Govt approves Whiptail project adding capacity of 250,000 barrels per day

Guyana is on the brink of remarkable economic and social transformation, with the potential of billions of dollars in revenue generation.

In line with this trajectory, the government has granted a Petroleum Production Licence to ExxonMobil, the operator of the Stabroek Block for the Whiptail Project.

The Ministry of Natural Resources on Friday, April 12, 2024, announced the sixth development in the Stabroek Block. This will further boost the production capacity of oil in Guyana’s growing industry.

With an investment of US$12.7 billion, the project will add an impressive capacity of 250,000 barrels of oil per day, ultimately resulting in a daily production of 1.3 million by the end of 2027. It includes up to ten drill centres with 48 production and injection wells.

Construction of Jaguar, another floating, production and offloading (FPSO) vessel identified for this newest development is well underway. It joins the Liza Destiny, Liza Unity, and Prosperity FPSOs, and when combined, is currently producing over half a million barrels of oil per day.

Furthermore, progress is being made on the Yellowtail and Uaru developments, with production slated to commence in 2025 and 2026, respectively.

Notably, the impact of this sixth development on Guyana’s economic landscape is anticipated to be substantial, promising employment and business opportunities for the Guyanese people.

ExxonMobil affiliate; ExxonMobil Guyana Limited is the operator of the project and holds a 45 per cent interest in the Stabroek block. Hess Guyana Exploration Ltd holds 30 per cent interest, while CNOOC Petroleum Guyana Limited holds 25 per cent interest.

The People’s Progressive Party Civic (PPP/C) Government continues to demonstrate its prudent and transparent management of the oil and gas industry.

This is evidenced by a series of legislative reforms and amendments aimed at modernising outdated laws.

These include the Local Content Act, The Modernising of the Petroleum Activities Act, and a component Natural Resources Fund Act (NRF) which embraces the Santiago Principles regarding Sovereign Wealth Funds and allows for greater transparency and accountability of revenues derived from the Petroleum Sector.

Around 6,000 Guyanese are actively participating in the oil and gas industry, representing close to 70 per cent of the total workforce.

This significant participation is facilitated by the landmark Local Content Act, currently under review to address loopholes exploited by non-compliant entities.

The aim is to ensure exclusive benefits for Guyanese citizens in terms of employment, goods, and services within the oil sector.

Senior Minister in the Office of the President with responsibility for Finance and Public Service, Dr Ashni Singh has stated that over 1600 additional Guyanese are set to be hired during the 2024-2026 period.

Additionally, the 2016 Production Sharing Agreement (PSA) has been reformed by the PPP/C Administration, thereby guaranteeing an increase in benefits for the Guyanese people.

The new model PSA includes a 10 per cent royalty rate and a 65 per cent cost recovery ceiling and profit sharing remains 50/50 between the government and the contractor, with a new corporate tax of 10 per cent.