Italian engineering, drilling, and construction services giant Saipem has secured a new offshore contract with ExxonMobil in Guyana, covering the operator’s eighth oil discovery in the Stabroek block.
Worth around $150 million, ExxonMobil Guyana Limited awarded Saipem with a limited notice to proceed (LNTP) for the engineering, procurement, construction and installation (EPCI) of the subsea structures, umbilicals, risers, and flowlines (SURF) system for the Longtail project, located at a water depth of approximately 1,750 meters.
This paves the way for Saipem’s start of preliminary detailed engineering and procurement activities.
The execution of the main EPCI scope, including construction and installation activities, is subject to necessary governmental and regulatory approvals, as well as the final investment decision (FID). Once approved, the full contract will have an expected duration of around four years and an estimated overall value of between $750 million and $1.5 billion.
Disclosed in June 2018, the Longtail discovery is ExxonMobil’s eighth oil discovery in the Stabroek block. The Longtail- 1 well was drilled in a new reservoir, encountering approximately 256 feet (78 meters) of high-quality, oil-bearing sandstone reservoir. The well was safely drilled to 18,057 feet (5,504 meters) in 6,365 feet (1,940 meters) of water.
SBM Offshore has been appointed for the front-end engineering and design (FEED) studies for a floating production, storage, and offloading (FPSO) vessel destined for the development.
Saipem has operated in the Stabroek Block for ExxonMobil Guyana under seven offshore development contracts, four of which have already been completed, namely Liza Phase 1, Liza Phase 2, Payara, and Yellowtail.
The Stabroek block partners are ExxonMobil (operator with 45% interest), Hess ( now part of Chevron, 30%), and CNOOC Petroleum Guyana (25%).