Review of Yellowtail Field Development Plan to wrap up by March – VP Jagdeo

– says when all criteria met, licence would be awarded

The review of oil giant ExxonMobil’s Yellowtail Field Development Plan (FDP) is expected to be completed by next month, after which the licence would be awarded once all the criteria have been met.
Vice President Bharrat Jagdeo pointed out, during a recent press conference, that while it was anticipated that the review would be completed by 2021, there were some setbacks. Nevertheless, a draft licence has already been crafted as authorities await completion of the assessment.
The Yellowtail development, which will be oil giant ExxonMobil’s fourth development in Guyana’s waters, would turn out to be the single largest development so far in terms of daily production, with a mammoth 250,000 barrels per day targeted.
“On the review of Yellowtail, there was an expectation that would be done by the end of the year. We’ve had some setbacks. We’ve been working more, so we’re anticipating the completion of everything by the end of March latest. So, we have some consultancies in place, and the Ministry has been reviewing. They have a draft licence. There’s a parallel process at the EPA, and we anticipate that, by that period, the review will be completed and the licence issued,” the Vice President pointed out.
Natural Resources Minister Vickram Bharrat, during his budget speech, told the National Assembly that in order to safeguard the environment and reap the intended benefits from this new field, two international consultancy firms are involved in the process.
“I want to say that we’re not taking things lightly. As a Government, we have already engaged two different sets of international consultants so that they review the field development plan for Yellowtail and to ensure that, once a licence is granted, it brings additional benefits to the people of Guyana.”
According to the Requests for Proposals (RFP) issued by the Ministry of Natural Resources, the consultant being sought to review and evaluate the FDP would have to review not only the FDP, but also all supporting and reference documents, as well as the environmental and social impact assessments (ESIA) submitted by Exxon and its joint venture (JV) partners in the block.
It is expected that the consultant’s assessment would address compliance, or lack thereof, with the existing Petroleum (Exploration and Production) Act 1986 and the Environmental Protection Act 1996, the Petroleum Agreement.
It is also expected that the assessment would evaluate the compliance of Yellowtail to international best practices and industry standards, while pointing out unresolved issues and areas where additional assessments should be done by Exxon before the FDP is approved. And with an existing no-flaring policy having been put in place by the Government, the consultant is expected to also evaluate the FDP in that context.
Back in November 2021, Environmental Protection Agency (EPA) Executive Director Kemraj Parsaram had announced his agency’s plans to put the Yellowtail FDP through a rigorous process before approval, including bringing on an independent expert to review the plan.
Exxon already has approval from EPA for three other projects: the Liza 1, which is producing oil, and the Liza 2 and Payara developments. Yellowtail has an anticipated start date of late 2025, pending governmental approvals and project sanctioning.
ExxonMobil has said it anticipates that at least six projects offshore Guyana would be online by 2027, with developmental drilling recently starting on the second one, the Liza Phase 2 project.
Back in May 2019, EEPGL was granted approval by the Environmental Protection Agency (EPA) to go ahead with its Liza Phase 2 Development offshore Guyana.
The oil company had said the project would have the capacity to produce 220,000 barrels of oil per day. Exxon had also revealed that the Liza Phase 2 development was funded at the cost of some US$6B, including a lease capitalisation cost of approximately $1.6 billion for the Liza Utility FPSO vessel.
For the Phase 2 Development, six drill centres were planned, along with approximately 30 wells – 15 productions, nine water injection and six gas injection wells.
The US$9 billion Payara development, the third development, will meanwhile target an estimated resource base of about 600 million oil equivalent barrels, and was at one point considered the largest single planned investment in the history of Guyana.