Hess, ExxonMobil expect work on Yellowtail project to move ahead quickly

ExxonMobil and Hess have both indicated that they expect to move forward quickly with preparations for oil production at Yellowtail, the fourth section of the Stabroek block offshore Guyana slated for development.

According to John Hess, the CEO of the US-based independent Hess, a non-operating partner in Stabroek, Guyana’s government is currently evaluating ExxonMobil’s request for permission to develop Yellowtail. Officials in Georgetown are on track to finish the evaluation process before the end of the year, he said last week at the UBS Global Energy Virtual Conference 2021.

“The environmental impact statement for Yellowtail is already in too,” he noted.

He went on to describe President Irfaan Ali and members of the current administration as “very pro-business” and eager to move hydrocarbon projects forward. “The people of Guyana and this current government especially want to keep the momentum of oil investments because that is the best way for them to get shared prosperity and to improve all lives of every Guyanese,” he was quoted as saying by the OilNOW.gy site.

Thus far, he added, ExxonMobil Guyana, the operator of the project, and its partners have observed that the Ali administration is prepared to act quickly. “You know, the fact of the matter is that they took over in August [2020], and before September 30, 2020, they gave us approval for Payara,” he said. “And now we are talking about Yellowtail, a large resource, and we will be ready to go.”

Work schedule

Hess was speaking shortly after Mike Ryan, ExxonMobil Guyana’s production manager, presented information about Yellowtail during virtual consultation sessions designed to facilitate the inclusion of public views in the environmental impact assessment (EIA) covering the project.

Ryan said during the sessions that his company had already drawn up a schedule for work on Yellowtail. ExxonMobil Guyana and its partners have already begun work on the EIA and are set to select the design basis for the project by mid-2021, he said. Their next steps will be to select an engineering, procurement and construction (EPC) contractor in September or October of this year and then make a final investment decision (FID) in the fourth quarter.

Once the FID has been taken, he continued, ExxonMobil Guyana and its partners will be in a position to start development drilling in the first quarter of 2024 and proceed to the installation of SURF (subsea umbilicals, risers and flowlines) facilities in the second quarter of the same year. They can then install a floating production, storage and off-loading (FPSO) unit in the third quarter of 2025 and start production in the final quarter of 2025.

According to Ryan, the FPSO will be able to produce up to 250,000 barrels per day of crude oil, 620mn cubic feet (17.56mn cubic metres) per day of associated gas and 225,000 bpd of water. It will have a storage capacity of 2mn barrels of oil and will off-load production into a tanker every four to six days, he said.

These specifications “are for the life of the field and are used by our engineers to ensure that the facility is designed appropriately to be able to handle fluids coming from the reservoir,” he said. The FPSO will have gas compression and injection units, oil separation units, power generation units, produced water treatment units and a crude oil metering system, as well as risers and manifolds, he added.

ExxonMobil Guyana and Hess are working with China National Offshore Oil Corp. (CNOOC) to develop Stabroek. Yellowtail is one of 19 oil-bearing fields found at the block, which is believed to contain more than 9bn barrels of oil equivalent (boepd). It will be the fourth section of Stabroek to start commercial development. ExxonMobil and its partners launched production at Liza-1, the first site, in December 2019 and hope to begin work at Liza-2, the second site, next year. The third site, Payara, is due to come on stream in 2024.