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Exxon’s premature handout of contracts is “a breakdown of process” – Robert Badal
Presidential Candidate of Change Guyana Robert Badal has opined that ExxonMobil’s handing out of contracts for works related to the development of the Payara oilfield constitutes a “breakdown of process”.
‘Change Guyana’ Presidential Candidate, Robert Badal
He made the statement during a press conference yesterday at the Pegasus Hotel, Kingston.
The businessman, who is contending for the presidency in the upcoming General Elections, alongside running mate Nigel Hinds, is questioning why the oil major would go ahead with contracts before the Energy Department gives the go-ahead.
“How can you move forward with a development plan and there’s no approval of the [field] development plan?” he asked.
A field development plan is a layout of all of the processes and activities intended to develop an oil field, and the manner in which those will be executed. Before it begins to develop a field, an oil company is required to hand over its plan to the Department of Energy for approval before it gets to work.
ExxonMobil has been telling the public that it intends to get approval for the project soon, but the Energy Department hasn’t even started the review process. It has placed on hold the third field development plan submitted by Esso Exploration and Production Guyana Limited (EEPGL) and its partners Hess Corporation and CNOOC.
It is searching for a third party reviewer to hold its hand through the process. Though it has gained some experience during the review of the Liza-1 and Liza-2 projects, it wants to ensure that the review is done right.
Badal raised the matter of the costs that will be incurred from the development of the two approved projects.
ExxonMobil and its partners on the Stabroek Block, Hess and CNOOC Nexen, are set to recover nearly US$10B in capital costs from the development of the Liza-1 and Liza-2 projects.
The businessman said that, with such high costs, it is absolutely necessary for them to be verified by experts in the field, and that Government should not be allowed to commit the people’s money in an irresponsible manner.
EXXONMOBIL POWERS AHEAD
Early last month, ExxonMobil moved ahead with plans for the third Floating Production Storage and Offloading (FPSO) vessel for the Payara Project.
In a press release, SBM Offshore, a Dutch firm, announced that it was awarded a contract to perform works for the FPSO.
Government and Public Affairs Advisor for ExxonMobil Guyana, Janelle Persaud, had told Kaieteur News, “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.”
Lack of approval for the Payara Field Development Plan has not stopped SBM Offshore from continuing business as usual, issuing more contracts.
This past week saw orders placed for two hulls, for use in the construction of two new FPSOs. The deal was inked with Shanghai Waigaoqiao Shipbuilding and Offshore and China Merchants Industry Holdings.
These include the hull for ‘Liza Prosperity’ for the Payara Field and the other for a Brazilian Offshore development.
It doesn’t stop there.
ExxonMobil also recently gave Italian-based Saipem, a multi-million US dollar contract, for the subsea systems, for the still to be approved Liza Prosperity.
According to reports, the company, before obtaining the necessary Government approvals and project sanction, had been directed through the contract to start ‘limited’ activities, namely detailed engineering and procurement.
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