Vice President Dr. Bharrat Jagdeo says the government will soon award the contract or contracts for the entity that will be marketing Guyana’s share of the oil produced on the three platforms offshore.

“We received 25 bids, and now they’re having discussions with the top three bidders.

“The key variable here is credibility and price,” the Vice President said.

What the government has been searching for is a service provider who will market its share of the oil from the three floating production storage and offloading (FPSO) vessels offshore Guyana.

Already, the Liza Unity and the Liza Destiny are producing about 380,000 barrels of oil offshore Guyana. Production at the Prosperity FPSO should start soon.

Jagdeo said the government can award the contracts to separate bidders for each vessel or one contractor may get the contract to market oil from all three vessels.

And importantly, he told reporters at a press conference on Thursday that the upcoming award is a good step forward because it shows how the government has been able to secure better benefits for the marketing of the resource.

Previously, Jagdeo said Guyana has to pay a company to market the oil. Eventually, it entered into an arrangement where it did not pay for that service. Now, the government expects to get a premium from the sale of its share of oil.

BP International Limited of the United Kingdom was selected last year to market the oil Guyana is entitled to from the Liza Destiny and Liza Unity FPSOs.

The duration of that contract was for 12 months at a marketing price of US$0.00 per barrel. This procurement process was initiated after the earlier contract with Aramco Trading Limited ended.

‘Don’t miss the next wave’- Guyanese officials tell U.S. investors at bilateral meeting

May 08, 2024

Stakeholders attached to the Task Force on Guyana— a body established by the United States (US) Bilateral Chamber of Commerce—convened at the Amegy Bank Tower in Houston, Texas on Tuesday to discuss key investment opportunities in Guyana. The message was clear: investors should not miss the next massive wave of development set to unfold in Guyana, the world’s fastest growing economy.

The event saw participation from Aida Arissi, CEO of the Bilateral Chamber of Commerce; Marc Hebert, Chair of the Task Force on Guyana; and Heather Evans, Deputy Assistant Secretary for Manufacturing and International Trade Administration at the U.S. Department of Commerce.

The Guyana Contingent included Minister within the Ministry of Public Works, Deodat Indar and Guyana’s Chief Investment Office, Dr. Peter Ramsaroop.

The Deputy Assistant Secretary was keen to note that the Biden-led U.S. administration is supportive of Guyana’s development story. She said her department encourages U.S. businesses to work with Guyanese counterparts in deepening trade relations between both nations.

Evans also expressed optimism in Guyana leaning on U.S. companies for their experience, expertise and high quality solutions that can help it to excel in energy sustainability.

Meanwhile, Minister Indar said he was pleased to hear Evans register the support of the Biden administration for Guyana’s development trajectory.

The Guyanese official also spoke extensively about the work the Irfaan Ali-led government is doing to address several challenges including  high power generation costs. In this regard, he said this is being tackled through the establishment of a landmark gas-to-energy project. This he said is poised to pave the way for a manufacturing boom that will boost trade relations between Guyana, its regional neighbors, and the wider global community.

Overall, Minister Indar urged that the time is now for U.S. businesses to penetrate the market in a manner that aligns with their strengths. His sentiments were also shared by Head of the Guyana Office for Investment, Dr. Peter Ramsaroop.

While Guyana continues to enjoy tremendous economic success on account of its oil sector, the Investment Chief said the next wave for the hydrocarbon producer lies in agriculture. He noted that Go-Invest stands ready to help US companies not only find the right partners, but also enjoy the conditions necessary to support their growth.

Like Minister Indar, he urged, “Don’t miss the next wave of development.”

MODEC has signed a contract for the “Uaru” development project

Nov 01, 2022

MODEC has announced that it has signed a contract to perform Front End Engineering and Design (FEED) for a Floating Production, Storage, and Offloading vessel (FPSO) for the “Uaru” development project. The FEED contract award relates to the initial funding by ExxonMobil’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL), to begin FEED activities related to the FPSO design and to secure the second M350TM hull for FPSO service.

