Govt greenlights Uaru Petroleum Production Licence
One day after the Environmental Protection Agency (EPA) approved Exxon’s Uaru petroleum project and granted the Environmental Permit, the Natural Resources Ministry (MNR) on Friday announced that it has approved the Field Development Plan (FDP) and as such, issued the Petroleum Production Licence (PPL).
The Ministry in a statement related “With support from the petroleum division within the Guyana Geology and Mines Commission (GGMC), worked alongside ExxonMobil Guyana (EM) from May to November 2022. As part of this, various technical and financial scenarios for developing the Snoek, Mako and Uaru reservoirs were presented.”
Natural Resources Minister Vickram Bharrat hands over the signed petroleum production licence for Guyana’s fifth offshore development, Uaru to President of ExxonMobil Guyana, Alistair Routledge in the presence of Production Manager of CNOOC Guyana, Xu Xiangdong (far left) and Hess Corporation’s Vice President of Exploration, Appraisal, and Developments for Guyana-Suriname, Tim Chisholm
Further, it stated that the pre-submission engagements amongst MNR, GGMC, and ExxonMobil were not a pre-approval mechanism but served to optimise alignment with legislative frameworks and international best practices.
The November 1, 2022 submission of the production licence application and accompanying Field Development Plan underwent a rigorous review process by MNR and GGMC staff, supported by an independent consultant procured through the World Bank.
“The FDP review process took over four months while the overall process took over 11 months. The Uaru development benefits from EM’s “Design one, build many” philosophy, which allows for more efficient project implementation by leveraging similarities between black oil projects. The project is expected to produce 812 MBO in the initial twenty-year licence period through a total of 44 wells – 21 producers and 23 water and gas injectors.”
The floating production, storage and offloading (FPSO) vessel, Errea Wittu, which will be built by Japanese FPSO-building and operating company, MODEC, will produce 250 kbd at peak production. First oil is anticipated for the second quarter of 2027, boosting Guyana’s overall production rate to over 1,100,000 barrels of oil per day.
Additionally, MODEC will now compete with SBM Offshore, the Dutch-based company responsible for the first four projects in the Stabroek Block. Notable changes in the FPSO design compared to previous projects include using a combined-cycle gas turbine for power generation and a closed-loop flare system, reducing greenhouse gas emissions from the project.
Certain conditions that are applicable to the Yellowtail project were excluded from the Uaru PPL since they were deemed to have been sufficiently addressed by the Yellowtail licence conditions. Similar to the Payara licence, the Uaru PPL boasts a Unit Development component, covering four of the Uaru field reservoirs that extend into the Liza production area. The reservoirs are not being tapped into by Liza developments and are instead covered by the Uaru licence.
The Uaru project is budgeted to cost US$12.683 billion and it is subject to cost recovery under the Stabroek Block Petroleum Sharing Agreement. The Cost Reporting condition was strengthened to include annual synergy reporting, acknowledging the shared facilities and personnel between these projects that result in cost savings. Additionally, a Capping Stack condition was included in this licence to ensure compliance with the commitment to have the Capping Stack in-country as required by the Yellowtail licence.
In summary, the approval of the Uaru Field Development Plan and issuance of the Uaru Petroleum Production Licence marks the fifth approved production operation for offshore Guyana within the prolific Stabroek Block. The Uaru project is expected to significantly contribute to Guyana’s oil production and highlights the benefits of leveraging similarities between black oil projects.
