GUYANA'S Economic Horizon Brightens with ExxonMobil's Whiptail Development Project

GEORGETOWN, Guyana April 14, 2024 - In a landmark move for Guyana's burgeoning oil industry, the Government of Guyana has awarded ExxonMobil a Petroleum Production License for the Whiptail Development Project within the Stabroek Block, heralding a new chapter of economic prosperity and energy security. 

Announced from ExxonMobil's Texas headquarters on April 12, 2024, the Whiptail development stands as the company's sixth venture in the region, poised to significantly elevate Guyana's oil production capabilities.

Projected to commence operations by the end of 2027, Whiptail is expected to contribute an impressive 250,000 barrels of oil daily to Guyana's production, pushing the national output to approximately 1.3 million barrels per day. 

This multi-billion-dollar initiative, with a lifespan extending over 20 years, is set to include up to 10 drilling centers alongside 48 production and injection wells, marking a substantial leap in the country's energy development.

President of ExxonMobil Upstream Company, Liam Mallon, emphasized the project's adherence to high environmental and operational standards, stating, "Our unmatched success in Guyana, driven by collaboration with the Government and partners, exemplifies our commitment to environmental stewardship while ensuring reliable energy supplies for the global community."

In line with rigorous environmental and financial safeguards, the Whiptail permit introduces a decommissioning fund in accordance with the Petroleum Activities Act of 2023. This ensures that ExxonMobil, within two years of the license date, will establish terms for the fund's management and disbursement, safeguarding the state from potential decommissioning liabilities.

Moreover, the project mandates comprehensive insurance coverage in alignment with the Petroleum Act, with documentation to be submitted to the Minister 90 days prior to operational commencement, reinforcing the commitment to operational integrity and accountability.

The construction of the Jaguar FPSO (Floating Production, Storage and Offloading vessel) is already underway, joining the fleet of Liza Destiny, Liza Unity, and Prosperity FPSOs that collectively produce over half a million barrels of oil daily. Awarded contracts by SBM Offshore, the Jaguar FPSO is part of ExxonMobil's Whiptail development, showcasing the Fast4Ward® program's innovative design and capacity to bolster Guyana's oil production.

The imminent production from the Yellowtail and Uaru developments in 2025 and 2026, respectively, coupled with the Whiptail project, promises a cascade of economic benefits and employment opportunities for Guyanese citizens. 

Currently, approximately 6,000 Guyanese, representing nearly 70% of the oil and gas industry's workforce, are engaged in the sector. This is set to expand with the hiring of over 1,600 additional workers from 2024 to 2026, underpinned by legislative efforts to enhance local content and ensure maximal benefits for Guyanese in the oil industry.

ExxonMobil Guyana Limited, alongside its partners Hess Guyana Exploration Ltd and CNOOC Petroleum Guyana Limited, remains at the forefront of this transformative project, which not only signifies a leap towards energy independence but also anchors Guyana's position on the global energy map as a key player and beneficiary in the oil and gas sector.

With ExxonMobil's investment, Guyana is poised to see a ripple effect across its economy. The project is not only expected to generate significant revenue for the country but also to create myriad opportunities for local businesses and entrepreneurs, thereby amplifying local content and participation in the burgeoning sector. The focus on local engagement and capacity building, as emphasized by the ongoing review of the Local Content Act, aims to fortify the economic foundations of Guyana, ensuring that the fruits of this venture are widely shared among its citizens.

The government's strategic approach to negotiating terms within the new model Production Sharing Agreement (PSA), including a 10 percent royalty rate and a new corporate tax of 10 percent, exemplifies Guyana's commitment to ensuring equitable benefits from its oil resources. This balanced framework aims to attract further investment while securing a fair share of profits for national development and welfare.

Moreover, the introduction of a decommissioning fund and stringent insurance requirements underscores a forward-thinking approach to environmental stewardship and risk management. These measures reflect a comprehensive strategy to safeguard Guyana's natural and economic landscapes, ensuring that the Whiptail project contributes to sustainable growth and environmental integrity.

As Guyana stands on the cusp of this transformative project, the anticipation among its citizens and stakeholders is palpable. The Whiptail Development Project is not just about tapping into the earth's resources; it's about unlocking potential, fostering resilience, and building a brighter future for Guyana. With every barrel produced, Guyana moves closer to realizing its vision of becoming a leading energy powerhouse, driven by innovation, sustainability, and shared prosperity.

In the words of Senior Minister in the Office of the President with responsibility for Finance and Public Service, Dr. Ashni Singh, "This project is a milestone in our nation's journey towards economic empowerment and environmental sustainability. It embodies our aspirations for a future where Guyana thrives as a vibrant, inclusive, and resilient economy."

As the Whiptail Development Project progresses, it stands as a symbol of progress, collaboration, and hope, marking a new chapter in Guyana's story—one of growth, opportunity, and enduring partnership on the global stage.

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