MODEC calling the shots for new Guyana-bound FPSO destined for ExxonMobil’s 7th oil & gas project

ExxonMobil Guyana, a subsidiary of the U.S.-headquartered ExxonMobil, has put Japan’s MODEC in charge of a new floating production, storage, and offloading (FPSO) unit, which will be deployed on its seventh oil and gas project in the Stabroek block off the coast of Guyana.

ExxonMobil set the wheels in motion to obtain the required approvals for Hammerhead as its seventh deepwater oil project in Guyana to add between 120,000 and 180,000 barrels per day (bpd) by 2029, raising the country’s overall production capacity bar to nearly 1.5 million bpd.

This project in the eastern half of the Stabroek block is located in the Hammerhead field, around 160 kilometers northeast of the coastline of Georgetown in water ranging in depths of about 750 to 1,200 meters. The company applied for environmental authorization with the Guyana Environmental Protection Agency (EPA) in June 2024 to develop Hammerhead.

Upon reviewing the application, the EPA determined that an environmental impact assessment (EIA) was required. After submitting its environmental impact assessment for the development of the project, ExxonMobil has now hired MODEC to develop an FPSO vessel for Hammerhead.

According to the Japanese giant, this contract represents a limited notice to proceed (LNTP), pending necessary government and regulatory approval, with phase one encompassing front-end engineering and design (FEED) while phase two covers engineering, procurement, construction, and installation (EPCI).

The project will entail drilling approximately 14 to 30 development wells, including production and water injection wells; installation and operation of subsea umbilicals, risers, and flowlines equipment; installation and operation of an FPSO; installation of an 13-kilometer-long gas export pipeline from the FPSO that will connect into the gas-to-energy pipeline; and ultimately, decommissioning of the project.

The development is expected to employ up to 540 people during the drilling and installation stage, 600 people during the commissioning and start-up stage, and 100 to 160 people during the production operations stage.

Hirohiko Miyata, MODEC Group President and CEO, commented: “We are incredibly honored and excited to have been awarded this contract. It is a testament to our team’s dedication, expertise, and commitment to delivering innovative and reliable offshore floating solutions.

“We look forward to collaborating closely with ExxonMobil Guyana to ensure the successful delivery of this second FPSO, contributing to the advancement of the offshore energy sector in Guyana.”

Furthermore, the LNTP enables MODEC to start activities related to the FPSO design to ensure the earliest possible project start-up in 2029, should the project receive the necessary government approvals. The company underlines that the performance of the second phase related to the construction and installation work is also subject to government and regulatory approval.

In addition, it is subject to project sanction by ExxonMobil and its Stabroek block co-venturers, Hess and CNOOC. Currently, arbitration proceedings are underway over Hess’ proposed merger with Chevron.

Meanwhile, the operations and maintenance enabling agreement (OMEA) for MODEC’s Guyana fleet has been established to allow the operations and maintenance of multiple FPSOs under a long-term contractual arrangement.

The Japanese player elaborates that the FPSO Hammerhead, which will have the capacity to produce 150,000 barrels of oil per day (bopd), along with associated gas and water, will be moored at a water depth of approximately 1,025 meters using a SOFEC Spread Mooring System.

This will be MODEC’s second FPSO for use in Guyana, following the FPSO Errea Wittu, which is currently being built for ExxonMobil Guyana’s Uaru project. The Japanese player disclosed progress in the construction of the FPSO in October 2024, with the completion of the hull block assembly 40 days ahead of the original schedule. China’s Dalian Shipbuilding Industry Company (DSIC) launched the FPSO in December 2024.

The list of ExxonMobil’s five other projects in Guyana includes Liza Phase 1 and Phase 2, Payara, Yellowtail, and Whiptail. Following its first oil discovery in Guyana’s Stabroek block in 2015, the American energy giant has since found over 30 major discoveries, entailing recoverable resources surpassing 11 billion barrels of oil equivalent.

Currently, six FPSOs with a gross production capacity of more than 1.2 million barrels of oil per day are expected to be deployed by the end of 2027, but ExxonMobil has also hinted at the potential for up to ten such units in Guyanese waters.

MODEC’s latest FPSO win comes shortly after the firm secured a long-term operations and maintenance job with Shell for an FPSO set to work on a development project within the pre-salt area of the Santos Basin in Brazilian waters.