The integrated energy behemoth ExxonMobil Corp. (XOM) and BHP Billiton (BHP) have agreed to develop the Scarborough gas field using a floating liquefied natural gas vessel (FLNG).
The Scarborough field is located 220 kilometers northwest of Exmouth, offshore Western Australia, within retention lease WA-1-R. ExxonMobil, a 50% joint venture partner in this field with BHP, believed that a FLNG was the best option to develop this field. BHP, on the other hand, preferred using existing subsea pipelines for this purpose. With both the parties now thinking along the same lines, the project execution is expected to be speedier and easy.
The Scarborough field development is anticipated to be a promising commercial project. However, the field is unlikely come online before 2020.
The preliminary FLNG facility is expected to be about 495 meters long and 75 meters wide, with a processing capacity of approximately 6-7 million tons per annum of LNG. The field life is expected to be 25–35 years. Initially, a total of 12 wells, in two phases, are to be drilled as part of the project.
Irving, TX-based Exxon Mobil is the world’s largest publicly traded oil company, engaged in oil and natural gas exploration and production, petroleum products refining and marketing, chemicals manufacture, and other energy-related businesses.
ExxonMobil is fairly active in its investment program. The company plans to spend about $185 billion over the next five years, up 29% from the last five-year period. Notably, its financial position is also strong at present. In terms of market capitalization, Exxon Mobil is much ahead of its peers like Chevron Corporation (CVX) and BP p.l.c. (BP).
However, the company’s decreasing revenues and lower refining margin are matters of concern. Moreover, given its large base, achieving growth in oil and natural gas production has been a challenge for ExxonMobil over the past several years.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment