May 26, 2022 News
– claims removing equipment could do more harm than good
By Gary Eleazar
Kaieteur News – Esso Exploration and Production Guyana Limited (EEPGL)—ExxonMobil Guyana says while it is yet to develop a decommissioning programme for its fifth project-Uaru to be submitted for approval by the government, in accordance with the Petroleum Agreement, it plans to abandon a significant amount of junk on Guyana’s seabed at the end of that project.
This much can be gleaned from the Project Summary for the planned fifth Exxon Project in Guyana that was submitted to the Environmental Protection Agency as part of the approval process. The abandonment of the equipment was also confirmed by In Country Projects Manager Anthony Jackson during a public scoping exercise held at the Umana Yana on Tuesday.
Jackson in response to enquiries on the decommissioning aspect of the project in fact doubled down abandoning the equipment and leaving it in place.
He sought to justify this position by pointing to the fact that in some countries, it has been found that marine life by the end of these projects would assimilate into the environment and such removing the equipment could do more harm than good.
He told those in attendance that what has been observed over the years is that by the time a project comes to the end of its life, marine life such as barnacles and corals would have already attached themselves to the equipment and as such ripping them off the seafloor could cause more damage to the environment.
Decommissioning is a normal and planned petroleum activity and generally involves the plugging and permanently closing off wells, the safe removal of equipment, infrastructure and property and importantly restoration of the environment at the end of the life of a project, in this case 25 years.
It would be poignant to note that in each of the project summaries provided to the EPA thus far for the five projects, the plan is to abandon the equipment on the seafloor as part of the decommissioning exercise.
According to the EEPGL document, the final decommissioning strategy is expected to include a comparative assessment, which is designed to evaluate the potential safety, environmental, technical, and economic impacts and associated mitigation measures in order to finalize the decommissioning program.
It was outlined in this aspect of the document that subject to future comparative assessment, the expectation is that the subsea umbilicals, risers, and flowlines are commonly referred to as SURF components “will be detached from the FPSO and abandoned-in-place on the sea floor.”
According to ExxonMobil, this will be done in consistence with “industry best practices at the time of decommissioning.”
The FPSO, EEPGL said, “is expected to be towed away, and the FPSO mooring system will be disconnected and abandoned on the sea floor—consistent with standard industry practice.”
Pressed on the vague language being used in the documents that leaves a vacuum of information for public consumption, Jackson noted that this was done in a deliberate fashion.
According to Jackson, this is the case since, at present there are numerous uncertainties and unknown factors in order to present details with more specificity.
He reminded too that the decommissioning plans are yet to be developed. When asked to provide what informs what amount is being deducted from Cost Oil for Decommissioning, Jackson was unable to provide a definitive answer.
He further contended that he was unable to, at the time, provide an equation that determines the amount of money to be deducted for the purpose of decommissioning.
Under the Production Sharing Agreement that has been guiding the operations of ExxonMobil since 2016, the company would have already begun deducting money from its operations for the decommissioning activities from the oil being produced.
Environmentalist and International Attorney at Law, Melinda Janki in December last, had lamented the arrangement.
She had noted in a public missive that at the end of production, the oil wells must be decommissioned i.e. permanently shut down and securely capped so they do not leak and pollute the Atlantic Ocean.
She had noted that a financial report by the global think tank IEEFA shows that by 2024, Esso will have deducted US$227M for decommissioning in Liza 1 alone.
“Obviously, Esso will keep on taking out decommissioning money for as long as it can.”
She had also noted that there is no guarantee that Esso will produce this decommissioning money when the wells have to be shut down.
“There isn’t even any guarantee that Esso will exist at decommissioning. The oil industry is known for leaving host countries to clean up its mess. ExxonMobil could wind up Esso and walk away, leaving Guyana to pay for decommissioning.”
The wells are ultra-deep and very dangerous and decommissioning is expensive, she reminded.
Those concerns had been raised at a time when Exxon was producing from the Liza I project.
ExxonMobil Guyana recently commenced public consultations having submitted an application for environmental authorisation for its fifth development in the Stabroek Block its Urau-1 field development.
In the timelines outlined for the project, as stated by ExxonMobil Guyana, works related to the pre-Front End Engineering and Design (FEED) aspect for the project’s FPSO vessel commenced since September last year.
Jackson conceded that this is “technically true” but all of the works being undertaken at present in relation to the fifth project are preliminary.
This (pre-FEED) aspect of the development of the fifth project for ExxonMobil Guyana in the Stabroek Block is expected to be completed at the end of September this year after which, it will move into the Engineering Phase. According to the timelines released by ExxonMobil Guyana, that aspect of the project should be completed by the end of October next year.
Meanwhile, as it relates to the SURF—subsea installations, the pre-FEED for that aspect of the project, at least according to the proposed project document, commenced in January this year and is also slated to be completed by the end of September this year.
Following completion of the pre-FEED, it will then move into the Engineering phase scheduled to begin after that in October and is expected to be completed by the end of November next year.
As it relates to the FPSO slated to be named ‘ONE GUYANA’, fabrication of that vessel, according to EEPGL’s Project Document, will commence at the beginning of November and is expected to be completed and ready for tow to Guyana by May 2026.
By that time, the manufacturing and transportation of the subsea equipment and installations are also expected to be completed, in time for installation by March 2025.
The development drilling wells are expected to commence in March 2025. Start up of production is expected by the end of 2026 with the operations reaching peak production levels by May, the following year.
Formally titled the Uaru Development Project (Uaru), EEPGL is proposing to develop its fifth of 10 planned oil production facilities offshore Guyana in the Stabroek Block alone.
The company also holds controlling interests in a number of other offshore blocks for which exploration wells are planned this year including on the Canje and Kaieteur Blocks.
This fifth development is to be located in the eastern portion of the Stabroek Block, approximately 200km from Georgetown with production from Uaru Project expected to last approximately 20 to 30 years.
It is envisaged that EEPGL will drill between 40 to 76 wells offshore to support extraction of the oil from below the sea floor. Each well will be drilled using a drillship and EEPGL will install some of the oil production facilities on the sea floor at approximately 1,450 to 1,950m water depth. The FPSO will be moored on location in approximately 1,690m of water depth and will remain on location throughout the production stage, according to EEPGL, which will have the peak capacity to produce up to approximately 220,000 barrels to 275,000 barrels of oil per day. Processed oil will be stored in cargo tanks inside the FPSO hull which have the capacity to hold approximately two million barrels of oil. It was noted that during peak production, approximately every four days, the oil will be pumped from the FPSO to a conventional oil tanker, which is owned/operated by third parties.
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