Exxon Prosperity FPSO 3 for Payara

by Paul Anderson|Rigzone Staff|, April 05, 2022

The project financing for a total of $1.05 billion was secured in June last year by a consortium of 11 international banks.

After completion in 2024, the Prosperity FPSO will join SBM-constructed FPSOs, Liza Destiny and Liza Unity, in Guyana. Liza Destiny FPSO began production in December 2019, while Liza Unity, the first unit with a design based on SBM Offshore’s Fast4Ward program, started producing in February.

Both units are producing oil at the Liza field in the Stabroek Block. Prosperity FPSO will be deployed at the Payara field, the third project in the Stabroek Block 200 kilometres offshore. It is expected to produce approximately 220,000 barrels of oil per day.The Payara project will target an estimated resource base of about 600 million oil-equivalent barrels.

The current resource offshore Guyana has the potential to support up to 10 projects. ExxonMobil anticipates that four FPSOs with a capacity of over 800,000 barrels per day will be in operation on the Stabroek Block by year-end 2025.

In November last year, ExxonMobil awarded contracts to SBM Offshore to perform Front End Engineering and Design (FEED) for a Floating Production, Storage, and Offloading vessel (FPSO) for the Yellowtail development project.

The FEED contract award triggers the initial release of funds by ExxonMobil’s subsidiary Esso Exploration and Production Guyana Limited (EEPGL) to begin FEED activities and secure a Fast4Ward hull.

Following FEED and subject to government approvals in Guyana of the development plan, project sanction including the final investment decision by ExxonMobil and EEPGL’s release of the second phase of work, SBM Offshore will construct, install and then lease the FPSO and operate it for a period of up to 2 years. First oil is expected in 2025.

In the past l days, Guyana has approved development, Yellowtail has been sanctioned, and SBM has confirmed the award for construction of the One Guyana FPSO for the project.

ExxonMobil’s subsidiary Esso Exploration and Production Guyana Limited is the operator and holds 45 percent interest in the Stabroek Block. Hess Guyana Exploration holds 30 percent interest and CNOOC Petroleum Guyana Limited, a wholly-owned subsidiary of CNOOC Limited, holds 25 percent interest.

andreson.n.paul@gmail.com

 

First Government lifting of Liza Unity oil

The Government of Guyana has received its first entitlement lift of the Unit Gold crude from the Liza Unity Floating Production Storage and Offloading (FPSO) production platform.

The Guyana Ministry of Natural Resources said that the usual lifting entitlement amount of one million barrels of oil will be loaded onto the vessel MV Dimitros by the terminal operator.

The first cargo of Guyana’s lifting entitlement was sold to ExxonMobil Sales and Supply LLC following a competitive bidding process by the five companies, inclusive of the covertures of the Stabroek Block.

According to the Ministry, the ExxonMobil affiliate bid was the best on the pricing differential for the crude and this lift will incur no marketing fee by the lifter. This lift is a one-off arrangement for the company.

The Government of Guyana will be working to ensure that Guyana receives the best price for each cargo from both the Liza and Unity Gold crudes. The forecasted price for this first lift of the Unit Gold crude for Guyana is $106 per barrel.

ExxonMobil’s FPSO Liza Destiny was the first such unit to operate in Guyanese waters. It began production in December 2019. On the other hand, Liza Unity – Exxon’s second FPSO – started production in February 2022. Both units are producing oil at the Liza field in the Stabroek Block.

Exxon’s third FPSO set to work offshore Guyana, named the Prosperity, will be deployed at the Payara field, the third project in the same block, and is expected to produce approximately 220,000 barrels of oil per day.

The current resource offshore Guyana has the potential to support up to 10 projects. ExxonMobil anticipates that four FPSOs with a capacity of more than 800,000 barrels per day will be in operation on the Stabroek Block by year-end 2025.

Less than a month ago, ExxonMobil sanctioned its fourth and largest to date oil development on the Stabroek Block named Yellowtail. It will be developed with the largest FPSO vessel on the block so far. The project is expected to produce approximately 250,000 gross barrels of oil per day starting in 2025 using the One Guyana FPSO.

Exxon Sanctions Yellowtail Development

Bojan Lepic|Rigzone Staff| April 05, 2022

U.S. supermajor ExxonMobil made a final investment decision for the Yellowtail development offshore after receiving government and regulatory approvals. This will be the company’s fourth and largest project in the Stabroek Block. It is expected to produce approximately 250,000 barrels of oil per day starting in 2025. Liam Mallon, president of ExxonMobil Upstream Company, said,

“Yellowtail’s development further demonstrates the successful partnership between ExxonMobil and Guyana and helps provide the world with another reliable source of energy to meet future demand and ensure a secure energy transition. We are working to maximize benefits for the people of Guyana and increase global supplies through safe and responsible development on an accelerated schedule,”

Yellowtail production from the One Guyana floating production storage and offloading (FPSO) vessel will develop an estimated resource of more than 900 million barrels of oil. The $10 billion project will include six drill centers and up to 26 production and 25 injection wells – up to 67 development wells in total.

