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Exxon’s claim of “no excess gas” highlights need for feasibility study – PNC/R
Kaieteur News – The People’s National Congress Reform (PNC/R), a faction of the A Partnership for National Unity (APNU), is calling on the Government of Guyana (GoG) to release all documents on the Gas-to-Energy project, in light of a recent statement by ExxonMobil Guyana that there is no excess gas in the Liza Field.
In a statement to the press, the political opposition group said Exxon’s comments cast doubts on the availability of natural gas for the US$2.1 billion venture that is currently being pursued.
It explained, “The PNCR is alarmed by a recent statement by ExxonMobil (Guyana) that there is no excess natural gas available from the Liza oil field, as all gas is being used for production enhancement of the Liza Oil Field. This announcement calls into question the feasibility of the entire Gas-to-Energy project.”
The party said government must immediately reassure the Guyanese people that sufficient natural gas from the Liza oil field will be available for the project.
“There is no room for uncertainty given the monumental scale of this project, and no sane government would build an entire Gas-to-Energy facility without clarity as to the supply of natural gas. We have repeatedly warned of the recklessness of proceeding with this project without a full and updated feasibility study, even though this is stipulated in the PSA,” the PNC/R stated.
It was also keen to note the government continues to refuse to protect Guyana’s legitimate interests and rights, an attitude demonstrated in the audit of the oil company’s expenses and the question of an EEPGL oil spill parent company guarantee. According to the PNC/R, “If the PPP’s recklessness and lack of patriotism remain unchecked, Guyana stands to suffer irreparable damage and to lose tens of billions of dollars.”
On Tuesday evening, ExxonMobil Guyana responded to comments made, that it violated the sanctity of contract principle, by not conducting a feasibility study for the use of the excess associated gas in the Liza Field.
The gas in the field will be piped to shore for utilization by the Government of Guyana for power generation and liquefaction, which will generate additional income through the sale of cooking gas and other products.
Former Executive Director of the Environmental Protection Agency (EPA), Dr. Vincent Adams during an Alliance For Change (AFC) press conference on April 22, told members of the press, he believes the company has violated the said principle that is hindering the government from renegotiating the oil deal, as there is no evidence of a feasibility study, though required under the 2016 PSA governing the oil block.
According to the subsidiary of the American oil company, “The Associated Gas produced from the Liza Oil Field is with priority used for the purposes related to the operations of production and production enhancement of the Liza Oil Field, in accordance with Article 12.1(a) of the Stabroek Block Petroleum Agreement.”
It went on to note, “EEPGL has established through numerous studies that all of the associated gas produced from the Liza Oil Field is fully utilized for production and production enhancement purposes. Therefore, there is no excess Associated Gas and a feasibility study for excess Associated Gas is not required under Article 12.1(b).”
The company also shared that gas produced at Liza is used for fuel and re-injected to improve oil recovery.
Article 12.1 (b) of the Exxon contract states, “…If there is any excess Associated Gas in the Oil Field after utilisation pursuant to Article 12.1(a) the Contractor shall carry out a feasibility study regarding the utilisation of such excess Associated Gas of such Oil Field.”
Meanwhile, EEPGL in a brief statement last evening indicated, “There is no uncertainty about the ability to deliver the gas for the GTE project. Extensive reservoir modeling shows that the gas could be committed for delivery and we have determined that we can release up to 50 million cubic feet of gas per day without significant impact on oil recovery.”
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