Exxon says elections uncertainty slows approval for 3rd development; Gov’t says it’s not just that

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Oil giant ExxonMobil has said the ongoing elections process here has slowed approvals for its third development project, which would ramp up oil production to 750,000 barrels of oil per day once it gets going; but on Monday, the Government said it is not just the “elections furor.”

“Unfortunately, the ongoing election process and uncertainty around the next administration has slowed Government approvals of the Payara development plan,” said Darren W. Woods Exxon Mobil Corporation Chairman and Chief Executive Officer during an earnings call last Friday.

“In addition, the challenge of rotating crews due to the impact of COVID-19 has temporarily slowed our drilling campaign.

“As a result, we expect a delay in our future developments of roughly 6 to 12 months, pushing our production objective of more than 750,000 barrels per day into 2026,” Woods added.

But at a virtual press conference Monday, Director of the Department of Energy, Dr Mark Bynoe said that the approvals have been slowed also because the Department had asked Esso Exploration & Production Guyana Limited –ExxonMobil’s subsidiary –to address several concerns in its Payara Field Development Plan (FDP) to pave the way for an approval when a legitimate Government is in place.

“…I could not expose my Minister at this point in time to a process that is incomplete,” Dr Bynoe noted, explaining that the Department has since made several recommendations to the company for improvements.

Director of the Department of Energy, Dr Mark Bynoe

“So in large measure we have provided them with a list of matters to be addressed before we can consider further the issue of the Payara potential or possible approval, so that, is not just a case of politics, it is also a case of there are some other improvements to be made for the field development report to be made, Dr. Bynoe noted.

The Energy Director did not disclose what those issues are, saying he believes doing so will be unfair to the operator.

However, he admitted that the final approval will be made until a new Government is in place.

“We continue to work through the process as we align what needs to be aligned so by the time the political furor is sorted, we can be able to take it forward to say one way or the other, what the course of action auto be,” Dr. Bynoe said.

Meanwhile, the ExxonMobil chairman said Guyana remains an integral part of its long-term growth plans and as such is a high priority.

He said the current Liza Phase 1 operations have been largely unaffected by the COVId-19 pandemic and that production ramp-up is progressing and should reach full capacity in the second quarter; it is estimated to produce 120,000 barrels of oil per day.

The Payara discovery –Exxon’s second oil discovery in the Stabroek Block was announced in January 2017.  In July 2017, the US oil major announced it has discovered additional oil in the Payara reservoir increasing the total Payara discovery to approximately 500 million oil-equivalent barrels.

The Payara FDP was submitted in September. It includes a floating production, storage and offloading (FPSO) vessel, named Prosperity which is expected to produce 220,000 barrels per day.

The Payara with up to 45 wells –including production wells, water injection wells and gas injection wells –is similar to that of Liza phase 1 and 2.

The Government commenced a review of the FDP for the Payara project in December 2019.

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