ExxonMobil’s ongoing offshore exploration discovered a recoverable resource of over 10 billion oil-equivalent barrels. The company anticipates up to 10 projects on the Stabroek Block to develop this resource.

Development of projects and continued exploration success offshore are enabling the steady advancement of capabilities and enhanced economic growth. Over 3,500 Guyanese support ExxonMobil activities in Guyana, an increase of over 50 percent since 2019.

The company and direct contractors spent over $600 million with overn 880 local suppliers since 2015. Over 3,000 Guyanese companies are registered with the Centre for Local Business Development, founded by ExxonMobil and its co-venturers in 2017 to build local business capacity and support global competitiveness.

Partner Hess said that its net share of development costs, excluding pre-sanction costs and FPSO purchase cost, is forecast to be approximately $2.3 billion, of which approximately $210 million is expected in 2022, $430 million in 2023, $585 million in 2024, $390 million in 2025, and $295 million in 2026.

“We are excited to sanction our fourth oil development and the largest FPSO to date on the Stabroek Block. We look forward to continuing to work with the Government of Guyana and our partners to realize the remarkable potential of this world-class resource for the benefit of all stakeholders. The world will need these low-cost oil resources to meet future energy demand and help ensure an affordable, just, and secure energy transition.”

Exxon said in February that it started production from the second offshore oil development on the Stabroek Block – Liza Phase 2 – bringing total production capacity to over 340,000 barrels per day in only seven years since the country’s first discovery.

Currently, the company is producing oil via the FPSO Liza Unity which produced first oil on February 11, 2022, and the Liza Destiny FPSO which started production in December 2019.

Payara, the third project in Stabroek Block, is expected to produce approximately 220,000 barrels of oil per day from the Prosperity FPSO vessel, currently under construction. Prosperity FPSO hit a new milestone as it left dry dock in Singapore. The second Fast4Ward FPSO built by SBM Offshore moved to the quayside in February for the topside integration phase.

ExxonMobil affiliate Esso Exploration and Production Guyana Limited is the operator and holds 45 percent interest in the Stabroek Block. Hess holds 30 percent while CNOOC holds the remaining 25 percent interest.

bojan.lepic@rigzone.com

 

 

Stabroek Block

The Liza Phase 1 development, utilizing the Liza Destiny FPSO, began production in December 2019; its production capacity is expected to rise to over 140,000 gross barrels of oil per day following production optimization work currently under way.

The Liza Phase 2 development, utilizing the Liza Unity FPSO, began production in February 2022 and is expected to reach its production capacity of 220,000 gross barrels of oil per day later this year as operations are safely brought online.

The third development on the block at Payara is on track for production startup in 2024, utilizing the Prosperity FPSO with a production capacity of approximately 220,000 gross barrels of oil per day.

At least six FPSOs with a production capacity exceeding 1 million gross barrels of oil per day are expected to be online on the Stabroek Block in 2027, with the potential for up to 10 FPSOs to develop gross discovered recoverable resources of over 10 billion barrels of oil equivalent.

The Stabroek Block is 6.6 million acres. ExxonMobil affiliate Esso Exploration and Production Guyana is operator and holds 45% interest. Hess Guyana Exploration holds 30% interest and CNOOC Petroleum Guyana holds 25% interest.

Source: Hess

 

 

Hunting to support Yellowtail

Isabelle Keltie, Oilfield Technology, 12 April 2022

Hunting PLC, the international energy services group, has been contracted to provide titanium stress joints for the Yellowtail development project in the Stabroek Block. Hunting’s Direct Pull-Through installation methodology is intended to simplify installation and enhance safety during project execution.

Dane Tipton, President of Hunting’s Subsea Technologies Division said: “Hunting is extremely excited for the opportunity to use our worldwide, field-proven technologies to help ExxonMobil reduce costs and increase safety for this project.”

Hunting PLC is a UK-based, upstream energy services public company listed on the London Stock Exchange. A broad range of products and associated services spans the lifecycle of the wellbore for oil, gas, onshore or offshore, conventional or unconventional.

Hunting has expanded from shipping, to refining, trading, aviation, engineering, aerial surveys, geophysics and supplier to the petroleum industry since the 19th Century.

 

 

SBM Scores FPSO Award for Fourth Project

 April 05, 2022

Following a final investment decision for the Yellowtail project, ExxonMobil and SBM Offshore signed a deal for the supply of an FPSO for the project, SBM’s largest so far. Exxon announced the final investment decision for the Yellowtail development , soon after receiving government and regulatory approvals.

Yellowtail will be the company’s fourth, and largest, project in the Stabroek Block. It is expected to produce approximately 250,000 barrels of oil per day from 2025.

