ExxonMobil affiliate Esso Exploration and Production Guyana Limited (EEPGL) will make a Final Investment Decision (FID) on its fourth project to be developed at the Stabroek Block, at Yellowtail, pending government and environmental approvals.
Initial estimates have so far indicated that the project will cost GY$1.8 trillion (US$9 billion). This was noted in the project’s Environmental Impact Assessment (EIA). Exxon was keen to note that the project costs are anticipated to increase given the higher numbers of development wells and associated drilling costs when compared to its Payara project which carries a similar price tag.
As a result of this level of investment, the company said the project will generate benefits for the citizens of Guyana in several ways, including through revenue sharing with the Government of Guyana, as detailed in the Petroleum Agreement between the Government of Guyana and EEPGL which was made available to the public in December 2017. Exxon said the type and extent of benefits associated with revenue sharing will depend on how decision-makers in government decide to prioritize and allocate funding for future programmes, which is unknown to the company and outside the scope of the EIA.
Furthermore, Exxon said Guyana stands to benefit from the procurement process that will follow for goods and services from local businesses in alignment with the Petroleum Agreement and its Local Content Plan approved by the Ministry of Natural Resources in June 2021.
The company pointed out that Guyanese will also be hired to be part of the operations while adding that capacity building will also take place. Towards this end, the company said the Greater Guyana Initiative (led by Exxon and Stabroek Block co-venturers Hess and CNOOC), includes programmes that support the University of Guyana, technical schools, and business development for greater economic growth.
In addition to direct revenue sharing, expenditures, and employment, Exxon said the project will also likely generate induced economic benefits. The subsidiary was keen to note that these beneficial “multiplier” impacts are expected to occur throughout the Project life.
The Yellowtail Development is targeting 250,000 barrels of oil per day, the largest volumes yet for a single development offshore the South American country. Consultations on its EIA will get underway on Monday at the Umana Yana.