Exxon plans up to 25 helicopter flights a week for 6th oil project

Apr 16, 2024 ExxonMobil, News, Oil & Gas

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Kaieteur News – The ExxonMobil-led consortium is planning to make up to 25 helicopter trips per week when it begins operations at its sixth project, which was approved last week.

The information on the helicopter flights is contained in the Environmental Impact Assessment submitted and approved as part of the regulatory requirements for the setting up of such projects. According to the now public document, “aviation support is expected to be about 20 to 25 round-trip flights per week during drilling and installation and an estimated five to seven round-trip flights per week during production operations and continued development drilling activities.”

It did note however, that helicopter usage will be optimised for all offshore activities for the Liza Phase 1, Liza Phase 2, Payara, Yellowtail, Uaru, and Whiptail development projects, as well as for exploration drilling. ExxonMobil in its EIA submits that during development, approximately 10 to 15 round trips per week will be needed in relation to support vessels while during installation, approximately three to five round trips per week; and, during the production operations stage, approximately three to five round trips per week.

Additionally, the Project will require the use of onshore facilities such as shorebases, laydown areas, pipe yards, fabrication/maintenance facilities, warehouses, fuel supply depots, heliport, and waste management facilities to support development drilling, FPSO/SURF installation, commissioning and start-up, production operations, and ultimately, decommissioning.

According to the operator it plans to use existing Guyana shorebases to support the Project; new onshore facilities in Guyana, which would be developed and permitted by third parties as separate projects, may also be used by the Project. “All onshore support facilities will be owned/operated by others and will not be dedicated solely to the Project.”

Only recently this publication reported that even before Guyana began producing the sweet light crude discovered in the prolific Stabroek Block, ExxonMobil was chartering helicopter services that cost the country a whopping $5.4M daily.

This finding was exposed in the US$1.6B audit, conducted by a British firm, IHS-Markit. The now public report detailed that the oil giant in 2015 contracted a Trinidadian company, National Helicopter Services Limited at a total cost of US$5.1M.  In 2016 and 2017, the company then recruited the services of a UK firm, Bristow Helicopters International at a cost of US$11.6M and US$12.9M, respectively.

Upon closer examination of the audit report, it is revealed that Exxon engaged in a sole-sourcing arrangement with a Trinidadian company for helicopter services in 2015. The auditors noted that while there were two providers of helicopter services to the offshore facilities in Guyana during the audit period, Bristow Helicopters underwent a competitive tender process, whereas National Helicopter Services International was single-sourced. The report further elucidated that the contract with Bristow Helicopters was in line with prevailing market rates, whereas National Helicopter Services International incurred higher costs. The auditors highlighted the lack of justification for these increased costs, recommending that the additional amount paid to National Helicopter Services International, amounting to US$1,604,544, not be approved for inclusion in the cost bank without proper justification.

Subsequent analysis of the audit report by VHE Consulting for the years 2018 to 2020 did not reveal any expenses related to helicopter services. However, it is important to note that such charges are expected to be substantially higher, considering the commencement of oil production activities offshore in 2019. Helicopters serve as a vital means of transportation for crew members in the oil and gas industry, offering expedited travel compared to boats.

While the Guyana Revenue Authority (GRA), tasked by the Government of Guyana with overseeing the audit, has indicated approval of the report submitted by IHS-Markit and recommended acceptance of the audit findings, there has been no progress in addressing the disputed costs flagged by IHS-Markit.

In 2019, a Consultant was engaged to review Exxon’s expenses from 1999 to 2017. The 2021 report by IHS identified a total of US$214.4 million in potentially questionable or unjustifiable costs billed to the country by ExxonMobil. Commissioner General of the GRA, Godfrey Statia in a public missive said on October 18, 2023, “The Authority wishes to categorically re-iterate that it stands by its advice to the Ministry of Natural Resources and the Government of Guyana that the Cost Bank Adjustment of US$214.4M as reported in the ‘Audit Report Recommendation Final’ by IHS Markit is the accepted final figure.” Statia also made it clear that its correspondence to IHS Markit, seeking clarity to the said “Audit Report Recommendation Final” and copied to EMGL should in “no way or form” be construed as a change in the Authority’s position that the Cost Bank Adjustment of US$214.4M be adjusted, nor to re-open the process.

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• Environmental Impact Assessment, ExxonMobil, flights, helicopter, project

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