ExxonMobil Guyana moves forward with sixth offshore development

Rhea-AI Summary

ExxonMobil finalizes investment decision for Whiptail project in Guyana, adding 250,000 barrels of oil per day capacity by 2027. $12.7 billion investment to boost Guyana's economy. Company emphasizes sustainable development and collaboration with local communities.

Insights

Energy Sector Analyst

The decision by ExxonMobil to proceed with the Whiptail development signifies a substantial investment in Guyana's energy sector. With a projected capacity of 250,000 barrels per day, this project could notably increase the country's production to around 1.3 million barrels daily. This expansion is significant considering the current global oil supply dynamics. The additional capacity from Whiptail could enhance ExxonMobil's portfolio and potentially stabilize supply chains, which have been volatile in recent years due to geopolitical tensions and the pandemic.

The investment of $12.7 billion is expected to have a multiplier effect on the local economy, potentially leading to increased employment and development of local industries. The emphasis on low emissions intensity assets aligns with the global shift towards more sustainable energy production, which could provide ExxonMobil with a competitive advantage in markets increasingly sensitive to environmental impact.

Environmental Economist

The environmental aspect of the Whiptail project is noteworthy. ExxonMobil's claim of the Stabroek block developments being among the lowest emissions intensity assets in their upstream portfolio suggests a strategic move towards environmentally conscious investments. This could be an attempt to align with global carbon reduction goals and investor preferences for sustainable projects. The long-term implications for Guyana's economy are significant, as the project promises to generate substantial revenue and support sustainable development initiatives.

However, the environmental performance of such projects must be closely monitored to ensure that they meet the stated low-emission standards. The balance between economic growth and environmental stewardship is critical, especially for a country like Guyana, which stands on the cusp of significant oil-driven development but is also vulnerable to climate change impacts.

Oil & Gas Market Research Analyst

From a market perspective, the addition of 250,000 barrels per day to the oil market could influence global oil prices, depending on the state of global demand. The timing of the Whiptail project's production target coincides with an anticipated shift in energy consumption patterns and potential advancements in renewable energy technologies.

It is also important to consider the strategic positioning of ExxonMobil in the region. With a 45% interest in the Stabroek block and a track record of successful developments, the company is solidifying its presence in South America. This could have implications for regional energy markets and ExxonMobil's market share. Investors would be keen to monitor how this development affects ExxonMobil's stock performance, particularly in relation to its peers and in the context of the broader energy sector.

• Whiptail project receives government approvals; production targeted to begin in 2027
• Sixth Stabroek block development will add capacity of 250,000 barrels of oil per day
• $12.7 billion of additional investment in Guyana’s growing economy

SPRING, Texas--(BUSINESS WIRE)-- ExxonMobil has made a final investment decision for the Whiptail development offshore Guyana, after receiving the required government and regulatory approvals. Whiptail, the sixth project on the Stabroek block, is expected to add approximately 250,000 barrels of daily capacity by the end of 2027.

“Our sixth multi-billion-dollar project in Guyana will bring the country’s production capacity to approximately 1.3 million barrels per day,” said Liam Mallon, president of ExxonMobil Upstream Company. “Our unrivaled success in developing the Guyana resource at industry-leading pace, cost and environmental performance is built on close collaboration with the government of Guyana, as well as our partners, suppliers, and contractors. The Stabroek block developments are among the lowest emissions intensity assets in ExxonMobil’s upstream portfolio and will provide the world with additional reliable energy supplies now and for years to come.”

The $12.7 billion Whiptail project will include up to 10 drill centers with 48 production and injection wells.

“We are committed to helping spread the benefits throughout the country by investing in local Guyanese communities and projects to support the country’s phased and sustainable development,” said Mallon.

Production from the six Stabroek block developments will generate tens of billions of dollars of revenue and significant economic development for Guyana. Since first production in 2019, more than $4.2 billion has been paid into the Guyana Natural Resource Fund.

There are currently 6,200 Guyanese working in support of Stabroek block operations—which is 70% of the workforce. The cumulative spend of ExxonMobil Guyana and its contractors with Guyanese suppliers since 2015 surpassed $1.5 billion at the end of 2023.

