Govt.’s timeline for review of Exxon’s oil projects makes it impossible for proper reviews to be done – Experts

Apr 24, 2022 News

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By Kiana Wilburg

Kaieteur News – Is the PPP/C Government hell-bent on dancing to the tune of ExxonMobil no matter the cost to the nation?
That’s the question several industry experts have been asking themselves after observing that the government had explicitly asked hired contractors to review the Payara and Yellowtail Field Development Plans in 42 and 52 days respectively.

For both projects, the administration utilised two contractors—Bayphase Consultancy from the UK and the Alison Redford Group out of Canada.
With respect to the Payara FDP review, Redford was directly contracted and paid via a grant from the Canadian High Commission to conduct the review in six weeks. She was hired for the job even though she has no known track record in doing same for years in the interest of States with similar production fields. Kaieteur News had also reported that the terms of reference for the Payara review were also a secret. All that remains known is that she was hired to review the Payara FDP, a job that was initially started by Bayphase under the Granger administration. Despite promises to be transparent, Vice President, Dr. Bharrat Jagdeo; President, Irfaan Ali; and Natural Resources Minister, Vickram Bharrat have failed thus far to make Redford’s report on Payara, available for public scrutiny.
As for the Yellowtail Project, the nation was only told Redford was part of the process until the production licence was awarded. Prior to that, the government had pursued an open bidding process and ExxonMobil’s client, Bayphase, was selected for the review process. Industry experts were alarmed when they subsequently learned that Redford was involved all along.
Significantly, analysts have said that the short timeframe which the government imposes on contractors makes it impossible for any proper review to be done. “It is as though the intention was for there to be no proper due diligence; just give the appearance that something is being done and hurry it through,” commented one analyst.
Kaieteur News previously reported that a Field Development Plan is one of the most critical documents governments assess before granting companies permission to move ahead with oil projects.
Given the importance of this document, numerous industry experts have said the government must ensure proper due diligence is done by way of experienced professionals. It is on this very principle that they have expressed grave concern about Guyana’s use of Alison Merrilla Redford, a Canadian lawyer and former politician.
More than a dozen industry experts who have experience reviewing FDPs said emphatically no proper review can be done in 42 or 52 days.
Specifically, one industry expert said, “For most FPDs, you have over 100 items to check. That is why a proper review takes a year and change, sometimes longer depending on project size. In the first instance, the government must have its own FDP guidelines on minimum requirements they expect from the company. That should be public. This is needed because citizens would better understand the standards the administration is setting for companies to abide by. The North Sea Transition Authority (NTSA) does this. That authority regulates and influences the oil, gas and carbon storage industries of the UK Continental Shelf.”
The NSTA clearly states via its guidelines on its website that all FDPs must provide a clear explanation why the development concept being presented is considered optimum from a technical, environmental and economic perspective. The authority also requires that companies set out the commitments they will follow to ensure enhanced oil recovery and sound development. The expert noted that Guyana is yet to prove if the Redford/Bayphase group achieved this since their findings remain a State secret.
Experts also told Kaieteur News that FDPs must also provide a production strategy that aligns with the country’s interest. Such a strategy includes: Short-term and long-term plans on production acceleration and recoverable reserves, the number of production and injection wells and the cost to the nation, and an explanation of hydrocarbon bearing sands penetrated not included under the current development plan but which could be profitable if assumption changes such as extent of reservoir or oil price.
FDPs also include detailed information, which the government needs experienced persons to review regarding production technology and well engineering. In this area, government specialists must diligently assess proposed well design concepts including trajectory and location, in flow performance prediction, sand control and sand management, explanation of concept selection and how value for money would be achieved on each component of the project.
In light of the foregoing, and in the interest of transparency, the industry experts agreed that the PPP/C Government should disclose a summary of the work performed by Bayphase and the Redford group to date, along with a summary of the type of data used and the methods by which it was assessed.

 

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