MODEC given greenlight by Exxon to begin designing FPSO for Hammerhead project

…company aiming for earliest start up date in 2029

Japanese company MODEC has been given the greenlight to begin designing and eventually build a Floating Production Storage and Offloading (FPSO) vessel for the Hammerhead project, which will be ExxonMobil’s seventh oil development in the Stabroek block.

It was announced by MODEC that it was awarded a Limited Notice to Proceed (LNTP) contract by ExxonMobil, to build the FPSO vessel. The Hammerhead project, which has an earliest start-up date of 2029, has not yet been approved by the government.
As such, the LNTP contract allows MODEC to proceed with the design of the FPSO vessel, which will have a capacity to produce 150,000 barrels of oil per day, in phase one of the construction process.
According to a statement from the company, phase two of the project, which is the actual construction and installation of the vessel, will be subject to regulatory approvals and project sanction by Exxon and its partners.
“Phase one encompasses Front-End Engineering and Design (FEED) while phase two covers Engineering, Procurement, Construction, and Installation (EPCI). The LNTP allows MODEC to start activities related to the FPSO design to ensure the earliest possible project startup in 2029, should the project receive the necessary government approvals.”
“The performance of the second phase (i.e., construction and installation) is subject to government and regulatory approval as well as project sanction by ExxonMobil Guyana Limited and its Stabroek Block co-venturers,” the company explained, adding that they will also be able to manage the maintenance of multiple FPSO’s under a long-term contract.
The statement also quoted MODEC Group President and CEO Hirohiko Miyata, who expressed optimism for the project and the opportunity to build a second FPSO for Exxon’s local operations.
“We are incredibly honored and excited to have been awarded this contract. It is a testament to our team’s dedication, expertise, and commitment to delivering innovative and reliable offshore floating solutions.”
“We look forward to collaborating closely with ExxonMobil Guyana to ensure the successful delivery of this second FPSO, contributing to the advancement of the offshore energy sector in Guyana,” he said.
The Hammerhead FPSO will have the capacity to produce 150,000 barrels of oil per day (BOPD), along with associated gas and water. It will be moored at a water depth of approximately 1,025 meters. MODEC is also building the Errea Wittu FPSO, which is earmarked for ExxonMobil Guyana’s fifth development, the Uaru project.
The Environmental Protection Agency (EPA) has meanwhile started its assessment of the Hammerhead Development, which is expected to feature up to 30 wells and reportedly has better reservoirs than previous developments.
President of ExxonMobil Guyana Limited (EMGL) Alistair Routledge had earlier this year rated the Hammerhead project, as a strong market prospect with the potential to produce even better-quality oil than the Liza fields.
He had explained that while the American Petroleum Institute (API) rating for the Hammerhead crude was measured at between 20 and 25, the reservoirs are potentially better than Liza One and Two developments.
Exxon, through its local subsidiary ExxonMobil Guyana, is the operator of the Stabroek Block and holds 45 per cent interest in the Block. 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.
The Liza Phase One, Liza Phase Two and Payara projects, which are producing overall more than 600,000 barrels of oil per day, account for the three FPSO vessels operating in Guyana’s offshore Stabroek Block.
One week ago, Guyana welcomed the arrival of the One Guyana FPSO into local waters. Built by SBM Offshore, the One Guyana FPSO will support ExxonMobil Guyana’s Yellowtail development in the prolific Stabroek Block. As a matter of fact, necessary installation activities for the One Guyana FPSO vessel have already begun, following the vessel’s arrival.