By Suraj Narine
The Government of Guyana (GoG) has taken a decision to grant a production licence to US oil company ExxonMobil, for the Liza field project.
This announcement was made last evening by the Minister of Natural Resources, Raphael Trotman, during the 65th Sitting of the National Assembly in Georgetown, yesterday.
The announcement would come on the heels of Government’s review of the technical and environmental aspects contained in the Development Plan for the Liza Project, which was submitted by ExxonMobil late last year.
Trotman’s announcement would also come one month before the oil-giant was expected to make its Final Investment Decision (FID).
“Government had said a few weeks ago, that it had prepared to issue that license so that the investment decision could be made expeditiously, and I wish to report that Government has taken a decision to issue that license.
This follows on the advice of world-renowned experts who reviewed the development plan and advised that it was appropriate to do so,” Trotman told the House.
Meanwhile, the Ministry of Natural Resources in a press release last evening stated that in a separate process, the Guyana Environmental Protection Agency (EPA) would have already issued the Liza field environmental permit since June 1.
The environmental permit, the Ministry states, ensures that the environment is protected through the lifecycle of the project.
Extraction from the Liza field is expected to commence in 2020 at an initial rate of 120,000 barrels of crude per day in the first phase, with a Floating Production Storage and Offloading (FPSO) vessel providing the main infrastructural support for the project.
The Liza reservoir is estimated to contain between 800 million and 1.4 billion barrels of oil.
It was reported that Guyana will receive a royalty of two percent on gross earnings and benefit from 50 percent of the profits from the sale of petroleum once production commences.
This arrangement that was brokered, has not been sitting well with several sections of society. The Main Parliamentary Opposition – the People’s Progressive Party /Civic (PPP/C) has been very vocal over the arrangement despite, they would have inked the initial exploratory agreement with the company a little over a decade ago.
Government has since maintained that the new arrangement is an improvement on the previous one signed by the PPP/C.
The administration – based on previous reports – would have indicated that the arrangement was tailored in keeping with the arrangements that exist in other hydro-carbon extracting countries worldwide.
However, this publication would have found otherwise.
Trotman told the House also, that the estimated quantity of oil in the Stabroek Block – which is controlled Exxon – may amount to as much as two billion barrels of recoverable oil.
The world currently consumes approximately 96 million barrels of oil per day.
The Minister reported also, that apart from ExxonMobil and its partners, other operators have also signalled their intention to continue exploratory activities in Guyana and hopefully, to go onto production if and when discoveries are made. Other companies have also indicated “great interest” in coming to Guyana, Trotman said.
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