Guyana, ExxonMobil about to ink Payara oil well approval

— Hefty fines for flaring, dumping untreated water

Guyana is on the verge of signing an agreement with ExxonMobil for its Payara Development Plan that would provide for hefty fines for flaring and the dumping of untreated water back into the sea, Minister of Natural Resources Vickram Bharrat said Friday.

He told News-Talk Radio Guyana 103.1 FM/Demerara Waves Online News that the actual fines were still under discussion and would be ironed out before the draft agreement is approved by Cabinet and make way for its signing.

“We have managed to negotiate on a number of environmental issues…..flaring will carry a fine. Water will have to be treated to international standard before dumping. I think we have a better agreement than Liza,” he said.         

Mr Bharrat said representatives of ExxonMobil and the Guyana government could very well sign the agreement before the end of September, a move that would make way for the consortium, Esso Exploration and Production Guyana Limited, to make its final investment decision (FID).

Mr Bharrat also said experts were still quantifying the amount and value of oil and gas contained in the Payara well.

The Natural Resources Minister credited Vice President Bharrat Jagdeo with pushing for no flaring and for the treatment of water being used in the production of oil and gas, acknowledging that no such provisions had been included in the review by the United Kingdom-headquartered oil and gas consultancy, Bayphase Limited.

On the issue of delineating an overlap between the Payara and Liza wells, the Natural Resources Minister said that would be addressed under Section 44 of the Petroleum Act that provides for the securing of more effective recovery of petroleum from the specified reservoir.

On the issue of flaring, he said the floating production storage and offloading (FPSO) vessel, Liza Unity, being constructed for the Payara well, would be modified to prevent issues encountered with Liza Destiny. The President of ExxonMobil Guyana, Alistair Routledge earlier this month said he hoped that the issue of flaring at Liza Unity would be resolved by the end of this month.

Mr Routledge is already on record as defending the safety of discharging treated water into Guyana’s Exclusive Economic Zone where several deepwater exploration and production wells are being drilled.

In the context of reported preferences for the production water from the Payara well to be re-injected into the reservoir, Mr Routledge warned that doing so could possibly cause some problems. “There are some potential risks to doing that. There are some chemistry issues between the produced water and the reservoir fluids into where we would inject which can cause problems, potentially raising fractures in that part of the reservoir,” the ExxonMobil official has said. Noting that these are “quite complex balancing acts,” he has said treatment of water for re-injection could cause more air-emissions from the treatment facilities.

ExxonMobil has publicly cautioned that it could shift its investment resources to other projects instead of waiting for much longer on Payara. This latest Payara review is being conducted by a team led by Canadian Queen’s Counsel, Alison Redford who was picked by the Canadian government at the Guyana government’s request. The Guyana government, in the face of criticisms about Ms Redford, has sought to shore up her credibility by highlighting her work in the area of energy regulatory reforms in several countries and organisations such as Canada, Pakistan and the World Bank.

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Comments

  • guyaneseonline  On September 26, 2020 at 1:51 am

    The Ali Administration has sold out
    Sep 26, 2020 Front Page Comment, Kaieteur News

    President Ali appears powerful when talking but is weak in delivering. The permit for Payara Field Development Plan has been approved after a record-breaking review which turned out to be charade and a cheap joke. Guyana accepted, without objection or a fight, another 6 for a 9.

    The wool is now being pulled over our faces. This grand betrayal is being garnished with talk about “hefty fines” for environmental wrongdoing.

    Instead of using Payara as leverage to obtain a better deal, our leaders have once again conspired to shortchange our people. It is yet another link in the chain of treachery. Yet again, they have sold us out.

    All over the world, former colonial societies are agitating for a review of unfair terms in agreements signed with oil companies. Guyana had signed the worst deal ever and the calls were vociferous for a renegotiation to secure a better deal which would allow us, our children and grandchildren to have a decent life free from want.

