ExxonMobil completes US$1.2B purchase of Prosperity FPSO

…1 year ahead of lease expiration

ExxonMobil Guyana, which has been leasing the Prosperity Floating production Storage and Offloading (FPSO) vessel that is servicing the third oil project offshore Guyana, has now purchased the vessel outright in a more than US$1 billion deal.
According to information released by Dutch shipbuilder SBM Offshore, ExxonMobil Guyana has completed the US$1.23 billion cash consideration purchase of the Prosperity FPSO vessel. The purchase was done one year ahead of the max expiration term of its lease with SBM for use of the vessel, which would have been November of next year.
The Prosperity FPSO has been on hire since November 2023, when the Payara oil development first delivered first oil. According to SBM, ExxonMobil will now continue its operation and maintenance of the project, combining their expertise with SBM’s.
“The purchase allows ExxonMobil Guyana to assume ownership of the unit while SBM Offshore will continue to operate and maintain the FPSO up to 2033. The transaction comprises a total cash consideration of US$1.23 billion,” SBM explained.
“The net cash proceeds will primarily be used for the full repayment of the US$0.98 billion project financing and as such will decrease SBM Offshore’s net debt position. The impact of the transaction will be included in the update of the Company’s 2024 guidance as part of the Third Quarter 2024 Trading Update, scheduled for November 14, 2024.”

It had previously been reported that Exxon was mulling the early purchase of the Prosperity FPSO. As a matter of fact, the Liza Destiny FPSO which services the first oil development and has a max lease term that extends to 2029, was also reported to be on their radar.
The Liza Destiny and Prosperity FPSOs are two of three FPSOs currently operating in Guyana’s offshore waters. The other one, Liza Unity, is producing oil in the Stabroek Block’s Liza Phase 2 development.
ExxonMobil completed the purchase of the Liza Unity FPSO from SBM Offshore for some US$1.26 billion in November 2023. The vessel had been on hire since February 2022, and in 2023 had been operated through the integrated operations and maintenance model, wherein SBM Offshore and ExxonMobil’s expertise and experience had been combined.
At the time of that purchase the transaction had been completed a few months ahead of the end of the maximum lease term, which was set for February 2024. SBM Offshore has notwithstanding been tasked with continuing to operate and maintain the FPSO up to 2033.
The Stabroek Block is 6.6 million acres (26,800 square kilometres). Exxon, through its local subsidiary Esso Exploration and Production Guyana Limited (EEPGL), holds 45 per cent interest therein. Hess Guyana Exploration Ltd holds 30 per cent interest, and CNOOC Petroleum Guyana Limited, a wholly-owned subsidiary of CNOOC Limited, holds the remaining 25 per cent interest.
Six FPSOs are expected to be operating offshore Guyana by 2027. The fourth FPSO, dubbed the ‘One Guyana’ FPSO, is currently being built by SBM, which had in 2022 been contracted by Exxon to construct, install, and then lease and operate the vessel.
When completed, this vessel would operate in the Yellowtail development. It is expected to begin producing oil in the second half of next year, when production is expected to reach 250,000 barrels of oil per day. SBM’s latest update on the project is that it is 75 per cent completed.
The fifth FPSO, which would be named ‘Errea Wittu’, meaning “abundance” in the Warrau Indigenous language, would meanwhile operate in the Urau project. It would have an oil storage capacity of two million barrels, an oil production design rate of 250,000 barrels per day, and be able to offload approximately one million barrels onto a tanker in approximately 24 hours.
This vessel would be delivered by MODEC, a Japanese company that has confirmed construction of this FPSO. Start-up of the US$12.7 billion Urau development is targeted for 2026.
‘Jaguar’, the sixth FPSO, is earmarked for Exxon’s Whiptail project. Government has said that by the time this FPSO comes online in 2027, Guyana is expected to be producing as much as 1.2 million barrels of oil per day. This FPSO is currently in the final stages of construction.