Minister of Natural Resources Vickram Bharrat says that US Secretary of State Michael Pompeo’s visit this week is in no way tied to permits being processed for ExxonMobil’s Payara well and that the US oil major must meet the necessary requirements and environmental standards before any approval is granted.
And while a second draft of terms of agreement for a licence for the project should be completed around the same time that Pompeo is here, there will be no influence on that process.
Bharrat said that teams from both government and ExxonMobil will today again meet to straighten issues relating to the project as environmental matters such as flaring, water dumping along with overlapping legal terms from the Liza-1 project remain outstanding.
The current review team is comprised of technical persons from the Department of Energy, Guyana Geology and Mines Commission and the Environmental Protection Agency (EPA) led by international consultant, Canadian Queen’s Counsel, Alison Redford.
“There are still some environmental concerns to be addressed and an overlapping legal issue. They are meeting again tomorrow and we are hoping that by the end of this week we can have another draft with less issues for Payara,” the minister yesterday told Stabroek News when contacted for an update.
“It has nothing, though, to do with Mr. Pompeo’s visit because whether he was coming or not, it had to be done. We had, as everyone knows, started this process before knowing of a visit by the Secretary of State…,” he added.
Government has said that Pompeo will be here on Thursday and Friday of this week.
The Minister of Natural Resources said that he has seen it suggested in the public that Pompeo’s visit is possibly linked to pressuring government to swiftly grant ExxonMobil the licence for the Payara project and he wants to rubbish that thought.
He said that the teams are working around the clock to ensure that this country is satisfied that global environmental and safety standards are met before the licence is issued.
The Irfaan Ali-led PPP/C government announced last month that a review of the Payara Field Development Plan was initiated by the Department of Energy under the then APNU+AFC, which contracted Bayphase Oil and Gas Consultants at a sum of US$386,830 in December 27, 2019.
“There was a first contract extension (no cost) to July 27, 2020 and a second contract extension to September 27, 2020 with a revised contract sum of US$429,382 which represents an 11 percent increase. This review by Bayphase Oil and Gas Consultants will be completed shortly,” it explained.
Through the Ministry of Natural Resources, it added that it had decided to review the work already undertaken by the Department of Energy, so that the interest of all Guyanese is protected and in keeping with international transparency and accountability standards prior to approval being given.
Bharrat said that it was because government did not want a permit granted based on a “minister or ministers’ discretion” that it turned to the Canadian government for help and thus Redford was hired.
Highlight
Redford, he said, continues to highlight some of the current issues that still need addressing such as the dumping of thousands of gallons of reservoir water into the ocean. However, ExxonMobil has, according to Bharrat tried to argue that the dumping won’t have any significant impact and that they will address the flaring concerns.
“Most of the issues we are dealing with are issues highlighted by Alison. She brought out a lot, especially of those,” he yesterday said.
“There is still the issue of the flaring and the water dumping into the ocean. Exxon is claiming because of the depth of the ocean it won’t have an impact. And as it relates to the next FPSO (Floating, Production, Storage and Offloading platform), they are working on remodeling so that it won’t have the issue (as with) the Lisa Destiny”, he added.
He said that Redford has completed the review process of Bayphase’s work.
A source close to the process explained that Redford has said that she will not advise on the issuance of a permit until given the EPA’s green light. “Allison has said that the EPA has to issue the permit and the EPA has to be satisfied and express that satisfaction that the company has satisfactorily met all that was required of them. She understands the importance of the issue. There is still the flaring and the thorny matter of dumping into the ocean,” the source said.
It was EPA’s Head Dr. Vincent Adams who had first raised concerns about the reservoir water dumping and had asked the company to show, through research, that there would be no impact on ocean and marine life.
Adams had also proposed a “tightening of the legal language” in the permit as it pertains to flaring so that periods of start-up flaring do not run into several months. Exxon has to date flared over 10.2 billion cubic feet of natural gas that has seen it forced to reduce oil production quotas to cushion the impact on the environment.
Adams, who holds a PhD in Environmental Engineering, MSc Degrees in Groundwater Hydrology and Geological Engineering/Petroleum Engineering, and a BSc in Civil Engineering has said that claims must be fact and research-based as he believes that it is vital to the future generations of this country and by extension the world, that the environment must be protected.
But in the middle of the discussions and review of the project, he was sent by the new PPP/C government on leave, first stated as 126 days but later corrected to 36 days. His leave will end on October 5th, possibly after the permit is granted.
ExxonMobil has openly defended its plans to release thousands of gallons of reservoir water into the ocean instead of re-injecting it into wells, claiming that it could drive costs up and this country would need to determine the balance it takes.
“The water that we produce is treated on the vessel and what is discharged causes no damage to the environment. It is treated to international standards and there is no harm at all. There is a discussion that is ongoing for Payara on whether or not we go to a different standard, which is you say would be to inject that water. There are some potential risks to doing that, some chemistry issues between the produced water and the reservoir fluids which could cause potential problems creating fractures in the reservoir,” ExxonMobil Country President Alistair Routledge had told a virtual press conference late last month.
“There are also potentially environmental aspects of treating and injecting that water in addition to sea water, in the sense that you can have more air emissions because of the potential energy that is needed for the treating of that water. As always with environmental issues these are quite complex balancing acts as to how we manage to get the minimal impact, to protect the environment and to maximize the return to the state from it,” he explained.
The Minister of Natural Resources has assured that whatever decision is made it will be done with this country’s best interest in mind and that evidence that the process will be one of such is the fact that discussions are still ongoing and the company still have to show that it will address the issues raised.
