Exxon Mobil gets Guyana’s approval for fourth offshore oil project

Reuters

Exxon Mobil Corp (XOM.N) on Friday received approval to begin work on its fourth offshore oil project in Guyana from the South American country’s Environmental Protection Agency.

The permit will allow Exxon to begin construction and operation of its Yellowtail project, the latest of up to 10 expected to be producing oil this decade. A final decision by Exxon on funding the project is pending.

An Exxon spokesperson confirmed the approval.

Since Exxon and partners Hess Corp (HES.N) and CNOOC Ltd started exploring off the coast of the Guyana in 2015, they have found more than 10 billion barrels of oil and gas.

Yellowtail was the consortium’s 13th discovery in the Stabroek block, an area covering 6.6 million acres (26,800 square kilometers) and one of the largest oil finds in South America.

When output begins in 2025, the project would pump up to 250,000 barrels of oil and gas per day, the company has said. Exxon has proposed a development plan for Yellowtail that would require up to three ships drilling up to 67 wells.

The Guyana EPA permit prohibits routine flaring and venting of natural gas during operation and requires Exxon to keep an undersea device, called a capping stack, that can seal a well in event of an accident, according to a statement by the Guyana EPA.

It also required that the partners have insurance to cover any environmental damages and provide a guarantee that indemnifies Guyana in event the consortium fails to meet their obligations, the EPA said.

Earlier this year, Exxon started up a new floating production, storage and offloading vessel that will bring the group’s oil production capacity this year to more than 340,000 bpd.

Reporting by Gary McWilliams and Neil Marks; Editing by Leslie Adler