Latest update November 15th, 2024 1:00 AM
No feasibility study for use of excess gas in Liza required – Exxon
Kaieteur News – ExxonMobil Guyana- Esso Exploration and Production Guyana Limited (EEPGL)- has responded to comments made, that it violated the sanctity of contract principle, by not conducting a feasibility study for the use of the excess associated gas in the Liza Field.
The gas in the field will be piped to shore for utilization by the Government of Guyana for power generation and liquefaction, which will generate additional income through the sale of cooking gas and other products. Former Executive Director of the Environmental Protection Agency (EPA), Dr. Vincent Adams during an Alliance For Change (AFC) press conference on April 22, told members of the press, he believes the company has violated the said principle that is hindering the government from renegotiating the oil deal, as there is no evidence of a feasibility study, though required under the 2016 Production Sharing Agreement (PSA) governing the oil block.
ExxonMobil Guyana President, Alistair Routledge
Article 12.1 (b) of the Exxon contract states, “…If there is any excess Associated Gas in the Oil Field after utilisation pursuant to Article 12.1(a) the Contractor shall carry out a feasibility study regarding the utilisation of such excess Associated Gas of such Oil Field.”
On Tuesday evening, ExxonMobil Guyana responded to this newspaper’s request for clarity on the issue that was sought since Dr. Adams raised the issue. The company in its response explained that the study will not be required as there is simply no “excess associated gas”. According to the subsidiary of the American oil company, “The Associated Gas produced from the Liza Oil Field is with priority used for the purposes related to the operations of production and production enhancement of the Liza Oil Field, in accordance with Article 12.1(a) of the Stabroek Block Petroleum Agreement.”
It went on to note, “EEPGL has established through numerous studies that all of the associated gas produced from the Liza Oil Field is fully utilized for production and production enhancement purposes. Therefore, there is no excess Associated Gas and a feasibility study for excess Associated Gas is not required under Article 12.1(b).”
The company also shared that gas produced at Liza is used for fuel and re-injected to improve oil recovery. Dr. Adams in raising the issue argued, “No feasibility study has been done at that location (Wales, West Bank Demerara). As a matter of fact, it (Exxon) violated this sanctity that this administration keeps talking about. They violated the sanctity of the contract…it says before any gas project is implemented, there has to be a feasibility study and there was no feasibility study.”
He continued that Vice President Bharrat Jagdeo has merely given assurances that the project is a “no-brainer”. Dr. Adams, a Petroleum Engineer however noted, “Every project starts with planning and it ends with planning,” adding that this detailed plan would craft the necessary steps regarding possible changes in the economics of the country, taking its development and other factors into consideration.
Citizens have been pressing for a feasibility study to be conducted for the project since there are concerns about the cost of the venture. The Gas-to-Energy (GTE) project is the single largest financial initiative ever pursued by the government. It is currently pegged at US$2.1 billion. It includes a pipeline to transport the resources from offshore to the Wales site, along with a Natural Gas Liquids (NGL) facility to treat and separate the gas and a 300 megawatt power plant to generate “cleaner” and more a “reliable” source of electricity.
- feasibility, gas, Liza, required, study
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