Latest update March 29th, 2024 12:59 AM
Nov 28, 2018 ExxonMobil, News
By Kiana Wilburg
The decision of the Energy Department to increase its scrutiny of ExxonMobil’s Field Development Plan (FDP) for the Liza Phase Two Project marks a small step in the right direction. This was the comment of Chartered Accountant and Attorney-at-Law, Chris Ram.
Ram told this newspaper that he welcomes the steps by Government to impose some kind of order in the oil and gas sector and “bring an end to this culture where Exxon could do as it feels.”
Be that as it may, the Chartered Accountant who has written extensively about the failings of the government in this sector, expressed concern that at least one of the horses has already bolted and that is the Liza Phase One FDP. He insisted that every effort must be made to rein it in.
Ram said, “It must be subject to the same degree of accountability and we need to do the work that we ought to have done. It is not too late. We still have 20 months to go and we have much at stake…But that is not to take away from the fact that I welcome that something is being done by the government. It is a little step in the right direction.”
NO IMPACT
Even though the coalition Government has taken a decision to increase its scrutiny of ExxonMobil’s Field Development Plans it will have no impact on plans for the Liza Phase Two project as envisioned by Exxon.
Specifically making this point to Kaieteur News recently was ExxonMobil’s Senior Director of Public and Government Affairs, Deedra Moe. The official said, “We’ve been in close communication with the government about the development plan timing and will continue to work closely with them throughout the review process. We remain on track for first oil from Liza Phase Two in 2022.”
Asked to say if this move by Government will delay the company’s investment for Phase Two, Moe said, “We will make our final investment decision following approval of the development plan.”
Speaking on the Government’s decision to increase its scrutiny of FDPs was Head of the Energy Department, Dr. Mark Bynoe. The official said that the Government is interested in ensuring that its approval is premised on the knowledge of experts in the field.
He said, “We are reviewing a FDP for Liza Two…We have been advertising in the local media for some time now for experts in the area of FDP and cost recovery. As I indicated, Government wishes to make decisions based on knowledge…”
Dr. Bynoe added, “But there is a lot of misinformation and people not seeking to understand processes…I heard some people complaining about why we are taking so long to review a FDP but these things (review of the FDP and cost recovery audits) are being financed by multinational institutions.
They require us to go through a process of Expression of Interest then we shortlist and ask companies to provide technical and financial proposals and so forth. Procurement has a process by which we follow and if we sole source we are going to be torn to shreds again about why you sole sourced…”
The issue of Exxon’s investment in the Liza Phase Two project being delayed by Government’s review process came to light by an article published by Upstream Online.
The media outfit said, “ExxonMobil has delayed a final investment decision on the second-phase development of the giant Liza play off Guyana as President David Granger’s government tries to reconcile an aggressive development schedule with domestic complaints about terms granted to the US super major.”
It noted that ExxonMobil said in July that it was aiming to sanction the Liza 2 development by the end of this year, chasing first oil by mid-2022, but the final investment decision target has slipped back to the first quarter of 2019. Upstream Online attributed this to “industry sources.”
Upstream said it understands that the delay actually relates to the first Liza floater, already under construction following a contractual award to SBM Offshore.
The media outfit said, “This first phase of development, featuring a floating production, storage and offloading unit with a production capacity of 120,000 barrels per day of oil, has already received government approvals and project sanction, and is expected to start producing in 2020.
“Cost recovery arrangements for Liza 1 were never fully reviewed, however, and this element continues to come under scrutiny.
“The Granger administration recently put out a tender for consultancy services in order to obtain an independent analysis of this aspect of the cost oil aspects of the production-sharing agreement that governs the Liza development, slowing the approvals process on Liza 2.” (SEE LINK FOR FULL ARTICLE https://www.upstreamonline.com/hardcopy/1637799/liza-2-sanction-slips-as-guyana-workload-grows)
THIS IDIOT TELLING GUYANA WE HAVE NO SAY IN THE 50% PROFIT SHARING AGREEMENT WE HAVE WITH EXXON.
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