Historic reunion with Exxon in Guyana fuels MODEC’s US$7.85 billion H1 orders

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OilNOW
OilNOW
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MODEC recently celebrated its order from ExxonMobil to provide the Errea Wittu floating production, storage, and offloading (FPSO) vessel for the Uaru project located offshore Guyana. This order has been noteworthy for the company as it marks its first venture in the South American country and the first order received from ExxonMobil since 2003.

In a recent mid-year report, MODEC announced that its annual orders are poised to achieve an all-time high. During the first half of this year, the total orders amassed an impressive US$7.85 billion, thanks to an influx of FPSO orders from industry giants like Equinor, Woodside, and ExxonMobil.

The Guyana-bound FPSO on Modec’s order book is slated to have the most substantial oil production capacity among its peers, clocking in at 250,000 barrels per day (bpd).

MODEC’s considerable order uptick from approximately US$556 million in the same period last year can be attributed to the new construction projects initiated for ExxonMobil Guyana’s Uaru venture and Equinor Brasil Energia’s projects in Brazil. Notably, MODEC’s consolidated revenue reached approximately US$1.6 billion, showing growth from the same period last year which was approximately US$1.4 billion.

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The rising revenue, coupled with profits from ongoing construction projects and investments made using the equity method, yielded an operating profit of US$49 million for the company. However, costs tied to improving the integrity of assets in Brazil marginally impacted the profits. Another bright spot in the financials was the increase in finance income due to recognised exchange gains. This pushed the pre-tax profit for the first half to approximately US$54 million, a significant jump from approximately US$25 million as of the second half of last year. Consequently, the owners of the parent company enjoyed a profit of almost US$24 million, a marked improvement over approximately US$15 million from the same period in the previous year.

The oil production landscape offshore Guyana is expanding at a breakneck pace, leading to an industry-wide push for high-capacity FPSO units.

Dutch floater specialist SBM Offshore have so far received the bulk of the orders from Exxon for its Guyana operations, delivering three floaters to the Stabroek Block to date, with a third under construction. The increasing orders are game-changers for both SBM and MODEC.   

Errea Wittu is geared up to achieve its first oil milestone by 2026. With this development, the total production offshore Guyana is set to surpass 1 million bpd. 

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