Govt. fails to publish Redford’s Payara review, three months after promising to do so

Dec 15, 2020 News

Minister of Natural Resources, Vickram Bharrat.00

Kaieteur News – After promising transparency in its management of Guyana’s oil and gas sector, the Government of Dr. Irfaan Ali is shirking a key aspect of that mandate: the release of the US$9B Payara project review, done by controversial Canadian consultant, Alison Redford.
Minister of Natural Resources, Vickram Bharrat, promised that the findings of the review would be made public in September, weeks before the government approved the Payara Field Development Plan (FDP) submitted by ExxonMobil.
The new government, after being installed in August, decided to complete the review started by the David Granger administration’s consultant, Bayphase Oil & Gas Consultants. That company is a client of ExxonMobil. Using a grant from Canada, the Government hired a team headed by Redford. The team’s job involved reviewing Bayphase’s work.
Redford, an ex-politician, resigned from her post as Premier of Alberta, Canada in 2014 for inappropriately spending Canada’s tax dollars.
She was also found to have benefitted from money donated to her former political party by an ExxonMobil subsidiary in Canada, called Imperial Oil.
Redford’s team completed its review in six weeks.
Pivotal issues include the cost of the Payara project. Notably, Exxon stated in a release that the Payara development will cost US$9B to produce 600 million oil-equivalent barrels. This is US$3B higher than its US$6B estimate for the Liza Phase Two project, which will be producing at a similar peak rate from a reserve with a similar volume estimate. Exxon is yet to justify this significant cost difference.
There are also two major environmental issues, which were not brought to finality.
Government said it has strictly prohibited routine flaring without approval from the Environmental Protection Agency (EPA), and explicitly stated that any flaring to maintain oil production is not allowed at the Payara project. ExxonMobil’s local subsidiary, Esso Exploration and Production Guyana Limited (EEPGL), will be expected to compensate the government for the cost of wasted gas during flaring and will be subject to fines under the EPA, which are related to emissions from flaring. It is also expected to establish a framework for a carbon price in line with international standards.
The EPA can grant permission on a month-by-month basis after taking into account, a study of the circumstances and a detailed report for requiring same. This is not a departure from the situation occurring at the Liza Phase One project, where ExxonMobil has flared over 12 billion cubic feet of natural gas.
As for the dumping of produced water, Government said that it has now required EEPGL to include tie-in points and space for produced water injection equipment, in its base design, consistent with its commitment to advocate for discharge of produced water at internationally accepted standards.
Government is supposed to oversee a study to be conducted by Exxon by the first quarter of 2021 to examine the safe and efficient reinjection of the produced water, and determine the effects of the reinjection on the reservoir. The licence states that the study will also seek to determine how the effects of dumping produced water in the ocean can be minimized. Government said that this is in keeping with its commitment to preserve marine life and water quality. The dumping of produced water at Payara has not been prohibited.
ExxonMobil has also been dumping thousands of barrels of produced water into the ocean at its Liza Phase One operations.

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