Exxon awards contract for Payara’s Prosperity FPSO to Dutch company

– Minister Bharrat says strong local content framework to benefit all Guyanese needed

Just one day after the signing of the Payara Production Licence, Esso Exploration and Production Guyana Limited (EEPGL) has awarded the contracts for the construction, installation, and leasing and operation of the Prosperity Floating, Production, Storage and Offloading (FPSO) vessel for the Payara Development Project to Dutch company SBM Offshore.

Government and ExxonMobil, whose local affiliate, EEPGL, has the majority interest and is the main operator in the oil-rich Stabroek Block, signed the petroleum agreement for the Payara project on Wednesday. This is Exxon’s third development project offshore Guyana.
On Thursday, SBM Offshore, a global leader in floating, production and mooring systems, announced that EEPGL has confirmed the award of contracts for the next phase of the Payara development project. The Dutch company was also awarded the contracts for the Liza Destiny and Unity FPSO vessels.
Under these new contracts, SBM Offshore will operate the Prosperity FPSO for a period of two years, after which the ownership and operation of the vessel would be transferred to EEPGL.
“The award follows completion of front-end engineering and design studies, completion of the multi-purpose hull, receipt of requisite Government approvals, and the final investment decision on the project by ExxonMobil and block co-venturers,” the company said in a missive on its website.
The Prosperity FPSO will utilise a design that largely replicates the design of the Liza Unity FPSO, which is currently being constructed in Singapore. Both of these vessels are larger than the Liza Destiny FPSO that is presenting being used for oil production.

In fact, it was noted that the Prosperity FPSO design is based on SBM Offshore’s industry leading Fast4Ward® programme, which incorporates the Company’s new-build, multi-purpose hull combined with several standardised topside modules.
The Prosperity FPSO will be designed to produce 220,000 barrels of oil per day, and will have associated gas treatment capacity of 400 million cubic feet per day, as well as water-injection capacity of 250,000 barrels per day. The FPSO will be spread-moored in water depth of about 1,900 metres, and will be able to store approximately two million barrels of crude oil.
The US$9 billion Paryara development will target an estimated resource base of about 600 million oil-equivalent barrels. Ten drill centres are planned, along with up to 41 wells, including 20 production and 21 injection wells.
Chief Executive Officer of SBM Offshore, Bruno Chabas, said this contract is under the existing long-term FPSO supply agreement with ExxonMobil.
“This award demonstrates the competitiveness of world class deep-water reservoirs and the added value that SBM Offshore’s Fast4Ward® programme brings to these large-scale developments. The SBM Offshore team is proud that the constructive collaboration with the ExxonMobil team continues, while contributing to the development of the offshore energy industry in Guyana,” Chabas noted.
Meanwhile, as a result of the award from EEPGL, SBM Offshore said it anticipates the award of contracts to Guyanese companies for work to be performed in Guyana.
For example, the Dutch Company outlined that it is looking at executing scope for fabrication and coating of a portion of the light structural steel for the FPSO in Guyana, which would be a first for SBM Offshore in the country.
Additionally, SBM Offshore is preparing to recruit and employ Guyanese engineers into the Payara project team. Both activities are focused on development of Guyanese capacity, building on efforts to date for the Liza Destiny and Liza
Unity FPSOs.
This comes on the heels of Natural Resources Minister Vickram Bharrat emphasising the need to have a Local Content Policy and Legislation in place that will ensure the benefits from the oil and gas sector trickle down to all Guyanese.
In fact, after signing the Paraya Licence on Wednesday, the Natural Resources Minister said that Exxon has committed to working with the Local Content Advisory Panel. Bharrat noted that any Local Content Policy must ensure that not only big companies in Guyana benefit from the petroleum industry, but also the small man; that is, from farmers to the fishermen to the people producing water and doing laundry services, as well as those with services such as fabrication and welding.
“You have these FPSOs (Floating, Production, Storage and Offloading vessel) and these ships that are drilling out there and the other shore-based companies that need basic things: laundry services, they need drinking water, they need groceries and vegetables, and these are things that we can produce in Guyana. So, we need a strong local content framework and legislation to ensure from the farmer to the fisherman benefits; and not only the big companies, but every single Guyanese,” Minister Bharrat asserted.
Only recently, the Natural Resources Minister met with the members of the Advisory Panel on Local Content and was updated on the work of the Panel, and also shared Government’s views and positions on critical issues.
The Local Content Panel was established by President Irfaan Ali, and is tasked with undertaking a review of all existing initiatives and policies relating to local content in the petroleum sector, and to provide guidance for the development of Guyana’s Local Content Policy and Legislation.
The Panel is chaired by Shyam Nokta and includes Carl Greenidge, Anthony Paul, Kevin Ramnaraine, Carvil Duncan and Floyd Haynes.
They are expected to meet with key stakeholders this month in Government, Private Sector and Civil society, to solicit inputs and perspectives before submitting a report and recommendations in November 2020.