The Floating Production Storage and Offloading (FPSO) vessel for the Whiptail project, to be named Jaguar, is under construction. Three FPSOs – the Liza Destiny, Liza Unity and Prosperity – are currently operating offshore Guyana and are safely producing more than 600,000 barrels of oil per day. Construction is underway on FPSOs for the Yellowtail and Uaru projects, with Yellowtail anticipated to start production in 2025 and Uaru targeted in 2026.

ExxonMobil affiliate ExxonMobil Guyana Limited is operator and holds 45% interest in the Stabroek block. Hess Guyana Exploration Ltd. holds 30% interest, and CNOOC Petroleum Guyana Limited holds 25% interest.

About ExxonMobil

ExxonMobil, one of the largest publicly traded international energy and petrochemical companies, creates solutions that improve quality of life and meet society’s evolving needs.

The corporation’s primary businesses - Upstream, Product Solutions and Low Carbon Solutions – provide products that enable modern life, including energy, chemicals, lubricants, and lower emissions technologies. ExxonMobil holds an industry-leading portfolio of resources, and is one of the largest integrated fuels, lubricants, and chemical companies in the world. ExxonMobil also owns and operates the largest CO2 pipeline network in the United States. In 2021, ExxonMobil announced Scope 1 and 2 greenhouse gas emission-reduction plans for 2030 for operated assets, compared to 2016 levels. The plans are to achieve a 20-30% reduction in corporate-wide greenhouse gas intensity; a 40-50% reduction in greenhouse gas intensity of upstream operations; a 70-80% reduction in corporate-wide methane intensity; and a 60-70% reduction in corporate-wide flaring intensity.

With advancements in technology and the support of clear and consistent government policies, ExxonMobil aims to achieve net-zero Scope 1 and 2 greenhouse gas emissions from its operated assets by 2050. To learn more, visit exxonmobil.com and ExxonMobil’s Advancing Climate Solutions.

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Cautionary Statement

Statements of future events or conditions in this release are forward-looking statements. Actual future results, including project plans, schedules, initial capacities, production rates, and resource recoveries could differ materially due to: changes in market conditions affecting the oil and gas industry or long-term oil and gas price levels; political or regulatory developments including obtaining necessary regulatory permits; reservoir performance; the outcome of future exploration efforts; timely completion of development and construction projects; technical or operating factors; and other factors cited under the caption “Factors Affecting Future Results” on the Investors page of our website at exxonmobil.com and under Item 1A. Risk Factors in our annual report on Form 10-K. References to “recoverable resources,” “oil-equivalent barrels,” and other quantifies of oil and gas include estimated quantities that are not yet classified as proved reserves under SEC definitions but are expected to be ultimately recoverable. The term “project” can refer to a variety of different activities and does not necessarily have the same meaning as in any government payment transparency reports.

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Source: Exxon Mobil Corporation

FAQ

What is the expected daily capacity addition of the Whiptail project by 2027?

The Whiptail project is expected to add approximately 250,000 barrels of daily capacity by the end of 2027.

How much additional investment is planned for Guyana's economy through the Whiptail project?

ExxonMobil plans to invest $12.7 billion in the Whiptail project to boost Guyana's growing economy.

Who is the president of ExxonMobil Upstream Company?

Liam Mallon is the president of ExxonMobil Upstream Company.

What is the total revenue generation expected from the six Stabroek block developments?

Production from the six Stabroek block developments is expected to generate tens of billions of dollars in revenue for Guyana.

Which company is the operator and holds a 45% interest in the Stabroek block?

ExxonMobil affiliate ExxonMobil Guyana is the operator and holds a 45% interest in the Stabroek block.

How many FPSOs are currently operating offshore Guyana?

There are currently three FPSOs - the Liza Destiny, Liza Unity, and Prosperity - operating offshore Guyana.

What is the name of the FPSO vessel for the Whiptail project?

The FPSO vessel for the Whiptail project will be named Jaguar and is currently under construction.

When is the Yellowtail project anticipated to start production?

The Yellowtail project is anticipated to start production in 2025.

Who holds a 30% interest in the Stabroek block?

Hess Guyana Exploration holds a 30% interest in the Stabroek block.

How much has been paid into the Guyana Natural Resource Fund since first production in 2019?

More than $4.2 billion has been paid into the Guyana Natural Resource Fund since first production in 2019.