists, “when the professionals on the panel chats to us—and no disrespect—real nonsense, to say that no, no, no we won’t have any (oil spills), I wish I could put his daughter’s life on the line with that promise because he wouldn’t, because accidents occur.”

According to Aboud, the preparatory planning and the EIA, “cannot hoodwink the concerns that we are raising,” and pointed to the fact that in neighbouring T&T “we probably have the world record for an island, with not many installations, but quite a few, we have reported in excess of 100 spills per year.”

further still, Aboud used his opportunity to address the panel, to articulate, “my questions are based on the fact that accidents occur, and I don’t want no professional with a wonderful accent and a long list of professional accreditations to tell me no, we are prepared it won’t occur, because history proves otherwise.”

According to project documents, Yellowtail will consist of the drilling of approximately 41 to 67 development wells (including production, water injection, and gas re-injection wells); installation and operation of Subsea, Umbilicals, Risers, and Flowlines equipment; installation and operation of a Floating Production, Storage, and Offloading (FPSO) vessel in the eastern half of the Stabroek Block; and— ultimately—project decommissioning.

EEPGL has said the FPSO will be designed to produce up to 250,000 barrels of oil per day.
Onshore logistical support facilities and marine/aviation services will be used to support each stage of the Project. EEPGL is expected to use proven and good international oilfield practices. The company said it has incorporated many embedded controls into the overall Project design to reduce environmental and socioeconomic impacts.

The initial production is expected to begin by the end of 2025–early 2026, with operations continuing for at least 20 years. The project is expected to employ up to 540 persons during development well drilling, approximately 600 persons at the peak of the installation stage, and 100 to 140 persons during production operations.

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