Guyana should take all the time it needs to review Payara

Aug 16, 2020 News

---

– good reviews take months, even years – experts

By Kemol King

Experts say that Guyana should take all the time it needs to review ExxonMobil’s third intended development in the Stabroek Block, the Payara project, as proper reviews may even take years to be properly undertaken.
Guyana is already projected to have to repay nearly US$10B in unscrutinized development costs to ExxonMobil and its partners, Hess and CNOOC for the development of the first two projects, Liza Phases One and Two.
Despite the sheer magnitude of those costs contained in development plans approved by the former APNU+AFC Government, the current PPP/C administration appears to be following in its predecessor’s footsteps, as it is looking to decide on a review of the Payara Field Development Plan (FDP), in less than two weeks.
The former Government had hired a UK consultant to review the plan late last year and was expected to make a decision this year.
However, that was interrupted by the country’s protracted electoral process.
ExxonMobil has, for some time, pressured Guyana to grant swift approval to the Payara development, claiming that a delay in approval would mean billions in losses for Guyana.
The company intends for the Government to grant the approval in time for it to make a Final Investment Decision (FID) by September.

It claims that “weather conditions” require such a timeline, or else there will be significant delays.
Experts have frowned on this state of affairs, as they know that proper field development reviews may take a very long time because Governments want to ensure that they safeguard the interests of and secure maximum benefits for the people.
Outspoken international lawyer, Melinda Janki, for one, said that the Government is entitled to take all the time it needs to ensure that the FDP for Payara is properly reviewed.
“If the government is going to consider Payara, they have to identify all of the threats to Guyana and impose conditions on ExxonMobil to protect Guyana from those threats.”
She does not believe that the excuse of “weather conditions” is of substance.
She said that it’s silly. Good Governance Advocate and former Presidential Advisor, Dr. Jan Mangal, has similar views.
He said that the Payara development plan cannot be adequately reviewed by an individual in a couple months.
The Government, with Canada’s assistance, has procured World Bank advisor, Alison Redford, to spearhead the review. Mangal opines that much more is needed.
“FDPs need a whole team of experts,” he said, “it needs facility experts for the stuff on the surface, it needs subsurface experts for the reservoir, it needs drilling/production experts, it needs flow assurance experts, it needs marine and meta-ocean experts, it needs operations experts, it needs cost/scheduling experts, it needs commercial experts, and export pipeline experts, etc.”
He said that if this government accepts that one expert can review a plan so quickly, then Guyana has not progressed from where it was in 2016/2017 with former Minister of Natural Resources, Raphael Trotman, who had signed away the Stabroek Block to ExxonMobil in a lopsided agreement which has been estimated to cost Guyana billions in losses.
The Guyanese public is aware that, almost a year ago, ExxonMobil had already decided that it will produce oil from the Payara discovery, despite the fact that Guyana has given no approval.
It has already handed out several contracts for works to be done in preparation for Payara, including for the ongoing construction of the Prosperity Floating Production, Storage and Offloading (FPSO) vessel.
The truth is, Janki explained, that Exxon needs Guyana to give it “free oil”, and stabilise its financial position.
However, she doesn’t believe this should be allowed to happen. She pointed out that ExxonMobil continues to flare hundreds of millions of cubic feet of gas from the Liza One project, letting toxic cancer-causing pollutants into the environment. She also reminded that ExxonMobil has signaled its opposition to paying paltry fines for small fuel spills at the same project.
Director of the Environmental Protection Agency (EPA) Dr. Vincent Adams had said that such an attitude can spell disaster for Guyana, as much larger, more disastrous spills are a possibility in this industry.
“It would be totally irresponsible for the government to look at Payara, let alone approve it when ExxonMobil’s subsidiary Esso is not even running Liza 1 properly,” Janki told Kaieteur News. “The Liza 1 flaring is a disaster for Guyana. Liza 1 has to be fixed before there is any talk of Payara. Esso [Exxon’s subsidiary] has not paid the small fines imposed by the EPA for fluid spills. You don’t give concessions to companies that show so little respect for the laws of Guyana and the EPA.”
Mangal’s advice is for the Government to wait until after the US Presidential Election in November, as the candidates on the Democratic Party’s ticket, Joe Biden and Kamala Harris, would be more amenable to a renegotiation of the Stabroek Block agreement.“We are losing US$55 billion now with the current contract,” Mangal told Kaieteur News.
As he has maintained for years, Dr. Mangal said the Government must seek renegotiation before it approves any further developments.

 

 

 

---

---