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Exxon will work with Govt. on review of Development Plan
…Liza Phase 2 will be on track – PRO says
By Kiana Wilburg
Although the coalition Government has taken a decision to increase its scrutiny of ExxonMobil’s Field Development Plans (FDP), it will have no impact on plans for the Liza Phase Two project as envisioned by Exxon.
Specifically making this point to Kaieteur News yesterday was ExxonMobil’s Senior Director of Public and Government Affairs, Deedra Moe.
The official said, “We’ve been in close communication with the government about the development plan timing and will continue to work closely with them throughout the review process. We remain on track for first oil from Liza Phase Two in 2022.”
Energy Dept. Head, Dr. Mark Bynoe
ExxonMobil’s Public Relations Officer, Deedra Moe
Asked if this move by government will delay the company’s investment for Phase Two, Moe said, “We will make our final investment decision following approval of the development plan.”
Speaking on the Government’s decision to increase its scrutiny of FDPs was Head of the Energy Department, Dr. Mark Bynoe. The Official said that the Government is interested in ensuring that its approval is premised on the knowledge of experts in the field.
“We are reviewing a FDP for Liza Two…We have been advertising in the local media for some time now for experts in the area of FDP and cost recovery. As I indicated, Government wishes to make decisions based on knowledge…”
Dr. Bynoe added, “But there is a lot of misinformation and people not seeking to understand processes…I heard some people complaining about why we are taking so long to review a FDP but these things (review of the FDP and cost recovery audits) are being financed by multinational institutions. They require us to go through a process of Expression of Interest then we shortlist and ask companies to provide technical and financial proposals and so forth. Procurement has a process by which we follow and if we sole source we are going to be torn to shreds again about why you sole sourced…”
The issue of Exxon’s investment in the Liza Phase Two project being delayed by Government’s review process came to light through an article published by Upstream Online.
The media outfit said, “ExxonMobil has delayed a final investment decision on the second-phase development of the giant Liza play off Guyana as President David Granger’s government tries to reconcile an aggressive development schedule with domestic complaints about terms granted to the US super major.”
It noted that ExxonMobil said in July that it was aiming to sanction the Liza 2 development by the end of this year, chasing first oil by mid-2022, but the final investment decision target has slipped back to the first quarter of 2019. Upstream Online attributed this to “industry sources.”
Upstream said it understands that the delay actually relates to the first Liza floater, already under construction following a contractual award to SBM Offshore.
The media outfit said, “This first phase of development, featuring a floating production, storage and offloading unit with a production capacity of 120,000 barrels per day of oil, has already received government approvals and project sanction, and is expected to start producing in 2020.
“Cost recovery arrangements for Liza 1 were never fully reviewed, however, and this element continues to come under scrutiny. The Granger administration recently put out a tender for consultancy services in order to obtain an independent analysis of this aspect of the cost oil aspects of the production-sharing agreement that governs the Liza development, slowing the approvals process on Liza 2.” (SEE LINK FOR FULL ARTICLE https://www.upstreamonline.com/hardcopy/1637799/liza-2-sanction-slips-as-guyana-workload-grows)
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