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Guyana paying Exxon to train oil regulator
Kaieteur News – According to the Environmental Permit for the Payara Project in the Stabroek Block, American oil giant, ExxonMobil, has up to September 23, 2021 to submit an updated Environmental and Socioeconomic Monitoring Plan. That document which has to be provided to the Environmental Protection Agency (EPA) is required to include protocols, performance standards, and responsibilities in consultation with and jointly implemented by ExxonMobil and the EPA. Importantly, whatever capacity needs, such as training, that is required by the EPA to implement the plan, ExxonMobil is bound by the permit to provide it.
Furthermore, the permit notes that external expertize (local and international) may be sourced by the EPA as may be required to augment this monitoring plan and/or conduct associated audits. Once again, the permit holder will be responsible for all reasonable and jointly agreed upon costs associated with this monitoring plan and any associated independent audits.
It is important to note that ExxonMobil would be able to recover the foregoing costs from its production operations in the Stabroek Block. This protection is perfectly secured in Annex C of the Production Sharing Agreement that was signed in 2016 for the offshore concession. By being able to recover such costs, it therefore means that Guyana is paying ExxonMobil to support the nation’s regulator in doing its job.
While Guyana has turned to ExxonMobil for this support, it is important to note that at least three countries, Trinidad, Suriname and Mexico, have made it pellucid over the years that they are willing to share their oil and gas experience with Guyana for these very matters.
In 2018 for example, Guyana had entered into a Memorandum of Understanding (MoU) with its CARICOM sister, Trinidad and Tobago, to engage in the exchange of knowledge on the oil and gas sector. The document specifically noted that, the Parties may cooperate in the following areas: the exchange of information on public policies in the area of the regulation, administration and sovereign management of hydrocarbon resources and technology transfer; the promotion of training and capacity building of technical personnel and the development of energy technologies through, inter alia, technical visits, secondments, seminars and presentations; the development of policies, plans and protocols relating to health, safety and the environment; and any other means of cooperation agreed to by the Parties in the areas related to the agreement in accordance with the legal system of each country.
Furthermore, Kaieteur News was the first to report in 2018 of Mexico’s readiness to assist Guyana in making the EPA a robust regulator for the sector. The following year, Suriname had also made it clear that it stands ready to lend its technical expertize. This too was reported on extensively.
Guyana would have also received technical assistance from the World Bank via a US$20M loan to help strengthen the capacity of the EPA.
THE PAYARA PROJECT
The Payara development plan includes a floating production, storage and Offloading (FPSO) vessel, named Prosperity. It is expected to produce 220,000 barrels of oil per day. The development will have up to 45 wells, including production wells, water injection wells and gas injection wells. The Payara development startup is expected as early as 2024.
This development is ExxonMobil’s third project.
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