-Natural resources minister says decision will only be made once Gov’t is satisfied

By Navendra Seoraj

(Guyana Chronicle) In a bid to ensure that Guyana gets the best deal for its oil wealth, the new government has undertaken a review of Esso Exploration and Production Guyana Limited’s (EEPGL) Payara contract and will engage two sets of consultants before a decision is made on the way forward.
The Payara development project, located in the eastern half of the Stabroek Block, will see the drilling of up to 45 development wells which could take up to five years, with initial production previously set for early 2023.

“The Payara contract is attracting our attention right now because there is a timeline… the previous administration had dragged their feet on it and then they fought to stay in government… so now we are pushed to a position where we have limited time to do this, but we want to be comfortable with the contract,” said Minister of Natural Resources, Vickram Bharrat during an exclusive interview with the Guyana Chronicle, on Monday.

Government aims to be comfortable in the sense that Guyanese must benefit or get what they deserve from the Payara contract, said Minister Bharrat.
Judging from the history of previous contracts, which critics believe shortchanged Guyana, it is imperative that a better contract be negotiated so that the country can derive the full or adequate benefits for its valuable resource.

Under the existing Production Sharing Agreement (PSA) with ExxonMobil, which governs the Stabroek Block, Guyana will be receiving, at a minimum, two per cent royalty on all oil produced in the block, plus 12.5 per cent profit oil.

“We know the history of previous contracts and we are trying to avoid that… consultants are working right now, and we have other people who would look at it so that we are satisfied that it falls in line with our policies and our manifesto promises to the people,” said Minister Bharrat.

Stabroek News had reported that President Irfaan Ali is lobbying for technical and financial support to have an international expert review Exxon’s Payara project and advise on the way forward. Government, Ali disclosed, has approached Canada for assistance in finding a suitably qualified person to fill the spot.

Back in May, Chairman and Chief Executive Officer of ExxonMobil Corporation, Darren Woods, had told investors on the company’s Q1 earnings call: “Unfortunately, the ongoing elections process and uncertainty around the next administration have slowed Government approvals of the Payara Development Plan.”

Approving or discussing Field Development Plans require the signature of a minister, and that was virtually impossible, as the country was still awaiting the results of the March 2 General and Regional Elections, which ended on August 2, 2020.

It was the hope that by the time Guyana resolved its electoral impasse, the process can move full speed ahead towards completion.
EEPGL, a subsidiary of ExxonMobil, is the operator of Stabroek Block and holds 45 per cent interest. Meanwhile, Back in September 2019, EEPGL also submitted its Environmental Impact Assessment (EIA) on the Payara Development Project to the Environmental Protection Agency (EPA).
The project marks EEPGL’s third field development in the Stabroek block and targets 180,000 to 220,000 barrels of oil per day, with anticipation to produce approximately 5,700,000 to 6,600,000 barrels of crude oil per month.

A third Floating Production, Storage, and Offloading (FPSO) vessel will be used during production which would be named ‘Prosperity’.
Guyana has already received US$8.6M in oil and gas royalties and over US$90 million from the sale of crude, which is being produced by EEPGL’s Liza phase 1 development.
ExxonMobil is now firmly established in Guyana, operating an office in Georgetown, with numerous ongoing exploration and development operations offshore. ExxonMobil Guyana has made 16 discoveries since May 2015 and began production in December 2019 from the Liza Phase 1 development project.
The company is the operator of the Stabroek, Canje and Kaieteur Blocks offshore Guyana. Since 2015, ExxonMobil has increased its estimated recoverable resource base in Guyana to more than 8 billion oil-equivalent barrels.