Exxon Mobil Corp (XOM.N) and its partners have approved a US$12.7 billion investment for their fifth and most expensive offshore oil project in Guyana, the U.S. firm said in a statement.
The project called Uaru will produce up to 250,000 barrels of oil and gas per day and cost 27% more than the prior of equivalent size, reflecting rising costs. The decision coincides with Exxon considering whether to expand its holdings in Guyana through an auction of oil blocks set for July.
Exxon and partners Hess Corp (HES.N) and CNOOC Ltd (0883.HK) control all production in the South American nation, which according to consultancy Rystad Energy is set to leapfrog the United States next decade as one of the world’s largest offshore producers.
“Our Guyana investments and unrivalled development success continue to contribute to secure, reliable global energy supplies,” said Liam Mallon, president of Exxon’s oil and gas producing business.
The Exxon-led group inaugurated production in 2019 and so far has budgeted $42.7 billion for the five approved projects in Guyana. Together, they are expected to produce more than 1 million barrels of oil and gas per day by late 2026.
Actual production could exceed planned capacity if the newest projects replicate the better-than-expected results of the first two projects.
The Liza Destiny and Unity vessels are currently delivering 375,000 boed, 10% above planned capacity. The two vessels may end the year producing up to 400,000 boed combined, Hess said Wednesday on a conference call in which it announced a new discovery.
Uaru’s production vessel, called Errea Wittu, will be built by Japan’s Modec Inc and produce for at least 20 years, Exxon said. It will oversee up to 10 drill centers and 44 production and injection wells aimed at developing more than 800 million barrels of oil supply.
Reporting by Sabrina Valle (Reuters)