Production from the FPSO vessel – to be named One Guyana – will develop an estimated resource exceeding 900 million barrels of oil. The USD10 billion project will include six drill centers with up to 67 development wells.

SBM Offshore said that Exxon’s affiliate, Esso Exploration and Production Guyana Limited, confirmed the award of contracts for the Yellowtail development project located in the Stabroek Block i.

Under these contracts, SBM Offshore will construct, install, lease and operate the One Guyana FPSO for a period of up to two years, after which the FPSO ownership and operation will transfer to the Exxon affiliate.

The award follows the completion of front-end engineering and design studies, receipt of requisite government approvals and the final investment decision on the project by ExxonMobil and block co-venturers.

The One Guyana FPSO design is based on SBM Offshore’s Fast4Ward program that incorporates the company’s new build, multi-purpose floater hull combined with several standardized topsides modules.

The FPSO will be designed to produce 250,000 barrels of oil per day, will have an associated gas treatment capacity of 450 million cubic feet per day, and a water injection capacity of 300,000 barrels per day. The FPSO will be spread moored in a water depth of about 5,900 feet and will be able to store around 2 million barrels of crude oil.

SBM Offshore would be continuing its work with local companies and will be further recruiting and employing Guyanese engineers on the One Guyana project team.

The turnkey phase of the project is executed by a special purpose company established by SBM Offshore and McDermott. SBM Offshore holds 70 percent and McDermott holds 30 percent equity ownership in this company. The FPSO will be fully owned by SBM Offshore.

ExxonMobil’s ongoing offshore exploration has so far discovered a recoverable resource exceeding 10 billion oil-equivalent barrels. The company anticipates up to 10 projects on the Stabroek Block to develop this resource.

Currently, Exxon is producing oil via the FPSO Liza Unity which delivered first oil on February 11, 2022, and the Liza Destiny FPSO which started production in December 2019.

 

 

Yellowtail Petroleum Production License (PPL)

Apr 02, 2022

The Government of Guyana and Esso Exploration and Production Guyana Limited (EEPGL) signed the Petroleum Production License (PPL) for ExxonMobil’s fourth project Yellowtail. The cost of US$10 Billion is recoverable by ExxonMobil’s subsidiary EEPGL.

Prior to the approval, Natural Resources Minister, Vickram Bharrat disclosed that the Government contracted Bayphase Oil and Gas Consultants and the Redford Group headed by Ms. Alison Redford and a team of technical experts to review the Yellowtail Development Plan in keeping with internationally recognised standards within the oil and gas industry. The project is expected to produce up to 250,000 barrels of oil per day after startup in late 2025, using the ‘One Guyana’ FPSO vessel. The US$10 billion development project, which will target an estimated resource base of about 900 million oil-equivalent barrels, is now the largest single investment in the history of Guyana.

The team of technical experts assessed the project to ensure compliance with all relevant regulations and that they can be enforced. This included environmental standards and reservoir management for the sustainable and responsible operation of the project, in conformity with the best international standards and environmental safeguards associated with a project of such magnitude.

The government and its regulatory agencies are satisfied with all the reviews and long hours invested by both local and international experts to finally have a licensing agreement for the Yellowtail Project, which will benefit all Guyanese, thereby realizing the ‘One Guyana’ vision. This project will build on the recently sanctioned local content legislation for each stage of the project as it relates to workforce development, supplier development, and overall strategic investment. The Government remains committed to managing and extracting Guyana’s oil and gas resources sustainably in keeping with internationally recognized acceptable environmental standards and transparency.

 

 

Green light for fourth ExxonMobil project

Apr 02, 2022

The Environmental Protection Agency (EPA) announced that it approved the Environmental Authorization for the US$10 Billion Yellowtail Development Project. The Environmental Permit was granted for a period of five years to ExxonMobil subsidiary and operator of the Stabroek Block, Esso Exploration and Production Guyana Limited (EEPGL) to undertake the requisite construction and operation of production facilities.

The approval comes after the EPA considered public inputs during all statutory periods for public consultations and review. The EPA took into consideration, the technical review and recommendations from a team of Independent International Experts, and the Environmental Assessment Board (EAB).

The permit contains several key provisions regarding flaring, oil spill response and financial assurance and monitoring. It includes a new provision on receipt of grievances.

The Permit strictly prohibits routine flaring and venting and specifies that it is only permissible during commissioning, start-up and special circumstances. The Permit goes further to maintain payments in instances where flaring is conducted beyond permitted durations. EEPGL would have to pay US$45 per tonne of carbon dioxide equivalent, which it is permitted to flare.

The permit requires EEPGL to procure a Capping Stack to be maintained, tested, and stored in Guyana. A capping stack is a large well closure device that connects to the top of the blowout preventer (BOP) and is capable of sealing off a well. It is a modern technology available post the Macando incident, to cap a well in event of a loss of well control and failure of the BOP. , EEPGL must maintain access to at least one (1) overseas subscription service, to allow mobilization of a Capping Stack to the project location. This serves to fortify safety and emergency response efforts since wells would be swiftly capped in the event of a well blow-out.

