ExxonMobil says it can take its money elsewhere if Payara plan not approved soon
ExxonMobil can take its money elsewhere if it the Payara plan, its third development project, is not approved in a timely manner, the company’s Guyana country manager Alistair Routledge said Wednesday.
“The Guyana portfolio is one of the better opportunities for us in the ExxonMobil portfolio, but it’s not the only one.
“And, indeed, if we don’t get the agreement as we are looking for in Payara, the investment money will go elsewhere in ExxonMobil’s portfolio,” Routledge told a group of reporters via online conference.
The new PPP Government has brought in a team, led by a Canadian expert to review the Payara development plan and the Environmental Impact Assessment.
The Payara development plan includes a floating production, storage and offloading (FPSO) vessel, named Prosperity; it is expected to produce 220,000 barrels per day.
The development is similar to that of Liza phase 1 and 2, Payara will have up to 45 wells, including production wells, water injection wells and gas injection wells.
It was expected to start up as early as 2023 and the new ExxonMobil Country Manager hopes the contract could be wrapped in September to keep the project on course.
“We have a new government and understandably they want to make sure that the work that’s been done is to the highest standard.
“So they have brought in an international expert to review the work of the EPA and the Department of Energy.
“We have not met with that expert, the expert is reviewing the work and communicating directly with the government, not with us,” Routledge stated.
He, however, stated that the company is in direct communication with the new government.
“I am pleased to say that the dialogue is constructive, obviously they have certain things they are looking for.
“We are, I believe, very much aligned in wanting to seek to protect the environment, do things safely and deliver the highest possible value to the country. If all of those are working then ExxonMobil and its partners will do well and we will be happy with the development.”
According to Routledge, the government has said that they will review the oil contracts, but they are not seeking to negotiate the contracts.
“…and I think that is really important for the country for the long term because internationally, contract sanctity is very important to all oil companies,” he stated.
He added: “If we enter into contracts in a country and those are changed down the road, then it’s very difficult for us to make commitment on projects that typically have 20-30 year investment life. So how can we make those investments if we are unsure whether the terms are changed?
“So I do think it is important that everybody understand that sanctity of contract is important to the long term investment of not just ExxonMobil but any other investor considering coming into the country.”
He said he did not believe that the oil contracts are more in favour of Exxon than it is for the country, saying he believes the interests of both parties are aligned.
“If the contract was more challenging to us then to be honest I don’t think in this environment that investment dollars would be coming to Guyana.
“It is a global business, and especially in these days when commodity prices have fallen, the investment dollar will flow to where it is competitive.”
