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Jagdeo denies promising Exxon and partners approval for third oilfield
General Secretary of the People’s Progressive Party (PPP), Bharrat Jagdeo, said yesterday that he has not discussed any of the projects of the Stabroek Block with ExxonMobil and its partners who were awarded interests in the block.
Hess CEO, John Hess (David Orrell/CNBC)
PPP General Secretary, Bharrat Jagdeo
During a press conference at his Church Street office yesterday, he was asked whether in his discussions with those oil companies, he promised approval for the Payara oilfield within a certain period.
Esso Exploration and Production Guyana Limited (EEPGL) is the operator and has a 45 percent working interest, while Hess Guyana Exploration Limited has 30 percent interest and CNOOC Petroleum Guyana Limited has 25 percent interest.
Those companies appear to be powering ahead with their plans for production in the Payara oilfield despite the fact that the field development plan has not yet been approved.
ExxonMobil has moved ahead with plans for the third Floating Production Storage and Offloading (FPSO) vessel for the Payara Project.
In a press release just a week ago, 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.
Jagdeo said that his most recent meeting with ExxonMobil was about a month ago. And even then, he said “We have not had any discussion on any of these projects.”
The Opposition Leader explained that what he made clear to the local representatives of Exxon, Hess and CNOOC is that the PPP, if elected, would seek to implement a robust framework to manage the Petroleum sector. He said that they had expressed concern to him that oil production on the Stabroek Block would be politicized during election season, and that it may have the unintended effect of interfering with smooth operations.
He said that if requests come in for approval, the PPP would be thorough in its examination, but that it would also seek to process those requests expeditiously.
Jagdeo’s comments come after an Energy Conference was held in Florida on Wednesday last, where Hess Corporation’s Chief Executive Officer (CEO), John Hess, told the gathering that there would be no disruption of the plans the three companies have for their work on the Payara project.
He is quoted as saying “Exxon (Mobil) is working very closely with the current government and also the opposition, to make sure that we are all aligned, so that when either the current president gets re-elected in Guyana on March 2 or a new president is elected, ah you know, the technical work will be done so that we can move forward rather expeditiously with getting official approval with the investment for the Payara.”
This stands starkly in contrast with recent actions by Energy Department officials, who have sent a clear message to Exxon and its partners that their hurried moves toward production will be met by a careful and thorough examination of their plans.
ExxonMobil has already racked up billions in costs to Guyana for the Liza-1 and Liza-2 projects. But the Energy Department has decided to procure a third party reviewer to hold its hand through the examination process, before it decides whether it will approve the third project.
Hess, in Florida, told the conference “the Payara ship which we have already started to spend money on and the government, once a national elections gets in business after March 2, we are pretty confident that Payara will be authorised.”
According to the Hess CEO, “We already have three ships on the way.”
He also said that the Hammerhead discovery has already been found to be commercially viable.
Hess has projected as many as seven Floating Production Storage and Offloading vessels operating offshore Guyana in the Stabroek Block.
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