Guyana’s fifth and largest Floating Production, Storage and Offloading vessel, the Errea Wittu, has arrived offshore, positioning the country to surpass one million barrels of oil production per day for the first time.
The MODEC-built vessel will operate at the Uaru development in the Stabroek Block and is designed to add approximately 250,000 barrels per day to national production. First oil is expected in September.
The US$12.7 billion Uaru development targets more than 800 million barrels of recoverable oil and represents another major expansion of Guyana’s petroleum production capacity.
President Dr Irfaan Ali, during his press conference on Tuesday, had announced that the vessel, which departed Singapore earlier this month, was expected to arrive in Guyana this week.
“It is a larger FPSO in Guyana’s fleet … and will push national output above one million barrels a day for the first time,” President Ali said.
The Errea Wittu will join the four FPSOs currently producing in the Stabroek Block — Liza Destiny, Liza Unity, Prosperity and One Guyana — which together are producing approximately 900,000 to 920,000 barrels of oil per day.
Minister of Natural Resources Vickram Bharrat said the arrival represents another important chapter in Guyana’s oil and gas development.
Minister of Natural Resources Vickram Bharrat
“With first oil expected in a matter of weeks, production is poised to cross the one-million-barrel-per-day mark. This is a major development for our country and one that brings with it greater responsibility to ensure Guyanese continue to benefit from the sector,” Bharrat said.
The minister said the government remains committed to transparency in the management of petroleum revenues and to ensuring Guyanese benefit from the opportunities created by the industry.
Petroleum revenue receipts will continue to be disclosed through the National Assembly, while the government will continue to pursue greater local content opportunities for Guyanese workers and businesses.
President Ali also used his recent press conference to highlight the growing benefits accruing to Guyana under the existing 2016 Production Sharing Agreement, noting that the production-sharing formula remains unchanged.
Under the arrangement, royalty is paid first, while up to 75% of production can be allocated to cost recovery. The remaining profit oil is divided equally between Guyana and the Stabroek Block co-venturers.
President Ali said Guyana’s share has increased from 12.5% to approximately 39.8% as the cost bank was recovered about two years earlier than initially anticipated.
He explained that whereas as many as 75 barrels out of every 100 could previously have gone toward cost recovery, approximately 20 barrels out of every 100 are now being allocated to costs.
This means a significantly larger portion of production is now available as profit oil, with Guyana receiving approximately 39.8 barrels out of every 100 barrels produced.
The president said the declining cost-recovery burden means a substantially greater share of the country’s petroleum production is translating into revenues for Guyana.
The Stabroek Block is operated by ExxonMobil Guyana Limited, which holds a 45% interest. Chevron holds a 30% stake, while CNOOC Petroleum Guyana Limited holds the remaining 25%.
In March, President Ali announced that Guyana’s newest floating production vessel would be named “Essequibo 1899,” paying tribute to a defining moment in the nation’s history.
“I’ve chosen a name for our next FPSO, and it’s called Essequibo 1899 to refresh our memories of history,” President Ali said at the time.
The name references the 1899 Arbitral Award, which established the boundary between then-British Guiana and Venezuela.