Govt to engage oil majors on use of renewable energy, green hydrogen

…to lower carbon emissions during oil exploration & production

The People’s Progressive Party/Civic (PPP/C) Government has assured that they will continue to have talks with oil companies operating in Guyana’s waters, so that they can incorporate more use of renewable energy and, if possible, green hydrogen during their exploration for and production of oil.
This assurance was given in the Government’s Energy Brief for February 2023. In it, the Government referenced their carbon credentials and also noted that the Government will continue seeking ways in which emissions can be reduced during oil exploration.

“The Government implemented one of the very few taxes on flaring in the world – where beyond the commissioning period, all flaring is taxed at US$45 per tonne of carbon. The PPP/C Government will continue dialogue with oil producers.”
“To ensure that, alongside the above measures, exploration and production operations continue to explore all possibilities for lower carbon technological innovation – including the use of renewable energy in oil production, Carbon Capture Utilization and Storage (CCUS) and, – when technologically viable – green hydrogen,” the Government stated in the brief.
Green hydrogen is the use of water as a renewable energy source, by electrolysis of water. Even now, interest in green hydrogen continues to gain traction on the world stage, with talk of its application in the oil and gas sector.
It was pointed out in the energy brief that for 2019 alone, 50 of the largest economies in the world – which account for 80 per cent of global greenhouse gas emissions – increased their support for fossil fuel production by 30 per cent, with total support reaching US$178 billion. Further, the brief pointed out that most of this was in developed countries who are members of the Organisation for Economic Cooperation and Development (OECD).
“The Government of Guyana therefore supports calls for the elimination of such fossil fuel subsidies, especially in OECD countries where subsidies are the most distorting. This will lead to the breakup of the current monopoly-like situation, and the stabilising of price levels. Combined, these two policies can drive the most carbon intensive and least economically-rational oil and gas out of the market.”
“Enabling the remaining post-2050 supply of oil to be the lowest carbon and most economically efficient. At the same time, to drive down carbon intensity further and remain relevant in a Paris Climate Agreement-compatible oil market, Guyana will significantly increase domestic policy measures,” the brief further explained.
As the world’s fastest-growing super basin in recent years, Guyana is estimated to have potential resources in excess of 25 billion barrels offshore. In the oil-rich Stabroek Block alone, which is operated by ExxonMobil and its co-venturers, there are nearly 11 billion barrels of oil equivalent.
To date, there have been some 35 discoveries in the Stabroek Block, where production activities have been ongoing since 2015, and a total of 40 oil finds for all blocks being explored offshore Guyana. Currently, the Liza phase 1 and phase 2 developments in the Stabroek Block are operating at a combined gross production capacity of more than 360,000 barrels of oil per day (bpd) using the Liza Destiny and Liza Unity floating production, storage and offloading (FPSO) vessels, respectively.
The third development in the Stabroek Block – Payara – is on track to come online by the end of 2023 with a gross production capacity of approximately 220,000 bpd. While this may be the gross production capacity, it is expected that the start-up will see a much small number of oil barrels being produced. For instance, when the Liza phase two started in 2022, it was producing significantly less than its current production.
Meanwhile the Yellowtail – the fourth development – is slated for 2025 with a production capacity of some 250,000 bpd. Both these development projects have been approved by the Guyana Government.
Uaru is the fifth development and is expected to come online at the end of 2026 with a gross production capacity of approximately 250,000 bpd with first oil anticipated at the end of 2026. The development plan for Uaru was submitted for Government approval in November 2022 and final approval is expected by the end of the first quarter of this year. ExxonMobil has said it anticipates at least six projects offshore Guyana will be online by 2027. (G3)