22 C
Georgetown
Sunday, October 18, 2020

US$3.6 billion part of commitment expected for Payara development this year, approval expected soon – Rystad Energy

Must Read

Telecoms liberalisation will further boost Guyana’s oil-induced skyrocketing GDP

As Guyana is poised to become one of the fastest growing economies in the world as a result of...

New exploration wells, multiple appraisal drilling for Guyana offshore – Rystad Energy

Even as the world buckles from the impact of the global pandemic, oil exploration and production operations continue at...

T&T government urged to act urgently on tilting vessel that could spill 1.3 million barrels of crude into sea

The government of Trinidad and Tobago is being urged to act swiftly concerning a Floating Storage and Offloading (FSO)...
OilNOW
OilNow is an online-based Information and Resource Centre which serves to complement the work of all stakeholders in the oil and gas sector in Guyana.

Global oil and gas project sanctioning is set to recover and exceed pre-Covid-19 levels from 2022, with Guyana playing a key role in pushing the industry back to gains for projects set to be approved this year, according to a new report from Rystad Energy.

The Norway-based energy research and business intelligence company said Monday it projects that the Covid-19 pandemic will cause total committed spending to drop to around $53 billion from 2019’s $190 billion. “Postponed plans will, however, cause the total worth of final investment decisions (FIDs) to double next year and exceed pre-pandemic levels already from 2022.”

Rystad Energy said offshore commitments are now expected to reach $34 billion in 2020, down from 2019’s $101 billion. Onshore sanctioning is likely to fall to $19 billion this year from $89 billion last year.

“We also expect commitments worth $3.6 billion related to the Payara development off Guyana in 2020,” Rystad Energy said, referring to ExxonMobil’s 3rd proposed development offshore the South American country.

“SBM Offshore is operating under an advanced commitment on the FPSO with ExxonMobil and its partners and the contractor has started procurement activities in collaboration with Chinese and Singaporean yards,” Rystad Energy said, in reference to the Prosperity FPSO.

“The Chinese yard Shanghai Waigaoqiao Shipbuilding (SWS) is responsible for supplying the hull for the FPSO and the topsides will be built by Dyna-Mac and Keppel. It is now only a matter of when the FID takes place, and we expect it to happen soon,” the company stated.

Rystad Energy said it estimates total sanctioning to bounce back to around $100 billion in 2021, primarily supported by offshore projects, whose value is forecasted at $64 billion for the year. “Although lagging onshore projects are projected to only account for $36 billion in 2021, they will see a steep rise in 2022 to around $100 billion, topping the expected $95 billion worth of offshore commitments that year.”

The company said it has revised upwards its 2020 offshore sanctioning total from $26 billion to $34 billion. This was driven by the Mero-3 sanctioning in Brazil, which is estimated to cost $2.5 billion to first oil. MISC has a letter of intent in place with Petrobras for the charter of the FPSO. The contractor will sub-contract the vessel construction work to Chinese yards, with China Merchants Heavy Industry (CMHI) leading the race to build both the hull and topsides. Siemens will deliver the power generation modules, while Aker Solutions is performing front-end engineering and design (FEED) and engineering work on the FPSO topsides.

Before the oil price crash, Shell had awarded a major contract to Sembcorp Marine for construction of the topsides and hull of a Floating Production Unit (FPU) for the Whale project in the US Gulf of Mexico. Now uncertain economic conditions have forced Shell to defer FID for the project to 2021. Whale has a breakeven of over $40 per barrel. “As the second wave of Covid-19 surges through Europe, America and South Asia, it is uncertain whether the new development will start anytime soon, as the social distance norms and quarantine requirements will not only hamper the pace of development but could also lead to cost overruns,” Rystad Energy stated.

When it comes to recent developments, it said Gazprom Neft has started development activities on its Chayandinskoye oil-rim development in Russia. The well construction program is under way and the expansion of the existing central processing facility at the main field is likely to start soon. The onshore development is estimated to cost around $1.3 billion and the field is expected to come online by 2022.

Recently, the Norwegian Ministry of Petroleum and Energy approved the plan for development and operation (PDO) of the Balder Future project, Rystad Energy said.

“The partners, Vaar Energi and Mime Petroleum, submitted a revised PDO in December last year and selected their preferred contractors in 2019,” the company stated. “The $2 billion development plan includes an upgrade of the Jotun floating production, storage, and offloading (FPSO) vessel which will operate between the Balder and Ringhorne fields.”

The FPSO is being upgraded by Worley, while Baker Hughes and Ocean Installer are responsible for supplying the subsea facilities.

Lastly, Rystad Energy said China Offshore Oil Engineering Co. (COOEC) confirmed the start of development activities on CNOOC’s Luda 6-2 oilfield off China in its second-quarter results. The Luda 6-2 development will entail a central processing platform and is estimated to cost nearly $170 million in greenfield commitments. Production is likely to start in early 2022.

- Advertisement -

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest News

New exploration wells, multiple appraisal drilling for Guyana offshore – Rystad Energy

Even as the world buckles from the impact of the global pandemic, oil exploration and production operations continue at...

Telecoms liberalisation will further boost Guyana’s oil-induced skyrocketing GDP

As Guyana is poised to become one of the fastest growing economies in the world as a result of the massive oil discoveries made...

U.S. expresses concern over tilting oil vessel near T&T, supports efforts to avert potential disaster

The United States through its Embassy in Trinidad and Tobago said on Friday it is concerned by the potential risk to safety and environment...

T&T government urged to act urgently on tilting vessel that could spill 1.3 million barrels of crude into sea

The government of Trinidad and Tobago is being urged to act swiftly concerning a Floating Storage and Offloading (FSO) vessel that is tilting precariously...

As Guyana discoveries mount experts say oil and gas will remain backbone of global energy supply

Even with plummeting demand due to the global pandemic and the move towards renewables, experts believe that oil and gas will still remain the...

More Articles Like This