Press Release –
Payara offshore development approved with recommendations
The Government of Guyana and ExxonMobil earlier today signed the license for the Payara field offshore development in Guyana. The Payara project approval was a result of several reviews and consultations by local and international experts.
[ For details of Payara licence see link:-
https://dpi.gov.gy/payara-licence-approved/ ]
Prior to the approval, the Government of Guyana had decided to review the work already undertaken by the Department of Energy and Bayphase Oil and Gas Consultants on the Payara Project so that the interest of all Guyanese is protected and in keeping with international transparency and accountability standards.
Most importantly, the Canadian funded team of technical experts assessed the project to ensure that all relevant regulations are complied with and that they can be enforced. This included environmental standards and reservoir management to safeguard the interests of the people of Guyana and that their resources are developed in a sustainable and responsible manner to the benefit of the country.
Further, in the licensing agreement, the government has insisted that routine flaring is strictly prohibited without the approval of the EPA. Flaring to maintain oil production will not be permitted. Esso Exploration and Production Guyana Limited (EEPGL) will pay the Government for the cost of gas wasted during flaring and will also be subject to fines under the EPA related to emissions from flaring. The EPA will establish a framework for a price on carbon to conform with international standards.
Additionally, the government has insisted that EEPGL manage produced water to an international standard to minimize the effects of discharging produced water. EEPGL is required to update its base design to include tie-in points and space for produced water injection equipment. EEPGL will carry out a study overseen by the Minister of Natural Resources to be completed by the first quarter of 2021 to examine the safe and efficient reinjection of produced water, including the effects on the reservoir. This is in keeping with government’s commitment to preserve marine life and water quality.
As such, the Government of Guyana remains committed to manage and harvest Guyana’s oil and gas resources sustainably in keeping with internationally recognized acceptable environmental standards and transparency for the benefit of all Guyanese.
The project in the Stabroek Block is expected to produce up to 220,000 barrels of oil per day after startup in 2024, using the Prosperity floating production, storage and offloading (FPSO) vessel. The US $9 billion Payara development will target an estimated resource base of about 600 million oil-equivalent barrels and the largest single investment in the history of Guyana.
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FID for US$9 billion Payara FDP for 2024 start
Oct 01, 2020
Minister Vickram Bharrat yesterday approved the third field development , Payara, by the ExxonMobil consortium in the Stabroek Block. After making its final investment decision (FID) yesterday, operator ExxonMobil said that the Prosperity Floating Production, Storage and Offloading (FPSO) vessel will start production in 2024 at up to 220,000 barrels of oil per day.
From left: Anand Gohil, CNOOC Petroleum Guyana Limited; Alistair Routledge, President of ExxonMobil Guyana; Minister of Natural Resources, Vickram Bharrat and Timothy Christian, Director, Vice President of Hess Guyana Exploration.
The hull is with SBM Offshore in Singapore awaiting installation of its topside modules. 10 drill centers are planned along with up to 41 wells, including 20 production and 21 injection wells.
The Payara development will cost US$9B to produce 600 million oil-equivalent barrels. This is US$3B higher than its US$6B estimate for the Liza Phase Two project, which will produce at a similar peak rate from a reserve with a similar volume estimate. Liza Phase Two is projected to start producing in 2022. The Liza Unity FPSO is currently under construction in Singapore. The extra cost is due to delay by review of Payara spanning two governments. UK firm, Bayphase reviewed Payara FDP for the last regime but ignored environmental issues. but the election farrago prolonged approval of the project.
The current government in August asked Canada to assist with evaluating the review. Former Alberta Premier, Alison Redford, led assessment of the Bayphase work with a team of technical experts, funded by Canada.
The Ministry of Natural Resources laid out new environmental rules for natural gas flaring and discharge of produced water. The government is committed to managing and harvesting resources in keeping with internationally recognised acceptable environmental standards and transparency.
FLARING
Government strictly prohibited routine flaring without approval from the Environmental Protection Agency (EPA) and flaring to maintain oil production is not allowed. ExxonMobil’s local subsidiary, Esso Exploration and Production Guyana Limited (EEPGL) will be expected to compensate the government for the cost of wasted gas during flaring and will be subject to fines under the EPA related to emissions from flaring. It must establish a framework for a carbon price in line with international standards.
The Payara production license put a 60-day cap on startup flaring, and includes emergencies, maintenance and restart as “special circumstances”. ExxonMobil will be expected to report all instances of gas flaring within 24 hours, whether allowed or not, and explain why such flaring has occurred.
There was no reference to flaring at Liza Phase One.
PRODUCED WATER
Government requires EEPGL to include tie-in points and space for produced water injection equipment, in its base design, consistent with its commitment to advocate for discharge of produced water at internationally accepted standards.
