Govt ongoing Payara review from Dec 2019 to be reviewed by int’l oil experts

…to protect Guyanese interests

The Natural Resources Ministry on Saturday announced the review of the Esso Exploration and Production Guyana Limited’s (EEPGL) Payara contract which will be undertaken by a team headed by former Premier of Alberta, Alison Redford, QC.

The current review has been undertaken by the Department of Energy for more than seven months.
The Department contracted Bayphase Oil and Gas Consultants at a sum of US$386,830 which commenced on December 27, 2019.
There was a first contract extension (no cost) to July 27, 2020, and 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 Bayphase Oil and Gas Consultants will be completed shortly.
The PPP/C Government, however, has decided to review the work already undertaken by the Department of Energy so that the interest of all Guyanese is protected and in keeping with international transparency and accountability standards prior to approval being given.
It will be important to have a team of technical experts to assess progress to date and to assist the Ministry, where necessary, to successfully conclude the permitting exercise.
As such, this will require coordination on ensuring that regulations are complied with and that they can be enforced.  This will include environmental standards and reservoir management which is about managing how resources are developed to ensure that the interests of the people of Guyana and their resources are developed in a sustainable and responsible manner to the benefit of the country.
On Saturday, Minister of Natural Resources Vickram Bharrat met with the independent Canadian consultant along with the heads of relevant agencies including Dr Mark Bynoe – Department of Energy, Dr Vincent Adams – Environmental Protection Agency (EPA), and Newell Dennison – Guyana Geology and Mines Commission (GGMC).
However, in addition to Redford, the team comprises former Deputy Minister of Energy in Newfoundland, Canada; senior international reservoir engineers and Jay Park, Managing Partner of Park Energy Law based in Canada and the United Kingdom.
Redford has also worked with other groups around the world to conduct similar reviews in nature.
Redford has served as a World Bank Advisor on Gas Sector Reform in Pakistan and Afghanistan and 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.
Redford served as Attorney General of Alberta from 2008 to 2011 and as Premier from 2011 to 2014, overseeing the legislative, policy, political and financial operations of the Province with a CDN$40 billion (balanced) budget, including, oversight of the Province’s sovereign wealth fund, international trade and pipeline policy (particularly with Washington, China and India), environmental sustainability (including climate change policy in the conventional and unconventional energy sectors, renewable energy strategies and the development of green energy sources to contribute to international climate goals and priorities.
She has worked on several bilateral and multilateral projects particularly in the energy sector regulation and has worked in multiple countries on behalf of the United Nations, the Commonwealth and the European Union.
Redford, through a World Bank project, supported Pakistan Upstream Regulatory Reform as Advisor to the Ministry of Petroleum and Natural Gas on efficiencies in the gas sector, including regulatory and infrastructure reform and review of investment strategies for international oil companies, and worked with a team to draft the Pakistan Petroleum Exploration and Production Regulatory Authority legislation.
As Attorney General, she was responsible for oversight on all energy sector transactions including conventional oil and gas production and the oil sands, including leading the renegotiation of the Great Canadian Oil Sands/Syncrude Agreement on behalf of the Government of Alberta, while simultaneously advocating for integrated community engagement and stakeholder development in regulated industries, particularly in the context of climate change policy addressing both economic and social policy to mitigate long term technical risk in volatile policy environments
Meanwhile, it must be emphasised that while this is a limited reflection of Redford and her team’s skills and capacity-building abilities, they also have vast knowledge in the field of policies and legal framework that supports accountability and transparency within the petroleum sector.
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.
But with approval of the development plan delayed, the company and other industry experts have warned that Guyana could end up losing billions the longer approval is delayed.
Exxon Senior Vice President Neil Chapman had warned recently that they cannot move forward with 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.
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.