The Permit ensures that EEPGL is held liable for all costs associated with clean up, restoration and compensation for any pollution damage, which may occur as a consequence of the project. EEPGL is required to have financial assurance which includes a combination of Insurance which must “cover well control, and/or clean up and third-party liability on terms that are market standard for the type of coverage.”

It requires a Parent Company/Affiliate Guarantee Agreement which indemnifies and keeps indemnified the EPA and the Government of Guyana in the event EEPGL and its Co-Venturers fail to meet their environmental obligations under the Permit. The financial assurance provided “must be guided by an estimate of the sum of the reasonably credible costs, expenses, and liabilities that may arise from any breaches of this permit. “Liabilities are considered to include costs associated with responding to an incident, clean-up and remediation and monitoring.

To ensure EEPGL meets its obligations to prevent and mitigate environmental harm, the Permit imposes comprehensive requirements for monitoring and management of any impacts affecting biological, physical, and socio-economic resources within the Area of Influence of the project, including targeted and updated environmental baseline studies. The permit requires EEPGL to submit safety case information, including a risk assessment prior to drilling and development of wells.

EEPGL is also enjoined to establish and maintain a Grievance Mechanism in keeping with the World Bank’s Approach to Grievance Redress in projects, to ensure that complaints from individuals and communities affected by the project are received and addressed. There is a requirement for reporting same and what actions were taken to address the grievances to the EPA.

The full text of the Yellowtail Permit is available for download on the EPA’s   website   at  www.epaguyana.org.

 

US$2 Billion Exxon guarantee to cover oil spill costs

Apr 10, 2022 ExxonMobil Corporation presented the Environmental Protection Agency (EPA) with a proposal for a US$2 Billion guarantee to cover any oil spill costs not satisfied by its subsidiary and Operator of the Stabroek Block, Esso Exploration and Production Guyana Limited (EEPGL).

EPA Head, Kemraj Parsram told media that EPA rejected this offer until ExxonMobil can justify how it arrived at the US$2 Billion guarantee for a worst case scenario offshore Guyana. He was accompanied by the Head of the EPA’s Oil and Gas Department, J.Gravesande and the Legal Officer, Frances Carryl. Diiscussion focused on key provisions in the Environmental Permit for the project, the insurance arrangements in place for an unmitigated oil spill in the Stabroek Block and other mechanisms in place to ensure protection from pollution by EEPGL..

In terms of the liability for environmental damage as a consequence of the activities offshore,the Environmental Protection Act has the benefit of being general enough to ensure liabilities are covered. One key provision in Section 13 of the Act makes it clear that permit holders have a responsibility to restore and rehabilitate the environment- regardless of what occurs, EEPGL would be held responsible for the restoration and rehabilitation of the environment.

EPA staff said there is a strict liability principle to which EEPGL is bound; that means, “We don’t have to go to court to prove anything, we can start to take action against you. Section Four of the Act lists a number of principles which the EPA must utilise in fulfilling its obligations and one of those is the Strict Liability Principle which states that the requirement to prove fault is eradicated so it does not really matter whose fault it is; there is no blame game, the person at whose instance it occurs, being EEPGL in this example, would be held strictly liable. It would be quite difficult for the company to escape liability given the provisions of the permit and the Act.”

In addition to what the law provides, the EPA Head said the Permit itself demands that certain safety mechanisms are in place to prevent the incident of an unmitigated oil spill. These mechanisms include the blowout preventer and the capping stack, a new requirement.

A blowout preventer, or BOP, is a large specialised unit weighing up to 400 tonnes used to prevent an oil spill from occurring. It works like a valve to close an oil well, and is highly effective in ensuring well safety. The BOP can shut in the well in minutes. If activated, it will automatically close hydraulic rams and activate specialised seals against the drill string to seal the bore. If this does not work properly, there are other rams, which can completely cut through the drill string to seal the hole. In all, the BOP has six independent shut-in mechanisms.

A capping stack is a large well closure device that connects to the top of the blowout preventer and is capable of sealing off a well. It is only used in the highly unlikely situation where a loss of well control includes both a surface blowout and failure of the blowout preventer.

Inclusion of the capping stack provision is one of the superior clauses of the Yellowtail Permit. EEPGL has to procure and maintain that equipment in Guyana which, therefore, fortifies the emergency response in the event of an uncontrolled well event. EEPGL has to maintain a subscription service with a provider to have easy access to another. capping stack.