    The Ali administration was presented with a golden opportunity to make this happen. Instead of grasping this opportunity, his government has instead given its stamp of approval to the ugliest oil deal ever signed. This decision by the Irfaan Ali administration represents the ultimate betrayal. It is unredeemable and an unforgivable act. It smacks of utter disregard for the Guyanese people. It is sordid and sickening.

    The Guyanese people were not asking for much. All they wanted was a higher rate of royalty, less in terms of reclaimable expenses and greater transparency. These hopes for a better deal were dashed. The Irfaan Ali administration has failed the people. His government has sold out the people’s birthright.

    Related
    President Irfaan Ali skirts US journalist’s question about fairness of Exxon deal
    September 19, 2020 – In “News”
    Guyanese should demand that President Ali hire Jan Mangal
    August 18, 2020 – In “Letters”
    Applaud President Ali for Govt.’s decision to review Payara, putting Guyana’s interests first – August 15, 2020 – In “Letters”

    • Curtis  On September 26, 2020 at 10:53 pm

      Ali and Jagdeo have now become America’s bitches!!!!!

  • kamtanblog  On September 26, 2020 at 4:20 am

    Loud on words
    Low on action

    CorV good excuse for no signature to Guyana’s
    Oily future ! It’s a slippery slope with demand/supply issues.
    Exon wants quick returns on its investment.
    Govt wants long term security for its people’s.

    One profit motivated
    Other power motivated

    Chalk and cheese agendas !
    Now is not the time to be speculating on
    future oil production…
    Q who controls oil production ?
    Q who decides on oil prices ?
    Q OPEC failure is Guyana’s hindsight.

    Price of oil can go up or down …
    more down than up with a “winter demand”
    blip ! Guyana’s govt should not put all eggs
    in one basket ! Invite others to the feeding
    frenzie. Norway, UK, Oil producers et all.

    If govt goes ahead with legislation hope it’s
    a free vote after a lengthy debate in parliament.
    Let it be made public how MP’s voted.
    Transparency/accountability way forward
    Guyana’s future at stake !

  • Douglaman  On September 26, 2020 at 10:51 pm

    I am back online. Was working in the interior of Guyana on a project – no internet.

    Nothing unexpected here. Massa Pompeo visits and instructs the real President to get moving. After all it was Jagdeo that signed the original agreements with Exxon… giving them 60 blocks rather than 10 based on the Government regulations. Puppet Ali – the latest will do as he is told.

    Plus it was Jagdeo (the real President) who instructed his puppet Ramotar to give more blocks adjacent to Exxon to the “companies” that later sold them to Exxon.

    This will not end well….. Guyana’s PPP said they would get a better deal..etc etc.. They were voted in based on their tough stand… Now with orders from the Oil King they have to try to fool the people again.

    • dennisalbert  On September 28, 2020 at 12:56 pm

      The Americans think ahead. I wonder if the reason for Janet Jagan marrying Dr. Cheddi was to take a grasp on the oil reserves? Dr. Jagan must be a very handsome man for an American to marry him during the racial segregation period of the USA.

  • dennisalbert  On September 28, 2020 at 12:54 pm

    Why fire Dr. Vincent Adams for the same issue he raised in the contract (flaring, residue water injection in the ocean)?
    Dr. Vincent Adams was right all along with regards to pollution.

  • Jo  On September 28, 2020 at 8:14 pm

    Douglaman has said it in a nutshell. The Indians were all braying about the Coalition betraying Guyana’s interest (as though it wasn’t Jagdeo that signed the deal in the first place) and the entire “big talk” was the expectation that they were the smart ones who could fix the problem. There were Caribbean experts who wrote about the possibilities of an improvement. But here, now, all the chatter has stopped and they’ve not done a darn thing to improve matters. Exxon will do as it sees fit. Pompeo came down to tell them who’s boss and what would be expected. They’re craven enough to kow-tow. At least Granger spoke up to US intervention. The games will go on.

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