Energy Dept. intensifies scrutiny, slows down Exxon’s rush to develop third oil field

Nov 08, 2019 News

By Kiana Wilburg

For months now, the Stabroek Block licence holders had been hopeful of securing Government approvals by year end to move full steam ahead with investments for the development of Payara, the third oil field project on the Stabroek Block.

ExxonMobil’s Public and Government Affairs Advisor, Janelle Persaud

Energy Department Head, Dr. Mark Bynoe

But ExxonMobil and its partners, Hess Corporation and CNOOC/NEXEN, will have to hold their breaths a little while longer.
During a press conference that was held recently by Energy Department Head, Dr. Mark Bynoe, the media was told that a third party reviewer has to be hired to assess the development plans for Payara.
He said that such an expert for increased scrutiny of the development plans is needed even though an initial assessment was done by the Energy Department as well as the Guyana Geology and Mines Commission (GGMC).
He said that the agencies’ preliminary assessments were done based on the experience gained from the evaluation of plans for the Liza Phase One and Two Projects.
The Director said that the Department of Energy is progressing with the expedited procurement process for a third party reviewer with the help of the World Bank, one of Guyana’s international development partners.
Additionally , Dr. Bynoe said that the Department is targeting the first week of December for the third Party Reviewer contract award and subsequent third Party Review into the first quarter of 2020. It is hoped that the completion of the review process would also be completed early next year.
SBM GETS CONTRACT FOR FPSO
While the Energy Department is handling those matters, ExxonMobil has moved ahead with plans for the third Floating Production Storage and Offloading (FPSO) vessel for the Payara Project.
In a press release yesterday, SBM Offshore, a Dutch firm, announced that it was awarded a contract to perform works for a Floating Production, Storage and Offloading vessel (FPSO) for the Payara project.
But ExxonMobil’s Public and Government Affairs Advisor, Janelle Persaud was keen to clarify yesterday as well that this was not the full contract that was awarded.
In an invited comment, Persaud said, “We are working closely with the Department of Energy and Environmental Protection Agency (EPA) on Government and regulatory reviews for the Payara project.”
The official added, “As part of our preparations for the project, we have awarded an initial contract to SBM for a limited release of funds to begin Front End Engineering and Design (FEED) activities and secure a hull for the Payara project FPSO.”
Similar to the Liza Phase Two project, Persaud explained to Kaieteur News that this will allow initial work to begin but the final award is conditional on Governmental approval.
She further stated that the benefit of doing so ensures timely progress and maximises value by locking in lower contract costs and continued growth in local content opportunities as projects move through development and into production.
Following project sanction and an authorisation to proceed with the next phase, this newspaper understands that SBM Offshore will construct, install and then lease and operate the FPSO for a period of up to two years, after which the FPSO ownership and operation will transfer to EEPGL.
The FPSO, to be named Prosperity, will utilise a design that largely replicates the design of the Liza Unity FPSO. As such, the design is based on SBM Offshore’s industry leading Fast4Ward® programme that incorporates the company’s new build, multi-purpose hull combined with several standardised topsides modules.
The FPSO will be designed to produce 220,000 barrels of oil per day; will have associated gas treatment capacity of 400 million cubic feet per day and water injection capacity of 250,000 barrels per day. The FPSO will be moored in water depth of about 1,900 meters and will be able to store around two million barrels of crude oil.
Kaieteur News understands that SBM Offshore is exploring options to maximise local content and Guyanese workforce development, building on efforts to date on the Liza Destiny and Liza Unity FPSOs.

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