After completing the evaluation of the bids submitted for eight of 14 oil blocks, the government has finally awarded eight of the blocks to six different companies.

This was announced by Vice President Dr. Bharrat Jagdeo on Thursday during a party press conference at the People’s Progressive Party Civic (PPP/C) Headquarters at Freedom House.

The list of the companies and blocks are:

  • S3 has been awarded to Sispro Inc., a company headed by four Guyanese businesswomen
  • S4 to a consortium comprising Total Energies EP Guyana BV; Qatar Energy International E&P LLC; Petronas E&P Overseas Ventures SDN BHD (Malaysia)
  • S5 to International Group Investment Inc, a Nigerian group
  • S7 to Liberty Petroleum Corporation of the US and Ghana-based Cybele Energy Limited
  • S8 to a the ExxonMobil, Hess and CNOOC consortium currently operating in the Stabroek Block offshore
  • S10 was also awarded to the International Group Investment Inc.
  • D1 went to Delcorp Inc Guyana and Watad Energy and Arabian Drillers of Saudi Arabia, two Saudi Arabian companies that are incorporated
  • And D2 also went to Sispro Inc.

‘S’ refers to blocks in shallow water while ‘D’ refers to blocks in deep water; there were 11 shallow water and three deep water blocks up for grabs.

The 14 oil blocks that are up for grabs in shallow and deep water areas offshore Guyana (Map from the Ministry of Natural Resources)

Meanwhile, Jagdeo noted that the government will now enter into negotiations with the companies in keeping with the Petroleum Activities law.

“We’ve been told that everyone has confirmed that they have the resources to pay the signing bonus. US$10 million for each shallow block and US$20 million for each in the deep water.

“For any of this to move forward, at a minimum these companies have to meet this requirement,” Jagdeo said.

He also addressed concerns raised.

“We may have a situation where we may not be able to finalise with everyone,” he cautioned, reflecting on concerns already raised by ExxonMobil about fiscal terms.

Jagdeo said the government will not change those fiscal terms and as such, he said, “If the demands are extreme, then we will simply not proceed with that.”

Gov’t to soon award contract for marketing Guyana’s oil

Nov 03, 2023

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.

Guyana making key investments to build world-class environmental regulator – EPA Head

Jun 02, 2024

By Kiana Wilburg, CEO of the Guyana Energy Conference & Supply Chain Expo

With Guyana’s accelerated oil production offshore, the role of the Environmental Protection Agency (EPA) in ensuring the safety of public health while keeping the nation on a low carbon pathway, assumes greater importance. 

 

Head of the EPA, Kemraj Parsram

Executive Director of the EPA, Dr. Kemraj Parsram says he is acutely aware of the need to maintain this delicate balance, hence strategic investments are being made to ensure the EPA becomes a world-class regulator. 

During his inaugural appearance on the Energy Perspectives podcast, a programme powered by the Guyana Energy Conference & Supply Chain Expo, the Executive Director explained how technology is being leveraged to ensure remote monitoring of the oil and gas sector. 

With respect to monitoring water quality, he noted that there are sensors on Guyana’s three FPSOs—Liza Destiny, Liza Unity, and Prosperity.  As part of the operator’s responsibility, he said ExxonMobil and its partners must measure, for example, the concentration of oil in produced water that is being discharged. 

Parsram said too that ExxonMobil is required to treat the water in alignment with World Bank standards before it is discharged. Parsram said these standards outline that there can only be 49 milligrams per day or an average 29 milligrams of oil per litre per month. 

“So, they have these sensors that measure and provide us with that feed. We have a live platform at the EPA where we can see, by the minute, the concentration of oil in produced water,” said the Executive Director. 

He noted that these sensors also allow the regulator to monitor how much gas is flared too. 

“As you know, Guyana prohibits routine flaring…if there is an upset condition and you are testing out a new equipment, you are allowed to flare within a certain limit and if you go beyond, then a flaring fee of US$50 per tonne of every carbon emitted is charged,” he said. 

Furthermore, Parsram said the EPA utilizes NASA’s satellites to monitor any incident of flaring as well as MAXAR technology to have a bird’s eye view of any spill. 

Parsram also noted his interest in leveraging big data analytics and AI as the agency progresses while also ensuring that the staff remains in a continuous training cycle. 

“We have invested in the past year, $40 to $50 million for specific training on oil spill response, rig and FPSO inspection and we are investing to ensure we have the adequate cadre of skills to execute our functions.”

Parsram also shared that his agency has completed a strategic plan covering the next five years, all with the sole intention of laying out a roadmap to become a world class environmental regulator. He believes that is not only achievable but will also position Guyana as an example for other nations to follow. 

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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