Exxon Mobil Corp. filed an environmental authorization application with the Guyana government Monday for an investment that’s expected to boost the country’s overall production capacity to nearly 1.5 million barrels a day, about the same as OPEC member Nigeria.
Exxon took the first step toward its seventh oil project in Guyana, a clear signal the supermajor intends to expand crude output from the South American nation into the next decade.
The Hammerhead project will pump as much as 180,000 barrels a day as soon as 2029, pending Guyanese government approval, Exxon country manager Alistair Routledge said in an interview.
Proceeding with an additional investment likely to total several billion dollars underlines the company’s commitment to the sparsely-populated South American nation.
Exxon’s aggressive plans have already made Guyana the third fastest growing oil-producing country outside of OPEC in recent years and a key contributor to global supplies.
Guyana has been a vital part of Exxon’s post-pandemic stock revival because its crude is among the most profitable outside of the Middle East, with a break-even cost of less than $35 a barrel.
Hammerhead’s capacity will be about 30% lower than the three previous offshore installations and the smallest since the first Guyana project started output in 2019.
Exxon tailored the floating production, storage and offloading vessel, or FPSO, to fit the target oilfield’s specific needs, Routledge said. The downsized vessel isn’t a sign that the nation’s resources are in any way diminishing.
“It’s the right solution for the particular resource in this part of the block,” Routledge said. “For other resources, we again expect some larger facilities.”
Exxon first discovered oil in Guyana’s Stabroek block in 2015 and has since made more than 30 major discoveries encompassing more than 11 billion barrels of recoverable reserves.
The Texas supermajor operates the block and owns a 45% stake. Hess Corp. and China’s Cnooc Ltd. own the remaining 30% and 25%, respectively.
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