Jagdeo ‘sick and tired’ of media’s questions on securing greater oil benefits for Guyanese

Dec 11, 2022 News

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…maintains that all future projects will align with Trotman’s 2016 contract

Kaieteur News – Following its assumption to office, several industry stakeholders expected the PPP/C Government to secure greater benefits from the oil-rich Stabroek Block which now holds 11 billion barrels of oil equivalent resources.

Much to the disappointment of many observers, the Government has refused to do anything that would ruffle the feathers of ExxonMobil Corporation whose affiliate, Esso Exploration and Production Guyana Limited (EEPGL) benefits from the lopsided agreement signed in 2016.

In fact, Vice President Dr. Bharrat Jagdeo continues to insist that EEPGL will continue to enjoy the lion’s share of profits from all projects pursued in the Stabroek Block. His most recent declaration in this regard was issued during a press conference on Friday.

During his engagement with media operatives, he made it clear that all projects will remain shackled to the highly flawed Production Sharing Agreement (PSA). His remark was in response to questions from Kaieteur News Publisher, Glenn Lall.

The Businessman called on the Vice President to tell the nation if the Government would be seeking greater benefits for Guyanese as well as the closure of critical loopholes for the fifth project Exxon is pursuing at the Stabroek Block’s Uaru field.

Specifically, Lall asked Jagdeo if the Government would seek an increase in the royalty to be paid on that project, and if Exxon would be made to pay its fair share of taxes. He also enquired if the Government would demand full coverage insurance from Exxon in the event of an oil spill.

Jagdeo said, “We made it clear to the public that projects under the Stabroek Block will enjoy the same terms as was there in the 2016 agreement. That’s it!”

Later on in his almost three-hour briefing, the Vice President expressed his disgust for repeated questions regarding the Stabroek Block. He said it is time he puts an end to this redundancy, adding that his position on the block has been clear to all.

He said, “In Guyana things seem to be circular. Every time I come to a Press Conference it is on racism, the Stabroek Block etc. There is no proper policy discussion. Every time I come, it is the same question.”

However, Lall made it clear that questions regarding the oil sector, the most crucial industry that could make or break the future of all citizens, must be addressed. He even requested further time to ask other pertinent questions on the sector but was ignored.

The Uaru Project

In its project summary that was submitted to the Environmental Protection Agency (EPA), ExxonMobil subsidiary, Esso Exploration and Production Guyana Limited which operates the Stabroek concession, said the Uaru Project will be located in the eastern portion of the block, approximately 200 km from Georgetown and amid previous Stabroek Projects.

Current plans include drilling via drillships to produce oil from approximately 40-76 wells. Production is expected to begin between the fourth quarter of 2026 and the second quarter of 2027 with an expected field life of at least 20 years.

EEPGL said the production facilities to be installed include subsea equipment attached to the seafloor as well as processing equipment on the ocean’s surface known as a Floating, Production, Storage, and Offloading (FPSO) vessel. EEPGL said this subsea equipment is installed at approximately 1,450 – 1,950 m of water depth while noting that the main components of the subsea kit include the following: production tree, production manifold, flowlines, risers, and umbilicals. The subsea umbilicals, risers, and flowlines are commonly referred to as SURF.

Additionally, EEPGL’s document explained that the oil, gas, and water flows from the well into the production tree. The fluids are then gathered into the manifold which then connects to the flowlines before the risers take the fluids up to the FPSO for processing.

Kaieteur News understands that the umbilical lines support production by providing real time control of the subsea installation from the surface by delivering fluids to facilitate the flow of hydrocarbons.

As for the FPSO, it is an industrial floating complex that continuously separates oil from produced water and associated gas for onboard storage, and later transfer to third party tankers. The anticipated production rate for the FPSO ranges between approximately 220,000 barrels and 275,000 barrels of oil per day. The vessel will be capable of storing approximately two million barrels of oil.

Furthermore, third party oil tankers will be scheduled to offload the oil from the FPSO, making the oil available for export to the international market. The FPSO will also process, dehydrate, compress, and reinject associated gas produced from the reservoir. As the Uaru and Mako reservoir pressures deplete over time, this gas reinjection will help maintain reservoir pressure and allow for optimum production of hydrocarbons to continue over time. In addition, some of the gas will be used as fuel on the FPSO.

Furthermore, EEPGL told the EPA that it has undertaken additional studies to obtain an even more comprehensive understanding of potential impacts of effluent discharges to water, the feasibility of alternative handling of produced water, cradle to grave waste management in Guyana, emergency response capabilities, and environmental compliance monitoring and verification. The company said the learnings from current operations and environmental studies will enhance the design and implementation of the Uaru Project, thereby increasing environmental performance and economic value.

It concluded that the Uaru Project will contribute positively, directly and indirectly, to economic growth in Guyana, including increased national revenues, local procurement of select goods and services, increased direct and indirect local employment opportunities which drive associated beneficial ‘multiplier’ impacts throughout the local economy.

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