Guyana’s government authorized ExxonMobil on April 6, 2022, to proceed with development of its fourth offshore oil and gas field in the Stabroek Block, designated the Yellowtail Project. The $10 billion initiative is designed to achieve production capacity of up to 250,000 barrels per day, with ExxonMobil targeting first oil by 2025. The approval expands the US supermajor’s existing portfolio in Guyana, which already includes the Liza One, Liza Two, and Payara fields.
Since December 2019, when the country pumped its first barrel of oil offshore, Guyana has emerged as one of the world’s newest petroleum producers. The nation, home to approximately 800,000 people, has seen its oil sector grow rapidly following nearly two dozen successful wells drilled by ExxonMobil since 2015, giving the company access to over 10 billion barrels of oil in the Guyana Basin.
ExxonMobil has made a final investment decision on the Yellowtail Project, stating it will help supply the world with additional reliable energy to meet future demand and support a secure energy transition. The company is already preparing documentation for a potential fifth oil field, which could be submitted by the final quarter of 2022. The project’s approval occurs amid ongoing discussions between ExxonMobil and environmental and rights organizations regarding financial protections against potential oil spills. Vincent Adams, former head of Guyana’s environmental agency, has raised concerns about ensuring adequate insurance coverage.
Adams noted that during his tenure, the environmental agency had agreed with ExxonMobil to maintain at least $2.5 billion in oil spill insurance. ExxonMobil has stated it maintains at least $2 billion in readily available funds, plus the financial capacity to address any adverse event.
The company has reiterated its commitment to paying all legitimate costs in the unlikely scenario of an oil spill and says it has robust response plans in place. Adams has emphasized that the company must be required to carry sufficient insurance to protect the environment and neighboring countries. The Stabroek Block’s success has attracted major oil firms to acquire stakes in adjacent blocks or apply for nearby concessions.
Guyana’s government plans to auction remaining blocks by the end of 2022, including unexplored areas and portions returned to the state after failing to yield commercial hydrocarbon quantities. The US Department of State has characterized the Yellowtail development as a significant advancement for Guyana and the region, noting its potential to promote economic growth and energy security.
The US Energy Information Administration has highlighted that developing new oil fields in Guyana and surrounding areas is important for meeting future energy needs and driving economic expansion.
