ExxonMobil puts third Guyana FPSO on hold

ExxonMobil has suspended work on a third floating production, storage and offloading (FPSO) vessel earmarked for the 220,000 b/d Payara oil project in Guyana as its awaits government clearance of its development plan.

The FPSO is "on hold pending government approval," the US major said.

Payara is part of ExxonMobil's plan to expand crude production on its deepwater Stabroek block to 750,000 b/d by 2025.

The government's approval of Payara was delayed by a post-election power struggle in Georgetown that was finally resolved in early August.

ExxonMobil said it continues to advance its second Stabroek development - Liza 2 – with projected start of production in 2022, targeting 220,000 b/d.

The government has completed a draft license agreement for Payara, and this will be reviewed by the government for signing "in a few days," the natural resources ministry said on 3 September.

"Upon successful conclusion of the negotiations and approval, Payara will follow Liza 1 and Liza 2," Guyana's natural resources minister Vickram Bharrat said today, reacting to ExxonMobil's announcement of its 18th oil discovery at the Redtail-1 well on Stabroek.

ExxonMobil operates 6.6mn-acre Stabroek with a 45pc stake. US independent Hess holds 30pc, and the remaining 25pc belongs to Chinese state-owned CNOOC unit Nexen.

The consortium started a series of discoveries at the Liza-1 well in 2015. It started production in December 2019 and was producing around 85,000 b/d as of the end of August, short of a 120,000 b/d forecast, because of a compression issue.

The Redtail discovery adds to the 8bn bl of recoverable resource on the block, ExxonMobil said.

Redtail-1 was drilled in 6,164ft of water and found approximately 232ft of high-quality oil-bearing sandstone, the company said.

Redtail-1 is located approximately 1.5mi northwest of the Yellowtail discovery - the company's 15th on the Stabroek block that it announced in April 2019.

By Canute James