— hailed as largest single investment to date
— project conforms to international best standards, environmental safeguards, says EPA

THE government and Esso Exploration and Production Guyana Limited (EEPGL) on Friday signed the Petroleum Production Licence (PPL) for the Yellowtail offshore development in the Stabroek Block offshore Guyana.

The Yellowtail project approval was a result of extensive reviews done by local and international experts, a statement from the Ministry of Natural Resources said.

Prior to the approval, the Government of Guyana had contracted Bayphase Oil and Gas Consultants and the Redford Group headed by Alison Redford and a team of technical experts to review the Yellowtail Development Plan, in keeping with internationally recognised standards within the oil-and-gas industry.

“Most importantly, the team of technical experts assessed the project to ensure that all relevant regulations are complied with and that they can be enforced.  This included environmental standards and reservoir management for the sustainable and responsible operation of the project, in conformity with the best international standards and environmental safeguards associated with a project of such magnitude,” the statement noted.

Natural Resources Minister Vickram Bharrat stated that the government and its regulatory agencies are satisfied with all the reviews and long hours invested by both local and international experts to finally have a licensing agreement for the Yellowtail Project, which will benefit all Guyanese realising the ‘One Guyana’ vision.

The Natural Resources Ministry said this project will build on the recently sanctioned local content legislation for each stage of the project as it relates to workforce development, supplier development and overall strategic investment.

The Government of Guyana remains committed to managing and extracting Guyana’s oil-and-gas resources sustainably, in keeping with internationally recognised acceptable environmental standards and transparency, the ministry added.

“The project in the Stabroek Block is expected to produce up to 250,000 barrels of oil per day after startup in late 2025, using the ‘One Guyana’ Floating Production, Storage and Offloading (FPSO) vessel.  The US$10 billion development project will target an estimated resource base of about 900 million oil-equivalent barrels and this is now the largest single investment in the history of Guyana,” the statement from the Natural Resources Ministry disclosed.

COMMENDATION
Meanwhile, President of the Guyana Oil and Gas Energy Chamber (GOGEC), Manniram Prashad has congratulated and commended, President Dr Mohamed Irfaan Ali and his government for the swift approval of ExxonMobil’s Yellowtail licence.

Vice-President Dr. Bharat Jagdeo, at one of his press conference earlier this year acknowledged that there were some setbacks regarding the approval which was originally scheduled to be in December of 2021.
However, the Vice-President did promise to have this approved by the end of March 2022. GOGEC is pleased to see that this revised deadline was met, a release from the chamber said.

“The Yellowtail Project is the fourth petroleum development project to have been permitted in the Stabroek Block, which is scheduled to commence production by 2025, thereby ramping up our production level to some 800,000 barrels per day.

“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,” the release noted.

The Environmental Protection Agency (EPA) in a release, also on Friday confirmed its approval of the Yellowtail Development Project.

“An environmental permit was granted for a period of five years to Esso Exploration and Production Guyana Limited (EEPGL) to undertake the construction and operation of production facilities, within the Stabroek Block, offshore Guyana,” the EPA said.

This approval and granting of the permit follow the provisions of the Environmental Protection Act Cap 20:05, the agency added.

Following a series of public consultations and recommendations provided by international experts and the Environmental Assessment Board (EAB), the EAB reviewed and declared the revised Environmental Impact Statement (EIS) “acceptable and provided recommendations for EPA’s approval as part of the environmental permit.”

Yellowtail is the fourth petroleum development project to have been permitted in the Stabroek Block.

“The permit, as it is commonly known, comprehensively addressed all environmental and social safeguards that are reasonably necessary to protect human health and the environment, including implied conditions as provided for in section 13 of the EP Act,” the EPA said.

FLARING
The EPA reported that like its predecessors, the permit strictly prohibits routine flaring and venting, and specifies that flaring is only permissible during commissioning, start-up and special circumstances.
“The permit also goes further to maintain payments in instances where flaring is conducted beyond permitted durations,” the body said.

OIL SPILL RESPONSE AND FINANCIAL ASSURANCE
Additionally, the EPA said the permit requires EEPGL to procure a ‘capping stack’ to be maintained, tested, and stored in Guyana.
“A capping stack is a large well-closure device that connects to the top of the blowout preventer (BOP) and is capable of sealing off a well.

“It is a form of modern technology (available post the Gulf of Mexico, Macando incident) to cap a well in the event of a loss of well control, and failure of the blowout preventer (BOP),” the release continued.
Additionally, the environmental protection body said EEPGL must maintain access to at least one overseas subscription service, to allow mobilisation of a capping stack to the project location.

“This serves to fortify safety and emergency response efforts since wells would be swiftly capped in the event of a well blow-out,” it said.
“The permit also ensures that EEPGL is held liable for all costs associated with clean up, restoration and compensation for any pollution damage which may occur as consequence of the project.

“EEPGL is also required to have financial assurance which includes a combination of insurance which must ‘cover well control, and/or clean up and third-party liability on terms that are market standard for the type of coverage’, and a parent company/affiliate guarantee agreement which indemnifies and keeps indemnified the EPA and the Government of Guyana in the event EEPGL and its co-venturers fail to meet their environmental obligations under the permit.

“Further, the financial assurance provided must be guided by an estimate of the sum of the reasonably credible costs, expenses, and liabilities that may arise from any breaches of this permit.
“Liabilities are considered to include costs associated with responding to an incident, clean-up and remediation and monitoring,” the EPA statement expounded.

MONITORING
As it relates to monitoring, the EPA said that to ensure EEPGL meets its obligations to prevent and mitigate environmental harm, the permit imposes comprehensive requirements for monitoring and management of any impacts affecting biological, physical, and socio-economic resources within the Area of Influence of the project, including targeted and updated environmental baseline studies.

“The permit also requires EEPGL to submit safety case information, including a risk assessment prior to drilling and development of wells,” the statement further added.

GRIEVANCE MECHANISM
Lastly, the EPA said EEPGL is also enjoined to establish and maintain a grievance mechanism in keeping with the World Bank’s approach to grievance redress in projects, to ensure that complaints from individuals and communities who may be affected by the project are received and addressed.

“There is a requirement for reporting same and what actions were taken to address the grievances to the EPA,” the agency stated.