Exxon urges swift approval of Payara Development
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ExxonMobil’s Senior Vice-President, Neil Chapman
ExxonMobil’s Senior Vice-President, Neil Chapman

…says Guyana will lose big, project will face ‘months’ of delay

By Lisa Hamilton

EXXONMOBIL has noted that if the Payara Development Project is not approved soon to allow for a Final Investment Decision (FID) at least by September 2020, weather conditions may delay the project further by months.

ExxonMobil’s Senior Vice-President, Neil Chapman, made these remarks at the company’s 2020 Annual Shareholders Meeting on Friday. It was raised that a delay in the resolution to the March 2020 General and Regional Elections is causing the issue as, despite the pandemic, the company has been forging ahead with its developments in Guyana.

At the meeting, the Senior Vice-President nonetheless expressed his confidence that the project will soon receive approval and assured that the political leaders of Guyana understand the importance of facilitating the work of the oil and gas sector.

“We’re continuing to work with the government on approval for the Payara development plan. Without final resolution of the election result and the signing in of a new government, there is a potential for delays to the schedule. Having said that, it’s very clear that all parties in-country understand the importance of progressing the developments quickly given the significant benefits to all stakeholders, especially the citizens of Guyana,” Chapman stated.

In June, the Guyana Chronicle reported that due to the COVID-19 pandemic and pending governmental and regulatory approval, advancements on ExxonMobil’s third and fourth development projects have stalled.

These include the Third Development, the Payara Development Project which has outstanding approval for its Environmental Impact Assessment (EIA) and Field Development Plan; and the Fourth, the Hammerhead Development Project, for which ExxonMobil has paused its provision of the required EIA.

The Payara Development Project is expected to produce a capacity of 220,000 gross barrels of oil per day (bpd) but its deferral has a potential delay in production startup of six to 12 months.

However, the Senior Vice-President remains positive that this development, along with others will not be affected in a drastic way. Furthermore, he stated that ExxonMobil is poised to commence operations at the Development Field the moment it is given the go-ahead by the government.

He stated: “Liza Two is in construction, I’m confident we’ll move on Payara as well…everything we and the partners can do to progress Payara on schedule, we are doing and we’ve done. I’ve said to our organisation many times, we need to be ready to move as soon as the government is ready and we are ready, we’re ready to FID this project but we need an approved development plan and that approved development plan needs to come from the government.”

As it stands on Guyana’s elections, the Elections Commission is expected to meet on Sunday to discuss the next steps towards making an elections declaration. This meeting of the commission comes following several court battles before and after a national recount. Altogether, the elections have dragged on for approximately five months.

Chapman said that many are well aware of the situation in Guyana and ExxonMobil is limited to the extent and understands that it must wait on the elections to be completed before progress on its projects can recommence.

“We’re waiting for the resolution, like everybody else, of the election and I think you’re very familiar with what happened down there. There was a vote, there was the recount and then there’s been a series of legal action that has taken place since that time. What we know, is that all parties in Guyana want to progress this development. Of course, we’re in regular contact with both President Granger of the APNU+AFC coalition and we’re also in discussion with the PPP/C and Irfaan Ali. What we continue to stress to the government is that, if the project does get delayed it’s a loss of value to the country and they understand that. It’s very, very clear. The Department of Energy understands that,” he said.

The Senior Vice-President noted that it is very important that the Development Plan is approved for a Final Investment Decision (FID) by a September 2020 timeline because there are weather conditions whereby if a certain window is missed it could result in months of delays.

Chapman said: “I’m confident this’ll get resolved but we need that approval of the development plan and that’s what governments have to do and obviously we’ll work with them, as I said, we’re ready to go.”

Apart from matters relating to Payara, Chapman reported that Liza Phase Two remains on schedule for start-up in 2022 and, while Liza Phase One experienced low production capacity in the second quarter due to mechanical issues, full capacity with a 100 per cent gas injection in is expected in August.

Added to this, the company noted that it is still actively investing for the future in Guyana with four drilling rigs as of the end of June with one on exploration and three on appraisal and project development drilling.

Just recently, it was also announced that finds of “high quality reservoirs” were made at Yellowtail-Two further cementing confidence in the “world class quality” of the Guyana basin.

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