Private Sector lauds approval of Exxon’s Yellowtail Project
Two Private Sector bodies – the Private Sector Commission (PSC) and the Guyana Oil and Gas Energy Chamber (GOGEC) – have lauded the Guyana Government’s approval of the Yellowtail Development Project, which will be United States oil giant ExxonMobil’s fourth offshore development in the oil-rich Stabroek Block.
On Friday, Government signed the Petroleum Production Licence (PPL) for the Yellowtail Project with Exxon’s local affiliate, Esso Exploration and Production Guyana Limited (EEPGL). Additionally, the Environmental Protection Agency also announced its approval of the Environmental Permit for the project.
On Saturday, the PSC welcomed the move and congratulated EEPGL, which is one of its corporate members.
The Commission said it was especially pleased that the approval comes after extensive public consultation and review by the EPA as well as recommendations from the team of independent international experts and the Environmental Assessment Board which declared the revised Environmental Impact Statement (EIS) acceptable.
“The Commission believes that this latest development will see an increase in production which translates to the expansion of the economy, provision of revenues to execute massive developmental projects thereby creating jobs for Guyanese and accelerating Private Sector growth,” it stated.
Moreover, the PSC also expressed satisfaction with the oil spill response and financial assurance provision in the permit which requires EEPGL to procure a capping stack to be maintained, tested and stored in Guyana as this will ensure that operators are in a state of readiness to cap any well in the event of a disaster.
“Further, the Commission appreciates the fact that the Financial Assurance provision holds EEPGL liable for all costs associated with clean up, restoration and compensation for any pollution damage which may occur as consequence of the Yellowtail Development Project,” the Private Sector body stated.
It was also pleased to see the issue of routine flaring incorporated into the permit with specific detail. The PSC, however, said it wants to see an effective contingency plan put in place, such as having a spare compressor on hand to address any mechanical failure that may occur in the future that will limit flaring to the approved limits as specified in the permit.
Meanwhile, President of the Guyana Oil & Gas Energy Chamber, Manniram Prashad also commended the President Irfaan Ali-led Government for the swift approval of ExxonMobil’s Yellowtail licence.
He recalled that Vice President Bharat Jagdeo, during one of his press conferences earlier this year had acknowledged that there were some setbacks regarding the approval which was originally scheduled to be in December of 2021 but nonetheless promised to have this approved by the end of March 2022.
“Therefore, GOGEC is pleased to see that this revised deadline was met,” the missive detailed.
“GOGEC fully supports the Government’s objective to accelerate the country’s oil and gas production as quickly as practicably possible so as to cash in on the relatively high oil prices into the foreseeable future. In doing so, this would aid greatly in advancing Guyana’s rapid economic transformation and development for the benefit of the people and the country at large – that is to say, for both the current and future generations to enjoy these anticipated benefits,” Prashad posited.
The Yellowtail Development Project is set to commence production in 2025 using the “One Guyana” Floating Production, Storage and Offloading (FPSO) vessel, which will yield the largest target of 250,000 barrels of oil per day (bpd) during a 20-year period that will generate at least 1300 direct jobs.
Yellowtail, which will be located 126 miles offshore Guyana, includes up to three drill ships drilling up to 67 wells, the FPSO vessel and SURF production system, with tankers taking the oil to global markets.
The US$10 billion development project will target an estimated resource base of about 900 million oil-equivalent barrels and would be the largest single investment in the history of Guyana’s petroleum sector.
ExxonMobil has said it anticipates at least six projects offshore Guyana in the Stabroek Block, which contains a recoverable resource estimate of over 10 billion barrels of oil-equivalent.
The US oil major started production in December 2019 at its first Development – Liza Phase One site, where Guyana has earned US$607.6 million from a total of nine oil lifts by the end of 2021 and another US$95 million from its first lift this year from the Liza DestinyFPSO.
Meanwhile, with the Liza Unity FPSO at the Liza Phase Two Development commencing production in February, oil lifts from the Stabroek Block are expected to increase.
In addition to these two projects, Exxon is also on track with its third development, Payara, for a 2024 start-up.
ExxonMobil is the majority operator in the Stabroek Block with co-venturers, Hess Guyana Exploration Ltd and CNOOC Petroleum Guyana Ltd. (G8)