ExxonM hands EPA impact study for 6th project

Aug 21, 2023 ExxonMobil, News, Oil & Gas

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…4 months after receiving approval for 5th project

Kaieteur News – Already producing an average of 400,000 barrels of oil per day in the Stabroek Block from the Liza One and Liza Two projects- without full liability protection against an oil spill- Esso Exploration and Production Guyana Limited (EEPGL), the operator of the Stabroek Block has submitted an Environmental Impact Assessment (EIA) to the Environmental Protection Agency (EPA) for its sixth deepwater project, Whiptail.

This key document lays the foundation for the regulator to make a decision in granting a Permit for a planned development which can affect the environment and human life. It identifies the risks involved in the project, as well as lists mitigative measures that can be implemented.

The Whiptail project is ExxonMobil’s largest oil project to date. It seeks to produce up to 275,000 barrels of oil per day (bpd). The company submitted an application to the EPA back in January for the project. It was also revealed by the Executive Director of the agency that the company was ordered to conduct an impact assessment for the development.

In a Public Notice published in Sunday’s edition of Kaieteur News, the EPA announced that the EIA along with the Environmental Impact Statement (EIS) was submitted by the oil company. It also noted that this means the public would have 60 days- commencing August 20, 2023- to review the document and make submissions to the EPA as they consider appropriate, in accordance with Section 11 (10) of the Environmental Protection Act, Cap. 20:05.

Though the regulator said the document was available on its website yesterday for download, this was not the case.

Notably, ExxonMobil’s sixth and largest oil project seeks to produce oil at the Whiptail, Pinktail and Tilapia fields. According to the Project Summary, Whiptail is located in the south eastern portion of the Stabroek Block, approximately 183 km from Georgetown. Current plans include drilling via drill ships to produce oil from approximately 40 – 65 production and injection wells.

The company hopes to start up the sixth development by the fourth quarter of 2027 or first quarter of 2028. It has an expected field life of at least 20 years.

Exxon explained, “The anticipated production rate for the (Floating Production Storage and Offloading vessel) 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. 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 re-inject associated gas produced from the reservoir.”

The company said that its experience from current operations and environmental studies will enhance the design and implementation of its sixth offshore deepwater development. Not only that but it will also increase environmental performance and economic value, Exxon stated.

The development of the three projects under one application means one FPSO will be used to develop the three fields. This contributes to the reduction of investment or expenditure required in the activities. It also aids in boosting production activities in keeping with the Government’s plan to accelerate such activities.

Kaieteur News understands that ExxonMobil utilized the services of its Consultant, Environmental Resources Management (ERM). The credibility and independence of the firm has been questioned in the past by stakeholders who flagged what was described as a “long running relationship”, with ExxonMobil and the EPA.

To date, ERM has completed all of ExxonMobil’s EIAs, except for its fifth impact study, conducted by Acorn International. It is unclear why this Consultancy firm has been booted.

Only four months ago (in April), Exxon received the nod of approval by the EPA for its fifth project, Uaru.

The Uaru project is expected to cost US$12.7B and produce about 250,000 barrels of oil per day after coming on stream in 2026. The cost of the sixth project has not yet been revealed.

Oil spill

Even as ExxonMobil races ahead with the production of Guyana’s sweet light crude discovered in the Stabroek Block, the company has been reluctant to provide the country with a signed parent company guarantee to protect the state from footing the costs associated with a spill.

Presently, Guyana has a US$600 million oil spill insurance policy per occurrence along with a US$2 billion affiliate company guarantee. Meanwhile, impact studies done by Exxon so far have revealed that a massive spill can impact the country’s Caribbean neighbours. International Financial Analyst, Tom Sanzillo however pointed out that the islands located within the path of a potential oil spill from the Guyana project produce more than US$140 billion of economic activity annually, largely based on the maritime and tourism sectors. This means that US$140 billion of economic activity is at risk from a Guyana oil spill.

Meanwhile, Alistair Routledge, President of ExxonMobil Guyana during a media engagement in March said the US$2 billion sum does not did not consider ensuing liabilities of potential impacts on 12 Caribbean territories.

Two Guyanese men are currently fighting for ExxonMobil to supply an unlimited parent guarantee to cover all costs above the insurance policy in place. The matter is presently before the Appeal Court, following a ruling by the High Court’s Justice Sandil Kissoon in favour of the Guyanese citizens, Godfrey Whyte and Frederick Collins.

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• Esso Exploration and Production Guyana Limited (EEPGL), Executive Director, Liza, oil, sixth project

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