Canadian experts scrutinising work of coalition-hired consultant – Minister Bharrat clarifies

Payara review

…says President Ali did not want to blindly sign off on review report

Natural Resources Minister Vickram Bharrat has clarified that the international team of experts recruited by Canada for the People’s Progressive Party/Civic (PPP/C) Government is not actually conducting a review of the Payara Field Development Plan (FDP), but is in fact scrutinising the work done by Bayphase Oil and Gas Consultant – the company initially hired by the A Partnership for National Unity/Alliance For Change (APNU/AFC) coalition since 2019.

The Department of Energy had contracted Bayphase Oil and Gas Consultants at a sum of US$386,830 to review ExxonMobil’s Payara contract – the US oil giant’s third development project – and this process commenced in December 27, 2019. There was a first contract extension (no cost) to July 27, 2020 and then a second contract extension to September 27, 2020 with a revised contract sum of US$429,382 which represents an 11 per cent increase. This review by the Camberley, England-based consultancy firm will be completed shortly.
As such, Minister Bharrat explained the independent team, led by Canadian Queen’s Counsel Alison Redford, are not conducting a total review of the Payara Development Plan, but a review of what was done by Bayphase Oil and Gas.

“We didn’t appoint Bayphase; they were hired under the previous government so why should we take a report that they give to us wholesale and say this is it. We deserve to have an independent re-examination of what Bayphase has done because we weren’t part of it when it started,” he asserted.
According to the Natural Resources Minister, this was done because President Dr Irfaan Ali wanted to be fully satisfied that it is a good contract that will give Guyana maximum benefits.
“The President wants to be satisfied that when he signs this document, that the benefits that derive from this agreement are good for Guyana and we don’t end up with in the same situation as before… The President could’ve easily signed the agreement that Bayphase prepared, because they’re the consultants here over the past seven months carrying out the project. But he doesn’t want to sign an agreement just like that,” the Minister noted.
It is against this background that the new PPP/C Administration approached the Canadian Government for assistance in this regard.
Vice President Bharrat Jagdeo had recently explained that because Cabinet lacks the technical capacity, it tapped into an existing Canadian grant to recruit the independent experts.
Since the announcement that Redford was hired, there has been criticism with industry experts questioning her experience in deep-water developments projects.
But Minister Bharrat contended, “Alison Redford and her team are not doing the review of the Payara project. That is being done by Bayphase Consultant, which was contracted under the previous Administration… They’re just reviewing what Bayphase has done to ensure Guyana gets maximum benefits.”

Redford, who is a former Attorney General and Premier of Alberta, Canada, has worked with other groups around the world to conduct similar reviews in nature.
She has served as a World Bank Advisor on Gas Sector Reform in Pakistan and Afghanistan and in other jurisdictions, as they develop new approaches to upstream regulation, transparency and accountability inclusive of community engagement.
As Premier of Alberta, she introduced the Responsible Energy Development Act, which created the Alberta Energy Regulator. The Act sets out rigorous regulation, compliance, and enforcement provisions on all aspects of oil and gas production, including permits and licenses.
Further, she also developed the Canadian Energy Strategy for Canadian First Ministers and the Transition Energy Initiative for the Conference Board of Canada.

Timelines
Meanwhile, the Natural Resources Minister made it clear that his administration does not want further delay in the project, but wants to ensure that the country benefit from this project. As such, he noted that they are hoping to have the independent team complete their assessment as soon as possible.
Jagdeo had disclosed last week that the team will complete its work by August 24.
According to Minister Bharrat, the two-week old PPP/C Government is cognisant of Exxon’s schedule and timeline for the project. But noted that the five months of political and electoral impasse that the country was embroiled in because of the APNU/AFC have put them at a disadvantage with the loss of valuable time.
With approval of the Payara Development Plan delayed, the company and other industry experts have warned that Guyana could end up losing billions the longer approval is delayed.
In fact, Exxon Senior Vice President Neil Chapman had said recently that they cannot move forward without an approved development plan and the Final Investment Decision (FID). He had said that if it comes in later than September, weather conditions could affect operations, causing Guyana to lose significantly.
ExxonMobil had identified Payara as the third potential development project within the Stabroek Block after Liza Phase 1 and 2. The Payara discovery was announced in January 2017.
The discovery well was drilled in a new reservoir, encountering more than 29 metres of high-quality oil-bearing sandstone reservoirs.
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, supporting up to 45 wells, including production, water injection and gas injection wells.
Last year, Exxon made five discoveries. These discoveries had pushed the total estimated recoverable barrels of oil equivalent to over six billion. It made one discovery for 2020, the Uaru discovery, which was announced in January. Uaru is ExxonMobil’s 16th oil discovery in the Stabroek Block.