Latest update March 28th, 2023 12:59 AM
Feb 06, 2023 News
Kaieteur News – The People’s Progressive Party (PPP) government has made provision in its 2023 Budget to review the Field Development Plan (FDP) for the sixth project American oil giant, ExxonMobil plans to pursue in the Stabroek Block.
Natural Resources Minister, Vickram Bharrat said last week that $100.7 million is allocated for the review of the Whiptail development. He explained that Exxon has indicated that the FDP will be submitted to government late 2023.
The 2023 Budget documents were not clear as to the source of financing for this process. This newspaper tried to ascertain these details from Bharrat who was not very useful. He directed Kaieteur News since last week to speak with a specific member of staff but when asked for the contact information for that person, the Minister did not respond to date. Efforts to contact him yesterday were also unsuccessful.
It must be noted that Exxon is yet to receive approval for its fifth project- Uaru+ but government has been supportive of the accelerated rate of production activities, with the recent allocation testimony of this commitment.
Field Development Plans (FDPs) are one of the most detailed documents oil companies must submit to governments when planning to extract oil or gas resources from a particular field. To ensure a proper interrogation of such a document, countries are expected to hire experienced specialists in varying fields to ensure the oil or gas development plan is in keeping with international best practices, and most importantly, are not overdesigned to allow for inflated costs.
The North Sea Transition Authority (NTSA) states via its guidelines on its website that all FDPs must provide a clear explanation why the development concept being presented is considered optimum from a technical, environmental and economic perspective. The authority also requires that companies set out the commitments, which they will follow to ensure enhanced oil recovery and sound development.
FDPs also include detailed information, which the government needs experienced persons to review regarding production technology and well engineering. In this area, government specialists must diligently assess proposed well design concepts including trajectory and location, in flow performance prediction, sand control and sand management, explanation of concept selection and how value for money would be achieved on each component of the project.
When the People’s Progressive Party /Civic (PPP/C) had assumed office back in August 2020, it left many industry stakeholders stunned after it approved the Payara project in a mere 42 days.
Central to the speedy review process was a Canadian lawyer and former politician, Alison Redford.
Transparency advocates as well as the Opposition questioned how such a review, which usually takes a minimum of 12 months to be properly completed, was done in less than two months.
In light of such a glaring red flag, they urged the government to release Redford’s review of the development plan for the project.
Stakeholders said the nation needs to ascertain whether the project was properly scrutinized by the consultant in question. Though there were promises in the media to do so, the government never fulfilled these.
Hoping to break the spell of non-disclosure, the political opposition took to the National Assembly last year where it asked Minister Vickram Bharrat to provide Redford’s report to the House.
Unfortunately, the spell of secrecy over the contract remains unbreakable as the government cleverly avoided having to fulfil the request made by Opposition Member, David Patterson.
Minister Bharrat has since directed Patterson to read the Payara Petroleum Production Licence if he seeks to understand the work done by Redford and the government’s supporting team.
Kaieteur News previously reported that Redford was also part of the review process for Exxon’s US$10B Yellowtail Project. Her review of the Field Development Plan (FDP) for this project which was done in a record 52 days also came under question by transparency advocates.
On January 17, 2023 the National Procurement and Tender Administration Board (NPTAB) opened two bids from international consultants vying to review the FDP, for the Company’s fifth project at the Uaru oil field.
According to information released from the opening, Bayphase submitted a bid of US$797,480, while Stratoil bid US$709,470, to carry out the review.
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