Following FEED and subject to government approvals in Guyana of the development plan, project sanction including the final investment decision by ExxonMobil and EEPGL’s release of the second phase (EPCI) of work, MODEC is expected to construct the FPSO and install it in Guyana. MODEC is also anticipated to operate the FPSO for an initial duration of 10 years, with potential options for continuation.

MODEC will design and construct the FPSO based on its M350 new-build design. Uaru will be the second M350 hull used for FPSO service. The FPSO will be designed to produce 250,000 barrels of oil per day and will have an associated gas treatment capacity of 540 million cubic feet per day and a water injection capacity of 350,000 barrels per day.

The FPSO will be installed in a water depth of about 2000 meters using a SOFEC Spread Mooring System and will be able to store around 2 million barrels of crude oil.

“We are extremely honored and proud to be selected to provide the FEED services for an FPSO for the UARU project,” commented Takeshi Kanamori, President, and CEO of MODEC. “We are equally proud of our robust track record of successful project deliveries in the South America region, and we look forward to cooperating closely with the client and its partners to make this project a success.”

ExxonMobil’s Whiptail Petroleum Licence reflects evolution of Guyana’s permitting process – Senior Petroleum Coordinator

Apr 21, 2024

By Kiana Wilburg
CEO, Guyana Energy Conference and Supply Chain Expo
[email protected]

 

Since assuming office in August 2020, the Guyanese Government has implemented numerous reforms to strengthen the permitting process for oil licences and environmental permits.

Senior Petroleum Coordinator at the Ministry of Natural Resources, Bobby Gossai Jr. recently noted that the Petroleum Production License (PPL) that was granted to an ExxonMobil-led consortium for its US$12.7 billion Whiptail Project exemplifies the regulatory advancements enveloping the sector.

The Whiptail PPL was issued on April 12, 2024. This sixth oil project is targetting the production of 850 million barrels of oil at 250,000 barrels per day. By 2027, it will take Guyana’s total output from the Stabroek block beyond 1.3 million per day.

During his first appearance on the Energy Perspectives Podcast, Gossai examined some of the provisions which underpin the evolution of the permitting process for the oil sector.

The Senior Petroleum Coordinator explained that the Guyana Government has thus far approved four PPLs for ExxonMobil’s projects styled Payara, Yellowtail, Uaru and Whiptail.

He said these PPLs, and their accompanying Environmental Permits, are armed with provisions that significantly improve upon those granted for the Liza Phase 1 and Liza Phase 2 projects.

While one of the better-known improvements includes strict conditions for flaring, (such as the application of a US$50 fee per tonne of carbon dioxide equivalent (CO2e) emitted), there are other new features to note. In this regard, Gossai expounded on the strengthened requirements for resource and reservoir reporting.

“…We want to make sure that we are updated on what the reservoir has, what is the oil in place…and the amount of resources that can be developed commercially…What we want to ensure is that there are monthly, quarterly and half-yearly reports and ultimately, we will see annual updates that make their way to the minister,” said Gossai.

According to the Whiptail PPL, the provision on resource and reservoir reporting is as follows:  “The Licence Holder shall submit quarterly resource and reserve reports to the Minister in respect of the Whiptail Project in such form and manner as the Minister may direct from time to time. (ii) These reports shall cover all potentially saleable products for the Whiptail Project including, but not limited to: oil, gas, natural gas liquids, and all such reports will be developed in accordance with and to the standards set by the Petroleum Resources Management System (PRMS).

“The Licence Holder agrees to cooperate with the Minister in auditing the Licence Holder’s statement of reserves. This cooperation shall include providing reasonable access to the required petroleum data in the Licence Holder’s possession necessary to the Minister, or any person or government agency duly authorised by the Minister, including the Minister’s procured reserves assessor’s evaluation and/or reports.”

