Almost two years later…VP Jagdeo yet to honour promise to release Payara report by controversial Canadian politician

Apr 20, 2022 News

---

Kaieteur News – It has been one year and seven months since the Irfaan Ali-led government has failed to honour its solemn promise to release a critical report conducted by controversial Canadian consultant, Alison Redford on the US$9B Payara project.
Specifically, Natural Resources Minister, Vickram Bharrat had said on September 15, 2020 that the Redford report on the review of the Payara Field Development Plan (FDP) would be made public in that very month. In December 2020, Vice President, Dr. Bharrat Jagdeo had also given a public commitment to have the said document made public. President Irfaan Ali had made similar utterances too.
The PPP Government subsequently granted its approval for the Payara project on September 30, 2020. But the Redford report and the terms of reference of her work remain hidden from public scrutiny.
The Redford report is of particular importance to transparency advocates and civil society groups since it would provide a deeper understanding of the extent to which Guyana’s interest was protected. Her report is not only a review of the Payara FDP but also contains an assessment of the work that was started on the Exxon document by UK-based, Bayphase Oil & Gas Consultants. Bayphase—a known client of Exxon—had started its review under the David Granger Administration but the 2020 elections disrupted the process. The COVID-19 pandemic also had its impact.
It should be noted that Bayphase has performed the review of both the Liza Phase 2 Environmental Impact Assessment and the Field Development Plan as well as the Field Development Plan review for the US$10B Yellowtail. These projects, along with Payara, are worth approximately US$30B. But the work of the Bayphase group has never made it into the public domain despite calls for this to be done in the interest of transparency and accountability.
Using a grant from Canada, the PPP/C Government after assuming office in August 2020 hired a team headed by Redford. Following the announcement in 2020 that Redford and her team would be completing the FDP review, several critical questions were raised about her past as a politician and her experience in assessing projects worth billions of US dollars.
Kaieteur News had reported that Redford, an ex-politician, resigned from her post as Premier of Alberta, Canada in 2014 for inappropriately spending Canada’s tax dollars. She was also found to have benefitted from money donated to her former political party by an ExxonMobil subsidiary in Canada, called Imperial Oil. Also, Redford does not have a known background or track record as being a successful FDP reviewer for governments with resources similar or far beyond what Guyana has.

Importantly, there were mounting concerns about the timeframe within which Redford’s team completed its review. It was done in six weeks. Industry experts have indicated to Kaieteur News that a proper review, in an expedited time period, takes nothing less than one year.
Pivotal issues that were raised about the project included its cost. Notably, Exxon stated in a release in 2020 that the Payara development will cost US$9B to produce 600 million oil-equivalent barrels. This is US$3B higher than its US$6B estimate for the Liza Phase Two project, which will be producing at a similar peak rate from a reserve with a similar volume estimate. Exxon is yet to justify this significant cost difference.
There were also two major environmental issues about the project which were not addressed to the satisfaction of several industry stakeholders. They relate to flaring and the dumping of produced water.
With respect to the former matter, the government had said it has strictly prohibited routine flaring without approval from the Environmental Protection Agency (EPA), and explicitly stated that any flaring to maintain oil production is not allowed at the Payara project.
Additionally, ExxonMobil’s local subsidiary, Esso Exploration and Production Guyana Limited (EEPGL), will be expected to compensate the government for the cost of wasted gas during flaring and will be subject to fines under the EPA, which are related to emissions from flaring.
It is also expected to establish a framework for a carbon price in line with international standards. Be that as it may, the EPA can grant permission on a month-by-month basis after taking into account, a study of the circumstances and a detailed report for requiring same. This is not a departure from the situation occurring at the Liza Phase One project, where ExxonMobil has flared over 15 billion cubic feet of natural gas.
As for the dumping of produced water (which carries extreme heat levels and various toxic chemicals when brought up during the oil extraction process), Government was supposed to oversee a study to be conducted by Exxon since last year to examine the safe and efficient reinjection of the water as well as determine the effects of the reinjection on the reservoir.
The licence states that the study will also seek to determine how the effects of dumping produced water in the ocean can be minimised. Government said that this is in keeping with its commitment to preserve marine life and water quality. In the meantime, the dumping of produced water at Payara has not been prohibited and the study, as required by the permit, has not been made public.
ExxonMobil Guyana, in the meantime, has been permitted to dump thousands of barrels of produced water into the ocean at its Liza Phase One operations. The extent of the effects thus far on the country’s marine sector is yet to be assessed by independent experts.

---

---