Stabroek Block’s 4th Project… Yellowtail licence to be award in March –Jagdeo

Feb 04, 2022 News

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Kaieteur News- Vice President, Bharrat Jagdeo revealed to members of the media yesterday that ExxonMobil and its partners, Hess Corporation and CNOOCL Petroleum Limited, could get their licence for the US$9B Yellowtail Project to be executed in the Stabroek Block by the end of next month.

The Vice President said there was the expectation that the review of the Field Development Plan and subsequent issuance of the environmental permit and licence would have been completed since December 2021. He said this did not occur as there were some setbacks. In spite of the internal challenges, Jagdeo said, “…We are working more, and we are anticipating the completion of everything by the end of March latest. We have consultancies in place and the Ministry of Natural Resources (in review mode).”
Dr. Jagdeo said a draft licence is already worked out and a parallel process is being conducted by the Environmental Protection Agency for an authorization permit.
Kaieteur News reported last month that twelve companies, inclusive of two well established clients of Stabroek Block Operator, ExxonMobil, submitted bids to the National Procurement and Tender Administration Board (NPTAB) for the review and evaluation of the Field Development Plan for Exxon’s fourth project –Yellowtail.
The companies and their bids are as follows: Infinity Services in collaboration with XWells Mexico – US$617,500; Orwell Offshore – US$617,650; MSI International -US$817,761; Endeavour Management –US$598,934; Future Energy Partners Limited – US$901,482; IHS Global Inc.- US$1,493,502; Bayphase-US$423,360; RPS Energy Consultants Ltd. – US$494,000; Sunstone Energy Advisory Service –US$785,040; Sproule –US$661,440 and StratOil Energy Services –US$324,080.
Canadian firm, Sunstone Energy Advisory Services (SEAS) says it comprises some of the world’s top experts while providing geoscience services for oil and gas investment and international growth. Importantly, it boasts on its website of having key 25-year-old relationships with ExxonMobil, Hess, and CNOOC, the Stabroek Block operators. It also lists as one of its key achievements, work it has done on the Guyana Project (Discovery & Development) 2013-17 which led to the discovery of 10 Billion barrels of recoverable oil resources.
As for Bayphase, this is an international oil and gas consultancy which has decades of auditing experience but is a well known client of Exxon. It has previously been awarded contracts here and is based in the UK.
TENDER DETAILS
It was on January 8, last, that Kaieteur News published the government’s request for financial and technical proposals from qualified firms to review the Yellowtail FDP. Yesterday was the closing date for submissions. The project documents note that the duration of the assignment is expected to be 50 days, with the possibility of work starting by February 7, 2021, should all go as planned.
The bid documents state that the firms are required to consider Guyana’s legislative and contractual framework, international best practices and industry standards, and the specific conditions present in Guyana, then proceed to conduct an in-depth review of the Yellowtail Field Development Plan (FDP).
Government said the review must include all supporting and reference documentation, along with the related Environmental Social Impact Assessments (ESIA) submitted by the Stabroek Block Licensees.
It was further noted, that the review must include at minimum, an assessment of the strategy and the development model, as well as the criteria for the choices that have been made by the Licensees, including cost effectiveness, and potential alternatives; engineering, geological and geophysical interpretations, simulations, and estimations, including recovery factor efficiency using natural gas injection and available natural gas for export; and the well and reservoir management strategy, taking into consideration the government’s objectives of maximising the recovery of hydrocarbon resources and having no gas flared.
Interested firms would also be expected to review documents pertaining to the proposed oil and gas surface facilities, the associated financial models, economic analyses and cost estimates and reports, towards ensuring financial optimisation of oil and gas recovery profiles; the Health, Safety, Environment and Social (HSES) impacts and proposed mitigation; the Decommissioning Plan and Budget; the natural gas utilisation plan for the field; and the overall risk management strategy.
Furthermore, Kaieteur News understands that, the successful applicant would be required to prepare a report, setting out the opinions formed in the evaluation of the FDP and ESIA, addressing at minimum, compliance or non-compliance with the requirements of the existing legislative and industry standards, including any deficiencies, unresolved issues and areas of additional assessments or technical analysis that the government should request before making a determination on the FDP.
According to the government, it expects support for the Natural Resources Ministry through engagements and information exchanges, with the Licensees as well as the provision of on-the-job training to Guyanese during the FDP evaluation process.
TRILLION DOLLAR PROJECT
Kaieteur News previously reported that development costs for the Yellowtail project are poised to exceed US$9B or GY$1.8 trillion.
According to project documents, Yellowtail will consist of drilling approximately 41 to 67 development wells; installation and operation of Subsea, Umbilicals, Risers, and Flowlines equipment; installation and the operation of a Floating Production Storage and Offloading (FPSO) vessel in the eastern half of the Stabroek Block; and— ultimately—project decommissioning.
The FPSO will be designed to produce up to 250,000 barrels of oil per day. The initial production is expected to begin by the end of 2025–early 2026, with operations continuing for at least 20 years. The project is expected to employ up to 540 persons during development well drilling, approximately 600 persons at the peak of the installation stage, and 100 to 140 persons during production operations.

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