Government will oversee a study to be conducted by Exxon by the first quarter of 2021 to examine the safe and efficient reinjection of produced water, and determine the effects of the reinjection on the reservoir. The license states that the study will also seek to determine how the effects of dumping produced water in the ocean can be minimized. This is in keeping with its commitment to preserve marine life and water quality.
ExxonMobil Guyana President, Alistair Routledge claimed that the pollution is not harmful,. There was no reference to the discharge of produced water at Liza Phase One.
750,000 BARRELS A DAY BY 2026
Diligent ExxonMobil secured approval for three separate developments in four years, with a combined peak production rate of 560,000 barrels per day. All three projects will run simultaneously by 2024. The company will have five FPSO vessels producing over 750,000 barrels per day by 2026.
It identified a likely prospect for its fourth development at the Yellowtail well, believed by Westwood Global Energy to hold over 300 million oil-equivalent barrels. Chief Executive Officer (CEO) for Hess Corporation, John Hess related the consortium’s optimism that Yellowtail will support its fourth drillship and produce at a capacity of 220,000 barrels of oil per day, the same as Payara. That would take peak production to 780,000 barrels per day.
Exxon’s subsidiary, Esso, operates the Stabroek Block with 45 percent interest, while Hess and CNOOC hold 30 percent and 25 percent respectively.
Exxon is evaluating development opportunities t at Redtail, Mako and Uaru. It is forging ahead to develop the proven eight billion plus oil-equivalent barrels in record speed, boosting revenues for Guyana to proceed with urgent development on all fronts.
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(EARLIER PRESS RELEASE )
September 30, 2020
THE Government and global titan ExxonMobil will on Friday sign an agreement for the company to proceed with development of Payara field, according to Minister of Natural Resources, Vickram Bharrat. The Payara Project, located in the eastern half of the Stabroek Block, is expected to see the drilling of up to 45 development wells, which could take up to five years, with drilling initially planned to begin in 2020 and initial production by early 2023.
The project marks EEPGL’s third field development in the Stabroek block and targets 180,000 to 220,000 barrels of oil per day, with anticipation to produce approximately 5,700,000 to 6,600,000 barrels of crude oil per month.
A review of the Payara Development Project was conducted by Bayphase Oil and Gas Consultants contracted by the Department of Energy (DoE) under the last regime. The new administration assessed the work undertaken by the DoE to ensure that the interests of all Guyanese are protected and are in keeping with international transparency and accountability standards. The current scrutiny by a team of international experts is led by Canadian Queen’s Counsel, Alison Redford. President, Dr. Irfaan Ali, in sharing his views on those discussions, said: “We have made tremendous progress… We are strong on a few issues, especially related to the environmental impact; fine for gas flaring; issue of reinjection of water… Those are things we are strong on, but they (stakeholders) are making steady progress, and very shortly, we can have a full assessment.”
Minister Bharrat said that when the process is completed, the review will be made public, so that a comparison can be done between the review conducted by the international experts and that of Bayphase. The completion of the process should allow for ExxonMobil to meet its development timelines, inclusive of a Final Investment Decision (FID).
ExxonMobil is firmly established in Guyana, with an office in Georgetown and numerous ongoing exploration and development operations offshore. ExxonMobil Guyana has made 18 discoveries since May 2015, and began production in December 2019 from the Liza Phase One development project. The company is the operator of the Stabroek, Canje and Kaieteur Blocks offshore . Since 2015, ExxonMobil has increased its estimated recoverable resource base in Guyana to more than eight billion oil-equivalent barrels.
Guyana banked USD 162 million from the Exxon consortium and earns taxes from other companies, local, regional and foreign supporting the offshore industry. The consortium also funds green projects, sport, training and humanitarian aid. It stimulated exploration in Suriname and revived the regional industry, employing services from Trinidad.
Guyana is now set on a path to prosperity led by a quintessential company, a world-class partner in development of a modern society in control of its own destiny, promoting unity and creating prosperity. Stakeholders look forward to a boost in private enterprise from divestment of state assets, a stock exchange and efficient public services.
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Press Release –
EPA Issues Environmental Permit for the Payara Project
Staff WriterThe Environmental Protection Agency (EPA) on September, 24, 2020, issued an Environmental Permit valid for 5 years, to Esso Exploration and Production Guyana Limited (EEPGL) for the Payara Development Project. Among its conditions, the Permit requires EEPGL to adhere to international standards for discharge of produced water and also limits the permitted duration of gas flaring. Moreover, the Permit requires that EEPGL conducts critical post-permit studies on reinjection of produced water, flaring, cradle-to-grave waste analysis and capping stack deployment.
Specifically, the Permit allows for fines to be imposed for any flaring beyond a permitted duration. It also requires EEPGL to conduct flaring studies which will serve to inform the EPA in the setting of limits for flaring. Further, within three months of the issuance of the Permit the EPA will set fines for excess flaring.