If both shut- in mechanisms fail, and an unmitigated oil spill occurs, there is a robust provision in place for financial assurance. The permit provides for a declaration from EEPGL to give Guyana self insurance. Parsram said, “In a recent release, the company noted that its 2020 financial standing was US$5B to US$7B in assets and its co-venture partners, Hess Corporation and CNOOC would have similar standing too. Another layer is the actual insurance. For every exploration activity EEPGL has to provide an insurance policy and this totals US$600M. So each project such as those 12 wells being pursued for Kaieteur and Canje, each programme is covered by a US$600M insurance policy.”
“In the case of Yellowtail, they have provided to us, a policy that I think is a maximum of an aggregate totalling US$4B. In the construction phase there is Construction All Risks Insurance (CAR) and a Per Occurrence valued at US$750M. So anytime there is an incident and there is loss or damage to equipment they can claim this.”

“…Then there is a key insurance factor that deals with the oil spill aspect and this is referred to as third party liability and operator extra expenses. Third party liability is at US$100M and this covers compensation for any affected parties, any legal fees … Operator extra expenses come into play with having well control to the tune of US$500M. So a total of US$600Mis in the Yellowtail Permit and it is similar to Liza One, and Liza Two.”

If for any reason EEPGL or its co-venturers default or are unable to satisfy the full pollution cost, the EPA wants Exxon to step up and provide coverage hence it is seeking a guarantee from the parent company ExxonMobil, that fully indemnifies the Government.

The parent company proposed US$2 Billion to cover what cannot be handled by EEPGL in the event of an oil spill but the EPA is questioning if this is enough. Exxon has been asked to explain how it arrived at the proposed sum.

“We are asking them for the reasonably credible cost of a worst case scenario spill in terms of clean up, remediation and monitoring and that will inform us on what is really a reasonable figure on what is to be accepted as a guarantee. So we want them to do that and then get back to us. So we have a draft document on this from them. We, as the regulator, are working on them and questioning what makes sense and what doesn’t and laying out what we expect. So to address rumours or speculations that they are in breach of their permit, no, they are not, they have provided it but we have to sign off accepting it.. we are holding off until we are comfortable and have certain measures in place…I am not saying the US$2 Billion would not be accepted but you cannot come up with a figure out of the air, you have to show me how you arrived at that figure…”

In conclusion on this matter, EPA said, unlike the other permits, Yellowtail requires full indemnification. “So irrespective of what occurs, EEPGL must meet the environmental obligations and Guyana would not be left with the bills in its hands.”

 

 

 

Exxon return to Canje and Kaieteur blocks

7 April 2022

Fabio Palmigiani in Rio de Janeiro

US supermajor plans to drill fresh exploration wells at both permits later this year

Massive Exxon investments

April 6th 2022

Exxon, Hess Corp. and CNOOC Ltd Consortium started production in Guyana in 2019. They have discovered more than 10 billion barrels of recoverable oil.

Exxon Mobil, Hess Corp and CNOOC Consortium is investing heavily offshore Guyana, expecting future production of some 1,2 million barrels per day of oil and gas by 2027. The fourth oil project production will receive an investment of US$ 10 billion.

The Consortium started production in 2019 and is responsible for all output in the country. They discovered overn 10 billion barrels of recoverable oil.
The Yellowtail development is expected to produce about 250,000 barrels of oil per day starting in 2025. The USD10 billion project is one of ten that companies plan to install.

Exxon’s fourth project at Yellowtail will “provide the world with another reliable source of energy to meet future demand and ensure a secure energy transition,” said Liam Mallon, president of Exxon’s upstream company.

The final investment decision was made after receiving government and regulatory approvals. Exxon named the offshore production unit for Yellowtail ”One Guyana.”

The project will include six drill centers and up to 26 production and 25 injection wells, .

The three companies produced 120,000 boed in Guyana in 2021. Exxon is the leading operator with a 45% stake. Partners Hess and CNOOC keep 30% and 25% of the output, respectively.

 

 

EEPGL – AG legally tasked to defend public rights

Apr 02, 2022

Esso Exploration and Production Guyana Limited filed a response in the Court contending that Kaieteur News Publisher overstepped his boundaries “as a private citizen,” in his effort to legally challenge the Government to ensure that the oil companies pay their fair share of taxes.

The oil company has instead charged the Attorney-General (AG) with the responsibility for filing a civil action in the interest of the public.

In the affidavit in defence signed by President of ExxonMobil Guyana, Alistair Routledge, the company which was recently added as a respondent in the case between Lall and the government outlines “as reasons,” why the publisher is without jurisdiction to bring such a case against the government.
Lall is challenging the government over discriminatory tax provisions granted in the Stabroek Block Production Sharing Agreement (PSA) for the oil companies.

The PSA between the oil giant, its partners and the Government states, “…no tax, value-added tax, excise tax, duty, fee, charge or other impost shall be levied on the Contractor or Affiliated Companies, in respect of income derived from Petroleum Operations with the Stabroek Block.”

The Stabroek Block is currently being drilled by Exxon’s subsidiary EEPGL, Hess Corporation and CNOOC Petroleum Guyana Limited.