That provision also demands that three years following first oil, an unaffiliated, independent third-party consultant must be procured to produce an independent assessment of the resources and reserves for the Whiptail project.

LOCAL CONTENT

While the promulgation of the Local Content Law in December 2021 secures the right of Guyanese to be considered for opportunities across 40 categories of work, the PPLs awarded by the current administration have been armed with an added layer of protection. According to Gossai, the Whiptail PPL demands that ExxonMobil and its partners, Hess and CNOOC, identify all opportunities for Guyanese participation.

“So the operator has a certain timeframe within which to make sure the opportunities for locals are submitted to the Local Content Secretariat,” the Senior Petroleum Coordinator added.

The Whiptail PPL states: “The Licence Holder shall within six (6) months of the date of this Licence provide a list of potential opportunities for local and overseas training or secondee positions within the organisations of the Licence Holder or affiliated companies, together with estimated costs. The Licence Holder shall maintain and update such list no less frequently than each calendar year. The Licence Holder shall accept the Government of Guyana personnel nominated by the minister for such positions…”

ENVIRONMENTAL MONITORING & AUDITING

While the Environmental Permit for the US$12.7B Whiptail project carries its suite of protective measures, the PPL also contains several complementary provisions. The licence states for example that Exxon and partners shall include methane emissions detection and reduction technology in the design of the floating, production, storage and offloading (FPSO) vessel.

The companies are also required to submit a report detailing clearly, how and what methods were used to calculate/ estimate emissions for each pollutant.

The Stabroek block consortium is also required to implement a monitoring programme for environmental resources (such as marine water quality, air, sound, mammals, fish, special species, coastal habitats, birds, benthos etc.) as identified in the Environmental and Social Impact Assessment (ESIA).

Further, the PPL demands that the licence holder conduct routine annual external/third-party environmental audits in accordance with an internationally accepted Environmental Management Standard such as ISO 14001:2015.

DECOMMISSIONING

Decommissioning occurs at the end of the life cycle for an oil and gas project. It involves the safe removal of all equipment used to extract the resources, as well as restorative works to ensure the environment is, as much as possible, returned to its original state.

Gossai said this provision in the Whiptail PPL is perhaps one of the most significant improvements compared to the arrangements in place for the Liza Phase 1 and 2 Projects.

“If we go back to Liza 1 and Liza 2, what we would have had at that time was a Decommissioning Security Agreement between the (co-venture partners) and government. That was a security agreement, in the sense that you say if this field is going to be for 20 years, by the time you reach the decommissioning stage, whether in year 18 or 19, we have some funds in place in an account somewhere to take care of those activities…but that was just an agreement,” said Gossai.

He noted that the Petroleum Activities Law mandates the establishment of a fund on mutually agreed terms, essentially ensuring that at no point will Guyana be saddled with such costs.

According to the Whiptail PPL, Exxon and partners shall, no later than 120 days from April 11, 2024, the date the licence was signed, submit to the minister, cost estimates for the alternative disposal methods considered in creating the Preliminary Decommissioning Plan and Budget submitted with the Whiptail Field Development Plan (GYWT-GP-BPFDP-00-0001).

It further notes that the licence holder shall prepare periodic updates to the “Preliminary Decommissioning Plan and Budget” as contemplated by section 10.7 of the Field Development Plan, and shall submit the final proposed Decommissioning Plan and Budget, for the approval of the minister in keeping with the Act and Regulations.

The PPL also states that within 24 months from the date of the licence, the minister and the Stabroek block consortium shall agree on the terms and conditions for the administration of a Decommissioning Fund.

The concerned parties shall also agree on the terms and conditions for the disbursement of payments for the cost of decommissioning to protect the State from the risk of having to fund decommissioning liabilities. Terms and conditions shall consider, but not be limited to the creation and structure of the fund, governance and contributions to the fund, payment and disbursement procedure, and protection against insufficiency of the fund.

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