Additionally, the Permit requires EEPGL to implement Cradle to Grave management of waste emanating from the Payara operation. To this end EEPGL is required to conduct a Cradle to Grave Waste Management Analysis on the basis of which it will revise the Payara Waste Management Plan for implementation throughout the lifetime of the project.
While holding EEPGL to international standards for wastewater discharge, the Permit also requests a study on the feasibility of reinjection of produced water. The findings of this study will inform Permit conditions in the future regarding produced water.
The Permit also requires EEPGL to mobilize a Capping Stack to the Payara location within five days or less of an uncontrolled well event. To this end, EEPGL must complete the study within six months of the issuance of the Permit to inform Capping Stack deployment which study must be approved by the EPA.
The Environmental Permit was issued following the EPA’s approval on September, 18, 2020, of the 4th Revised Environmental Impact Assessment (EIA) which was submitted by EEPGL in July, 2019. The EIA was reviewed by the Environmental Assessment Board (EAB) and by the Bureau of Ocean Energy Management (BOEM). In making its decision to approve the EIA, the EPA took into consideration the recommendations of the EAB and BOEM, as well as, comments from the public.
The Payara Development Project is the third petroleum development project to have been permitted in the Stabroek Block. Payara will entail the drilling of some forty-five (45) injection and production wells and is expected to produce between 180,000-220,000 barrels of oil per day with production slated to commence in 2023.
https://dpi.gov.gy/press-
Gov’t approves Payara licence with landmark clauses
Shaquille Bourne─$7 trillion investment is single largest in Guyana
Minister of Natural Resources, Hon. Vickram Bharrat on Wednesday signed the Payara offshore development licence with ExxonMobil, effectively catapulting Guyana’s petroleum sector in a higher gear.
Production is set to start in 2024.
“[The licence] represents the single largest investment in the history of Guyana. The investment is billed at US$9 billion, and with the amount of oil estimated to be in the Payara development area, it is estimated that Guyana will benefit from GY$7.4 trillion in government revenue,” Minister Bharrat told the Department of Public Information (DPI).
The licence included several clauses that were not part of the Liza production licence.
Flaring
“In the Payara agreement, the Government of Guyana has negotiated for fines or penalties to be instituted for prolonged flaring,” the Minister announced.
Haphazard flaring, the Minister said, would not be condoned even as he acknowledged that some flaring may be necessary.
“The Environmental Protection Agency will institute fines for pollution and the Government of Guyana will also introduce penalties for the wastage gas because the flaring means that we are wasting the gas which can be utilised in a more meaningful way.”
Minister Bharrat stated this clause comes on the heels of the Government’s dissatisfaction with flaring aboard the Liza Destiny FPSO, an issue which is being resolved.
Audit
The Agreement includes US$400,000 for yearly audits of the Payara project.
“This is something that was not in the Liza development that we managed to put in Payara,” the Natural Resources Minister noted.
Dumping of produced water
Further, the agreement provides for testing of water extracted with the crude (produced water) prior to it being expelled into the ocean. This will be done according to international standards.
The EPA will play a major role in testing the water regularly.
Minister Bharrat said the operation is safe because of its distance from the shore and the depth of the ocean at the production site.
Oil spills
The Natural Resources Minister highlighted a clause that stipulates wells must be sealed within five days of an oil spill. Additionally, the clause compels Esso Exploration and Production Guyana Limited (EEPGL) to commit to a study to bring that timeframe down to three days.
“That is something significant for our country that is now new in the oil and gas sector,” Minister Bharrat said.
Local Content
To advance local content through the petroleum sector, the Minister said EEPGL will work with the Advisory Panel on Local Content convened by President Dr. Mohamed Irfaan Ali.
“We need a strong local content framework, legislation to ensure that from the farmer to fisherman benefits. It’s not only about the big companies benefiting, but for every single Guyanese to benefit from the oil and gas sector,” the Minister explained.
Unit Development Agreement
A significant section of the agreement dealt with the partial overlapping between the Liza and Payara wells.
Minister Bharrat clarified that while part of the Liza licence covers a section of the Payara well, a Unit Development Agreement was negotiated to grant that section over to the Payara project.
It was noted that the Liza FPSO is not within the intersection of the two projects and the Government saw it prudent to not leave the overlapping section underdeveloped.
“Had we not agreed to do a Unit Development Agreement, which allows Exxon or EEPGL to draw those reserves from the Liza well into the Payara development, then it means those resources would have been wasted,” the Minister explained.
He expressed his appreciation for the work done by the President, Vice-President, Attorney General, and all stakeholders who brought the agreement into fruition.
The Payara licence was held up for nearly a year after numerous delays by the previous Administration. The PPP/C Government prioritised a thorough review upon assuming office in August.
https://dpi.gov.gy/govt-inks-