In January, the publisher, seeking declarations to have the provisions nullified and reversed, through his attorney, M. Ali, filed an action in the High Court which claimed that “the tax reliefs listed under Article 15.1 of the Petroleum Agreement, dated June 27, 2016, between the Guyana Government and the oil companies, violate the Petroleum Exploration and Production Act, the Financial Administration (and Audit) Act, the Prevention of Discrimination Act, and the Constitution.”

EEPGL, the Exxon operator is strongly opposing the application. In the document filed to oppose case, the company claimed it has no knowledge of the allegations contained in the application. EEPGL said that the fact that “the publisher of the National Media and Publishing Company Limited (Kaieteur News), is a citizen of Guyana does not entitle him to bring the present proceeding in his own name, in his private capacity for declaratory relief alleging breach of public rights.”

“…Nor has the applicant shown any special loss or damage he would suffer over and above the public so as to entitle him to seek the reliefs that he does,” EEPGL added in the affidavit.

The oil company explained that based on the advice of its attorneys, a private person is not entitled to seek the declaratory reliefs in order to prevent what are alleged public wrongs or to assert a right on behalf of the public in proceedings, which are not for judicial review, and are brought in the regular jurisdiction of the court.
EEPGL argues further that it is a fundamental principle of Guyana law that public rights could only be asserted in a civil action by the Attorney-General of Guyana representing the public.

“Except where a statute otherwise provides, a private person could only bring a proceeding to challenge a breach of the law if his claim was based on an allegation that the breach constituted an infringement of his private rights or would inflict special damage on him. A private person was not entitled to bring an action in his own name for the purpose of preventing public wrongs. Consequently, the court has no jurisdiction to grant relief in such a proceeding as the present one and the proceeding brought by the applicant ought to be struck out forthwith.”

Additionally, the company claimed that the Petroleum Agreement (PA) that it has with the Government does not violate provisions of the Petroleum Act (PA), the Financial Administration and Audit Act,    Prevention of Discrimination Act or the Constitution of Guyana.

The added respondent (EEPGL) specifically denies that PA does not extend or purport to extend concessions to persons in a manner that is inconsistent with sections 10 and 51 of the Petroleum Act, either as the applicant alleges or at all.

“The PA does not separately or cumulatively alter certain tax laws to grant remissions, concessions and waivers contrary to section 6 of the FAA Act…”

Further, the added respondent is of the view that the provisions of the PA do not and cannot alter a law.

“Only Parliament may do so by way of legislative device, which is recognised and given effect to by Article 15.14 of the PA…”

(Guyana is extremely fortunate to receive high-value investment in energy, and should not look a gift horse in the mouth from the generous and professional petroleum industry, a key driver of world economic growth. Oil revenues are heaping colossal benefits on the country, abounding in natural resources, wrongly described as impoversihed. A vast mineral heritage includes bauxite, gold, diamonds. semi-precious stones, kaolin, silica sand, soapstone, kyanite, feldspar, mica, ilmenite, laterite, graphite, manganese, radioactive minerals, copper, molybdenum, tungsten, iron, and nickel. Biological resources include timber, rice, vegetables, fruit, nuts, sugar, rum and fish which are vital exports.)

 

 

Oil- water nexus

March 30, 2022

Oil revenues will be used to strengthen the water system, as the administration takes an aggressive approach to addressing the challenge. During a national consultation on strategic flood protection measures, Vice President, Dr. Bharrat Jagdeo said the situation will deteriorate since the country is evolving. He emphasised an urgent need to implement strategic plans to resolve the issue.

“There is a strong need to do so urgently, the cost of doing so is enormous to fix our sea defence to keep the sea out and these water management systems require heavy investment, part of the oil resources have to be spent in this manner.”

The forum allowed regional officials and farmers across Regions Two, Three, Five and Six, to propose and discuss measures to properly manage the water systems.   The aim is to collectively develop a long-term maintenance plan for the drainage and irrigation network, increase agriculture production and maximise land use.

80 percent of the world lacks access to fresh water and while Guyana has the resource in abundance, the land is still below sea level. In some residential and farming communities there are volumes of water, but the infrastructure is not designed to handle the pressure, thus creating a distressing outcome for citizens, affecting living conditions.

“We have to fend for ourselves, while we remain engaged with the global process, . we are not sitting on our hands, we would have to ensure that some of our resources are utilised in this manner. If we don’t tackle the big issues of water management every single crop or every two crops [will be lost.] We have lost large volumes of our produce and that has not only impacted the overall economy, but at the family level often it has devastating consequences for the people.”

Chairman of the National Drainage and Irrigation Authority (NDIA), Lionel Wordsworth presented major drainage plans for the respective regions with proposals to drain and upgrade canals in the Pomeroon, Region Two, Canals Polder, Region Three, the Mahaica/Mahaicony/Abary area, Region Five and areas in Region Six.

The Vice President noted that the consultation will allow the government to make thorough assessments and subsequently put robust systems in place to protect the country. Though recommendations were given by the stakeholders, technical officers are expected to visit the regions to continue examining proposals and drainage issues that can be addressed in the short-term.

