We are hopeful of signing the Payara agreement today – Minister Bharrat

Sep 26, 2020 News

“Contrary to misleading reports in some sections of the media, the Government did not give approval for ExxonMobil’s Payara project yesterday. We have a draft agreement and we are hopeful of signing it today.” Those were the words of Minister of Natural Resources, Vickram Bharrat who sought to set the record straight on the approval process for the project which is expected to produce 220,000 barrels of oil per day once it comes on stream by 2024.

Natural Resources Minister, Vickram Bharrat

Minister Bharrat said that the current agreement has several safeguards in place, two of which include stiff fines for the burning of gas and failure to treat reservoir water before disposing of it into the ocean. Asked for a ballpark figure of the fines, Minister Bharrat said that this is still being finalized. He was keen to note however that the findings of the Payara Field Development review would be released next week.
That exercise was initially started by UK firm, Bayphase Oil and Gas Consultants and continued by former Premier of Alberta, Canada, Alison Redford. The PPP government had said that Redford was hired thanks to a grant from the Canadian High Commission. Her team consisted of the former Deputy Minister of Energy in Newfoundland, Canada; senior international reservoir engineers; and Mr. Jay Park, Q.C, Managing Partner of Park Energy Law based in Canada and the United Kingdom.
When the review got underway in August, Kaieteur News would have reported that one of the critical issues that stymied swift approval pertained to ExxonMobil’s desire to retain the loopholes it got in the Liza One and Two permits which allow for flaring.
The other matter of concern pertains to the dumping of produced water into the ocean. When oil companies drill the sea floor to extract oil, it is not only oil that comes up with it; water is part of the mixture too. As a result of it not being needed, it is separated and disposed of.
The critical issue is how that disposal is being done. International best practices dictate that this produced water should be re-injected into the earth’s surface. Research conducted by Kaieteur News notes that in some cases, the produced water is discharged into oceans and other offshore water channels. Because no two geographic regions are alike, studies are done to assess the environmental risks of the produced water’s toxicity on marine life before granting approval for the disposal of it into the ocean.
In Guyana’s case, not a single study was done for the Liza Phase One or Two Projects, yet Guyana went full steam ahead with approving the permits for those projects, which allow for the disposal of produced water into the ocean.

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