After approving fifth oil project, Govt. now asks Exxon to study what it will do with excess gas

May 13, 2023 News

Map showing the Stabroek block

Kaieteur News- Following its approval of Esso Exploration and Production Guyana Limited’s (EEPGL) Uaru Development Project in the Stabroek Block, the People’s Progressive Party (PPP/C) Administration is now requiring that a gas utilisation study be conducted.

This is specifically outlined in the Petroleum Production Licence awarded to the ExxonMobil Corporation affiliate for the project last month. The licence states that EEPGL shall conduct a gas utilisation study, to examine the associated gas and non-associated gas available from the Uaru Project.

This study would consider over the short, medium and long term, a forecast of potential gas production for export from the floating, production, storage and offloading (FPSO) vessel to be used as well as the expected use of such gas.

The study is also expected to consider scenarios for the demand that might be expected for gas sales locally, regionally and internationally; along with the cost and feasibility of gas exported as Liquefied Natural Gas (LNG) and Liquefied petroleum gas (LPG).

Additionally, the licensee is expected to examine the feasibility of utilising the planned wells, flowlines, risers and production facilities for the export of gas both during and after the currently planned production phase. The operator is also required to determine the feasibility and cost of adding more gas export equipment where needed. Potential gas export rates and profiles must also be determined at minimum and maximum feasible rates verified by reservoir modelling.

Notably, the Uaru project which will produce 812 million barrels of oil is expected to cost Guyana US$12.7B.

The Environmental Impact Assessment (EIA) for the project states that it will develop the Uaru, Mako and Snoek oil-rich fields with the potential to develop other resources within the licence area.

The project scope includes drilling approximately 38-63 development wells; installation and operation of Subsea Umbilicals, Risers, and Flowlines (SURF) equipment, and installation and operation of a Floating Production, Storage, and Offloading (FPSO) vessel.

A preliminary schedule anticipates that the FPSO called ‘Errea Wittu’ along with other fabrication and installation works will begin in 2024 following the completion of engineering. Development well drilling may also occur during this period. Production operations are expected to begin in 2027 and will continue for at least 20 years.

With respect to the FPSO, EEPGL’s Environmental Impact Assessment states that oil production will average at 250,000 barrels of oil per day. It was keen to note that peak rates may be higher during the lifetime of the project, depending on multiple factors such as reservoir pressure, number of wells, equipment reliability, etc.

It was also noted that the project will be producing 540 million standard cubic feet of gas per day.

Importantly, telecommunications equipment will also be installed on the FPSO to enable safe operation of the facilities in normal and emergency conditions. Kaieteur News understands that this equipment will allow communication with the offices, shore bases, support vessels, helicopters, and tankers, as well as communication within the FPSO.

EEPGL had previously installed the Fibre Optic Cable Project, which provides the fibre optic communication infrastructure from the Stabroek Block to shore, enabling high-speed, low-latency communications and data transfer between EEPGL’s FPSOs and shore.

In terms of employment, it was noted that there will be a demand of up to 540 persons required to drill and complete the Uaru development wells. Kaieteur News understands that the majority of these personnel will work in the offshore environment on drill ships. In addition, there will be between 10 and 15 trips per week of the support vessels that will be assisting the different drill ships. Most of these roles will require prior offshore oil and gas industry experience and specialized expertise. However, the prior development of the Liza Phase 1, Liza Phase 2, Payara and Yellowtail Projects has resulted in continuous capacity building of the workforce, as additional personnel are upskilled and given greater responsibilities.

The EIA states that this will create opportunities to increase the pool of semi-skilled and skilled workers that can support the project.

During long-term production operations, the in-country, direct offshore workforce will peak at around 100 to 160 people during periods of higher maintenance activity and during offloading of the FPSO.

The EIA also states that during periods of regular operations, the workforce requirement on an FPSO is estimated to be 90 to 100 people.

• Esso Exploration and Production Guyana Limited’s, Exxon, FPSO, Payara and Yellowtail, Uaru