Seeking to partner with Dutch contractor, SBM Offshore NV 

International oil giant, Exxon Mobil is advancing talks around the building of a fourth multibillion-dollar production unit to develop its Guyana oil discoveries.

Informed sources say the oil giant is now locked in discussions with Dutch contractor, SBM Offshore NV, which it is seeking  to hire to build out the oil production rig. Two individuals close to the negotiations have informed Reuters that the talks include the potential for some future platform assembly in Guyana.

Spokespeople for Exxon and SBM Offshore declined to comment when contacted. However, Guyana is keen to get the negotiations out of the way so that construction of the production unit can start, given its thrust to develop an oil industry infrastructure to boost the economy and job growth.  

Guyana eager to get the discussion out of the way

Guyana  is home to the world’s biggest offshore discoveries in years with 10 billion barrels of recoverable oil and gas. Guyana’s vice president, Bharrat Jagdeo told Reuters that discussions include potential made-in-Guyana requirements to build part of future production units.

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

Guyana kicked off production in 2019 and is rushing to draft oil legislation and establish regulatory bodies for the industry.

An Exxon-led consortium is responsible for all output in the country. Exxon could choose a platform builder within six months, one of the people said. Vessels similar in size to the proposed facility cost around $2.5 billion to $3 billion.

Netherlands-based SBM has been awarded Exxon contracts to build Guyana’s first three floating production storage and offloading (FPSO) vessels, as such units as called. Most of the construction has taken place in Singapore.

Exxon looking at installing 10 FPSOs in its massive Stabroek oil block

Exxon has said it sees potential for installing 10 FPSOs in its massive Stabroek oil block, which encompasses 6.6 million acres (27,000 square km) off Guyana’s coast. The first six vessels could pump more than one million barrels of oil and gas per day (bpd) by 2027, consortium member Hess Corp (HES.N) said last month.

The group’s first FPSO produced 124,000 bpd in the third quarter, Hess said. A second floating platform that can produce 220,000 bpd arrived in October, with initial output due early next year. 

SBM has started building the third vessel in Singapore, with output from it expected in 2024. The fourth vessel is aimed at producing 250,000 bpd starting in 2025, pending government approval and project sanctioning, Hess said.

Starting with the fifth FPSO, Exxon is expected to organise bids and open competition for contractors, welcoming new builders to one of the world’s largest offshore markets, one of the people familiar with the talks said.