Permit mandates quarterly reports from Exxon on gas, other resources in Uaru project
– licensee to also conduct gas utilisation study
ExxonMobil received approval for Uaru, its fifth project in Guyana’s waters, only last week and according to the terms set out in the production permit for the project, the company’s obligations include quarterly reports to be submitted to the Natural Resources Ministry on the project’s gas and other resource reserves.
According to the permit, the licensee is mandated to submit quarterly resource and reserve reports to the Natural Resources Minister, Vickram Bharrat, stating the amount of resources of a commercial value within the project, in a similar manner to the permit for the fourth project.
Natural Resources Minister Vickram Bharrat hands over the signed petroleum production licence for Uaru to Exxon Guyana President 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
This includes oil, gas, and natural gas liquids, and “all such reports will be developed in accordance with and to the standards set by the Petroleum Resources Management System (PRMS),” the permit says.
The operator will also have to cooperate with Government inspections of these reserves when these statements are audited. Such cooperation includes providing reasonable access to data. Additionally, the operator must procure an independent, third-party assessment of these resources three years following the date of the first oil at Uaru, which Exxon has said could be as early as 2026.
Provision is also made for a gas utilisation study to be conducted on the available gas and non-associated gas in the Uaru project. The study will consider potential gas production for export, scenarios for the expected local, regional, and international demand for gas, as well as the feasibility of exporting Liquid Natural Gas (LNG) and Liquid Petroleum Gas (LPG).
This gas utilisation study is in addition to Article 12 (b) of the Petroleum Agreement which states that “based on the principle of full utilisation of the associated gas and with no impediment to normal production of crude oil, a plan of utilisation of the associated gas shall be included in the development plan of each oil field.”
The monetisation of Guyana’s vast gas reserves has previously been described by the Government as the next wave of economic opportunity for Guyana, seeing as the country has some 17 trillion cubic feet of associated gas.
Work has been progressing on a gas utilisation strategy, which President Dr Irfaan Ali has said will help to open up new opportunities for trade and energy security between Guyana and its bilateral partners.
The President had also said this year that if the natural gas reserves of Guyana, Trinidad and Tobago and Suriname are developed to their full potential, these countries could supply the regional electricity needs for a century.
Guyana is currently in talks with a number of countries on an energy corridor, and a regional energy strategy is being crafted. The countries expected to participate in that strategy include Guyana, Suriname, Trinidad and Tobago, Brazil, and even Barbados, which has natural gas potential.
The first time President Ali spoke of Trinidad’s interest in the energy corridor initiative was back in June 2022, at the Suriname Energy, Oil & Gas Summit & Exhibition, when he had disclosed that a regional energy strategy that would connect the oil and natural gas producers in the Region is being crafted.
Meanwhile, Guyana is already developing an integrated Natural Gas Liquid (NGL) plant and a 300-megawatt (MW) combined cycle power plant at Wales, West Bank Demerara (WBD), as part of the gas-to-energy project.
The project will see ExxonMobil piping gas from the Liza Field in the Stabroek Block onshore at Wales via a pipeline that it will procure, install and maintain. Based on studies conducted, ExxonMobil would be able to produce up to 50 million cubic feet of gas per day for this initiative without impacting oil production activities offshore.
The operationalisation of the gas-to-energy project is expected to result in current electricity charges being cut in half, which would fuel the expansion of the industrial and commercial sectors.
With a timetable to deliver rich gas to fuel the power plant by the end of 2024 and the NGL plant to be online by 2025, works are progressing on getting the gas-to-energy project off the ground.
