In a key oil sector decision, President Irfaan Ali last evening said that his government is lobbying for technical and financial support to have an international expert review Exxon’s Payara project and advise on the way forward.
Government, Ali disclosed, has approached Canada for assistance in finding a suitably qualified person to fill the spot.
And while ExxonMobil is pressing for a deadline to have its permits approved to make its own Financial Investment Decision on the project by this month, it will have to await the advice of the oil & gas expert. Payara will be Exxon’s third producing well after Liza-1 which is currently in production and Liza-2 which is in the works.
“Specifically to the Payara licence, I have asked the Vice President [Bharrat Jagdeo] and convened a meeting with various stakeholders, and I have made it very clear that we will have a review of what has been done so far. So we are in the process of engaging an international expert to do that review of the work done so far,” Ali last evening told Stabroek News, on the sidelines of his attendance of the celebration of Krishna Janmashtami at the Crane Hare Krishna Temple.
“We haven’t identified the person, what we have to do is secure the financing. See where financing is. There is a lot of technical assistance in the sector. We approached the Canadian High Commission, for example, for help in relation to getting someone. So that is where we are,” he outlined.
Late last month, ExxonMobil announced that it is maintaining its capital expenditure here but wants a quick approval of its third well, Payara, while warning that delays could cost Guyana significantly.
The longer the permits take to be approved, according to company president Neil Chapman, the more this country stands to lose.
“It is very simple, everything we and the partners can do to progress Payara on schedule, we are doing and we have done. I have said to our organization many times, we need to be ready to move when the government is ready and we are ready. We are ready to FID (Final Investment Decision) this project but we need an approved development plan and that approved development plan needs to come from the government,” Chapman told his company’s second quarter earning call, two days before Ali was declared President that ended a five-month political impasse. The ExxonMobil President was at the time responding to the Bank of America’s Doug Leggate on what he was “signalling” in terms of the risk or the potential for delay of the Payara project.
“Of course we are waiting for a resolution like everybody else of the election and I think you are very familiar with what happened down there. There was a vote there was a recount and then there was a series of legal actions… (What) we know is that all parties in Guyana want to progress this development. Of course we are in regular contact with President (David) Granger and the APNU+AFC coalition and we are also in discussion with the PPP and (Bharrat) Jagdeo and Irfaan Ali. What we continue to stress to the government is that if the project gets delayed, it is a loss of value to the country and they understand that. It is very, very clear. The government understands, the Ministry of Energy understands,” he added.
And along with developmental setbacks, Chapman reasoned, other factors should be taken into the matrix since weather conditions are also critical when planning for offshore works.
“It is important we get this development plan so we can FID in the September timeframe. There are weather conditions, if you miss a certain window, it can result in delay of some months. And that is what we are trying to work towards,” he said.
But Chapman remains confident that there would soon be a resolution to the situation. “I am confident this will get resolved but we need that approval of (the) development plan,” he said while pointing out that by August would be ideal for a decision.
‘Full assessment’
Ali maintained yesterday that any decisions will have to wait until a thorough assessment of the project is made, and government is convinced that it serves the best interests of the Guyanese people, while still beneficial to the investor.
“We are in government just over a week now and I have asked for a full assessment of all the sectors, not only the oil and gas sector. So we have been receiving documents from all… including work that has been done so far in terms of licence for the Payara project. Having said that, throughout the campaign I had made it very clear that we have to review things,” he said.
“I have been following what is happening from the media, where there is a lot of focus on the oil and gas sector, rightfully so,” he added.
Today Vice President Jagdeo, according to Ally, will elaborate more on plans being made for the oil & gas sector, along with other issues. “What I can tell you is that we have asked for this review and we have to await the work from that review,” he stressed.
Local content
And passionate about the local content issue and ensuring that work is done in a way that this country is not long-term dependent on the skillsets for its new industry, as promised during the elections campaign, the President said that he has asked for former Trinidad and Tobago local content consultant Anthony Paul to assist.
“We are sticking to our commitment to ensuring that the industry, as far as possible, provides the possibility locals and the local private sector and in the diaspora wherever the local skillset is,” he said.
“I have seen over the last few months Anthony Paul brief the media… so I have also asked the Vice President to make contact with Mr. Anthony Paul, and to see his availability and whether he will come and work with us on the local content policy. All of this is critical in moving forward,” Ali said.
The David Granger APNU+AFC administration has come in for strong criticism for its local content policy draft that it paid Dr Michael Warner US$104,500 to do.
Although the administration had assured that its “fit for purpose” local content policy when completed would have “considerable focus” on capacity development, many critics differed. They included members of the private sector and civil society.