 

 

CGX

Mar 30, 2022

Canadian explorer CGX Resources Inc. recently advised the Environmental Protection Agency (EPA) that it proposes to drill the Wei-1 exploration well in the Northern portion of its Corentyne Block in the May to August 2022 period. Wei-1  estimated cost of US$93,000,000 would be recoverable should CGX move to production on the heels of a commercial discovery.

The site of the proposed Wei-1 well is approximately 200km offfshore in a north easterly direction in the Atlantic Ocean. The area is bordered by the Stabroek and Kanuku Blocks on the north and west, respectively and Suriname on the east.

Wei-1 well will be drilled as a vertical well utilising a semi-submersible rig. CGX secured an option to use semi-submersible rig Maersk Discoverer, a mobile offshore drilling unit (MODU) from Maersk Drilling. The Maersk Discoverer was selected because of its potential to drill Wei-1 effectively and safely. The rig is designed to sustain extreme environmental conditions and is certified for offshore operations. It is fully equipped to handle all the drilling operations as its blowout preventer (BOP) and well control systems exceed all well control requirements.

CGX told the EPA that the project will involve onshore facilities and marine/aviation services in Guyana to support the exploration, drilling and decommissioning activities. Laydown areas, pipe yards, warehouses, fuel supply, heliport, and waste management facilities are planned to be part of the support. The company will consider Trinidad and Tobago for back-up service activities not available in Guyana.

CGX is discussing standard offshore Rig support logistics, PSV mooring and other Shore based services in Georgetown with G-Port Inc. The company is in talks with Tiger Rentals Guyana for non-hazardous and hazardous waste management disposal services and PSV mud tank cleaning services at the GYSBI Inc. location at Houston, Guyana.

A “Cradle to Grave Waste Analysis” is being prepared for the project and will include waste profile generation, transportation, treatment, storage and disposal process stream diagrams, associated volumes, related safety data sheets (sds), and other applicable waste profile details.

There are challenges facing the country regarding waste management and therefore it is committed to delivering the most practical solutions with the most up to date available technologies. and to ensuring the minimisation of the amount or hazardous nature of waste entering the waste streams.

The prospect Wei is named after the tallest and hottest mountain close to the villages of Paramakatoi and Kurububaru in the Pakaraimas. Wei mountain has commanding visibility over all the surrounding terrain, so it was used as a sentinel post by the Patamona people to guard against attacks.

Wei-1 is the second prospect following Kawa, currently being drilled that has been identified in the Northern Corentyne area for exploration drilling.

CGX is an oil and gas exploration company headquartered in Toronto, Canada and was incorporated in 1998 for the primary purpose of exploring for hydrocarbons in Guyana.. In partnership with Frontera Energy Corporation, CGX holds an interest in three Petroleum Agreements (PA) known as the Corentyne, Berbice and Demerara Blocks, covering approximately 11,005.2 km2 (approximately 9,748.2 net km2) offshore and onshore Guyana.

The original Corentyne PA covered approximately 11,683 km2 under two separate Petroleum Prospecting Licences (PPL). The Annex PPL (4,047 km2) was held 100 percent, as was the offshore portion of the Corentyne PPL (6,070 km2), while the onshore portion of the Corentyne PPL (1,566 km2) was held net 62 percent by CGX through ON Energy, its subsidiary.

The original Corentyne PA was awarded to CGX in 1998, following which the company began an active exploration programme consisting of a 1,800 kilometre seismic acquisition and preparations to drill the Eagle well. The Eagle drilling location in 2000 was 15 kilometres within the Guyana-Suriname border. However, a border dispute between Guyana and Suriname led to the company being forced off the Eagle location before drilling could begin. All active offshore exploration in Guyana was suspended by CGX and other operators in the area, including Exxon and Maxus (Repsol, YPF).

On September 17, 2007, the International Tribunal on the Law of the Sea (“ITLOS”) awarded a maritime boundary between Guyana and Suriname. ITLOS determined that it had the jurisdiction to decide on the merits of the dispute and that the line adopted by ITLOS to delimit the parties’ continental shelf and exclusive economic zone follows an unadjusted equidistance line. The arbitration was compulsory and binding. CGX had financed a significant portion of Guyana’s legal expenses at a cost of US$9.8 million. The decision was beneficial for CGX, as it concluded that 93 percent of CGX’s Corentyne PPL and 100 percent of the Georgetown PPL would be in the Guyana territory.

Because CGX was prevented from gaining unhindered access to a portion of the original Corentyne PPL area during the seven-year resolution, the term of the contract was extended to June 2013. In 2008, CGX was the first company to acquire 3D seismic in Guyana when it acquired a 505 square kilometre 3D seismic programme to enhance its interpretation of its newly defined Eagle Deep prospect, a large Cretaceous stratigraphic trap . The cost of the seismic programme was approximately $8 million. Processing and interpretation of the 3D seismic was completed in 2009.

