Two Guyanese companies have been awarded contracts to build handrails for the $6.8 billion Hammerhead Floating Production Storage and Offloading vessel. One of the companies is a subsidiary of a Japanese firm.

Contract Details and Local Response

Asequith Guyana Inc. and Asian Sealand Offshore and Marine Inc. (ASOM) were contracted by Japanese firm MODEC to fabricate structural safety handrails for integration into the FPSO during construction. The components will be exported to Asia for installation on the topsides modules of the Hammerhead FPSO.

MODEC's Position on Local Content

MODEC issued a press release hailing the contracts as demonstrating the "growing capability of Guyana's manufacturing sector to meet global offshore standards." The company described this as a milestone that demonstrates MODEC's sustained commitment to local content.

"By partnering with Guyanese manufacturers, MODEC is helping to build technical capacity, create high-value opportunities for local businesses, and support long-term, diversified economic growth," MODEC stated in the press release. The company characterized the successful delivery by Asequith and ASOM as "a clear example of how collaboration between international operators and local industry can produce high-quality results and solidify Guyana's emergence as a regional hub for energy-related manufacturing and services."

MODEC is described as a leading provider of floating production solutions for the offshore energy sector, including Floating Production Storage and Offloading (FPSO) vessels. The company performs Engineering, Procurement, Construction, and Installation (EPCI) for FPSOs and provides oil and gas companies worldwide with comprehensive, competitive production solutions by owning and operating its FPSOs.

Hammerhead Project Overview

The Government of Guyana approved a Petroleum Production Licence (PPL) for the Hammerhead project in September of the previous year. The project represents ExxonMobil Guyana Limited's seventh development in the Stabroek Block, which is estimated to hold 11.6 billion barrels of oil.

The Stabroek Block is operated by EMGL, which holds a 45% interest. Other block partners include Hess Guyana Exploration Ltd. with 30% interest and CNOOC Petroleum Guyana Limited with 25% interest. The Hammerhead development is located in the south-western portion of the Stabroek Block offshore Guyana and targets the Hammerhead reservoir.

Hammerhead was announced as Exxon's ninth commercial discovery in August 2018. The Hammerhead-1 well was drilled in a new reservoir, encountering approximately 197 feet (60 metres) of high-quality, oil-bearing sandstone reservoir. The well was safely drilled to 13,862 feet (4,225 metres) depth in 3,773 feet (1,150 metres) of water.

Production Specifications and Timeline

Once operational, the Hammerhead FPSO will have the capacity to produce 150,000 barrels of oil per day (BOPD), along with associated gas and water handling. First oil from the Hammerhead project is expected by 2029. A total of 445 million barrels of oil is forecast to be produced with an estimated daily production capacity of 150,000 barrels of oil per day.

The project will use a Very Large Crude Carrier (VLCC) conversion-type Floating Production, Storage, and Offloading (FPSO), which will be built by Japanese shipbuilder MODEC. Hammerhead oil production will be facilitated through 10 production wells and 8 injection wells.

Hammerhead is expected to boost Guyana's overall production capacity to approximately 1.5 million barrels per day, with the Field Development Plan projecting this by the second quarter of 2029. The government stated that the associated gas produced from the Hammerhead Project reservoir will be transferred to the Gas-to-Energy (GtE) pipeline network.

The project is expected to boost energy security, drive industrial growth, and create employment across various sectors, further positioning Guyana as a key player in the global energy landscape.

Broader Development Context

Hammerhead adds to six other sanctioned projects under Exxon's operations: Liza One, Liza Two, Payara, Yellowtail, Uaru, and Whiptail. The first four projects are already in operation, producing an average of 650,000 barrels per day, with an installed capacity of 900,000 barrels per day. Construction is underway for the Uaru and Whiptail projects, with Uaru anticipated to start production in 2026, and Whiptail anticipated for startup in 2027. ExxonMobil has submitted an application for an eighth project called Longtail and has been pushing ahead with developmental plans, although the government has not formally approved it. The oil company is aiming to bring all eight developments into production by the end of the decade, targeting a combined output of 1.7 million barrels per day.

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