3rd Payara Field Development Plan…Canadians ink US$$$M pact for works still to be approved by Guyana

Nov 18, 2019 News

– agreement allows for release of funds even before Govt. approves

The development of a third oil field in the Stabroek Block, has for all intents and purposes been put on hold by the Guyana Government through its Department of Energy (DoE).
But this has not stopped the operators from conducting yet another deal, with a multi million US dollar pact being inked.
Canadian based Shawcor Ltd, at the end of the week, announced that its pipe coating division has entered into a detailed Letter of Intent (LoI) with Saipem for works on the proposed Payara development project, in the Stabroek Block offshore Guyana.
Saipem was earlier in the week handed the contract for the subsea systems for the Liza Prosperity—Guyana’s third Floating, Production, Storage and Offloading (FPSO) vessel, meant to be delivered to the oil-field.
The DoE is yet to approve Field Development Plans for the Payara project but this has not stopped ExxonMobil Guyana from inking a Front End Engineering and Design (FEED) Contract for that FPSO.
It also handed Saipem the contract for the subsea systems with the directive of designing and procuring ahead of any government permits.
The company as such went ahead and signed the LoI for a contract phase estimated to be similar to the individual phases of the Liza development that has already been awarded.
The company noted that as previously announced, the combined coating value of Liza phase 1 and phase 2 was approximated at Cdn$110 million.
It was also noted that subject to the Guyana government approvals, and project sanction in the form of a formal Investment Decision by ExxonMobil subsidiary Esso Exploration and Production Guyana Limited and its partners, “Shawcor will provide thermal insulation and anticorrosion coating services from its Veracruz, Mexico facility.”
It was noted however, that before the necessary government approvals and project sanction, “the definitive contract is expected to allow a limited release of funds to enable procurement activities.”
Saipem previously awarded Shawcor coating contracts for the first two phases of the Liza development in Guyana in 2017 and 2018, respectively.
Coating work under the Liza 2 project is currently in progress at Shawcor’s Channelview, Texas and Veracruz, Mexico facilities and is expected to be completed during the first quarter of 2020.
Shawcor Ltd. is said to be a global energy services company specialising in products and services for the pipeline and pipe services segment of the oil and gas industry and related products for the petrochemical and industrial market.

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