Based on the interpretation of the 3D seismic volume and concurrent activities on both sides of the Atlantic margin, CGX interpreted numerous prospects on the Corentyne PPL. One significant prospect was a Turonian sand at approximately 5,600 metres. Because the offset Jaguar-1 well on the Georgetown PPL was testing another Cretaceous Turonian prospect, the Corentyne commitment well was targeted to 4,250 metres to test the Tertiary Eocene and Cretaceous Maastrichtian trend.

The Eagle-1 well spudded on February 13, 2012 and was initially budgeted for 60 days of drilling, but experienced weather delays and mechanical issues which extended operations to 107 days. The initial cost estimate for the Eagle-1 well was US$55 million. However, due to additional time for drilling and additional logging of potential reservoir sands, the final costs associated with the Eagle-1 well were approximately US$89.4 million.

In May 2012, the company completed the analyses of the results of its Eagle-1 well on its 100 percent owned and operated Corentyne PPL, offshore Guyana. The well was declared a dry-hole after encountering hydrocarbon shows in three formations, but the potential reservoir sands proved to be water-bearing. The company recognised the total cost of Eagle-1 well as a dry hole expense in the financial statements for the years ended December 31, 2013 and 2012.

As of March 19, 2013 and effective December 31, 2012, an Independent Resources Evaluation was completed by DeGolyer and MacNaughton of, USA. In the D&M Report, the total best estimate (P50) of Prospective Resources for six oil and gas prospects within the Corentyne PA are 779 MMbbl of oil, 743 MMbbl of condensate, 6,943 Bcf of sales gas plus 696 billion cubic feet of solution gas.

The D&M Report was filed on the website at www.cgxenergy.com. The D&M Report was prepared in accordance with the requirements of Section 5.9 of National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities.

On November 27, 2012, the Company received a new Corentyne PA, offshore Guyana, renewable after four years for up to six additional years. That New Corentyne PA applied to the former offshore portion of the Corentyne PPL, covering 6,212 km2.

On December 15, 2017, the Company was issued an addendum to the November 27, 2012 PA. Under the terms of the addendum to the new Corentyne PA beginning November 27, 2017, during phase two of the first renewal period the Company has an obligation to drill one well.
That well was drilled last year August with Kawa-1. Additionally, the addendum to the New Corentyne PA resulted in a reduction of acreage to 4,709 km2.

 

 

IDB

April 5, 2022

Dr. Ashni Singh and officials from the Ministry of Finance met Chief Executive Officer (CEO) of IDB (Inter-American Development Bank) Invest, James Scriven and team to examine private sector opportunities in Guyana that the Bank can support. Later, the Finance Minister hosted a Roundtable meeting with Representatives of the Private Sector and Mr. Scriven and team to discuss Guyana’s Development Agenda.

IDB Invest is the private sector arm of the IDB. Its aim is to advance economic development and improve lives by encouraging growth of the private sector. Minister Singh was joined by Minister of Public Works, Bishop Juan Edghill and Minister of Housing and Water, Collin Croal while the Private sector team was led by Chairman of the Private Sector Commission, Paul Cheong.

The Government has been working since entering office in August 2020 to create the conditions for private sector-led growth with policies designed to create jobs and allow for income-generation. The meeting focused on the wide range of private sector opportunities for possible investment by the Bank such as an expansion of trade financing with Commercial Banks and providing support to micro enterprises.

Additionally, discussions centred on sectors poised for rapid expansion including oil and gas, agriculture and agro-processing, tourism and Information Communications Technology (ICT) such as the Business Process Outsourcing (BPO) sector. It also allowed for an examination of available financing instruments, mechanisms and modalities of accessing this financing and examples of how these mechanisms have worked in other countries. IDB- Invest offers an array of investment opportunities and provides its clients with customized financing solutions and expert advice, tailored to their specific industry and market.

The IDB-Invest was formerly known as the Inter-American Investment Corporation (IIC). It partners with the private sector in Latin America and the Caribbean to finance projects to advance clean energy, modernize agriculture, strengthen transportation systems and expand access to financing. Financial solutions offered by IDB Invest include trade and supply chain finance, blended finance, guarantees, equity and loans.

During the 2022 annual meeting of the Boards of Governors of the IDB and IDB Invest, held virtually, Minister Singh lauded the commitment of the IDB Group to the continued support to the Caribbean sub-region. The Minister spoke on behalf of the Bahamas, Barbados, Guyana, Jamaica and Trinidad and Tobago, the smallest member countries of the IDB Group.

Last week, the Minister hosted a similar roundtable discussion between the World Bank and the private sector led by Country Director for the Caribbean Lilia Burunciuc and new Resident Representative of the Bank Dilletta Doretti. That meeting served as an opportunity for dialogue on the Government’s economic objectives and priorities and potential opportunities for World Bank support through its assistance and lending programmes.