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Guyana is the only place where Exxon awards contacts for unapproved projects – ExxonMobil
Kaieteur News – ExxonMobil, the largest shareholder in the Stabroek Block is so confident in the regulatory systems of Guyana that the company has had no qualms in awarding US-multibillion-dollar contracts in the absence of the relevant project approvals.
ExxonMobil Guyana Limited Country Manager, Alistair Routledge
In fact, the company’s Country Manager, Alistair Routledge said all it needs to do is provide the right “material” and “answers” to government to make the system “dependable”.
Routledge was on Tuesday responding to a question from Kaieteur News during a press conference about its practice of awarding contracts outside the relevant project approvals when he explained: “the procurement process is separate from the regulatory process. All we are doing there is going through and aligning in such a way that we are ready to move forward as of when we receive regulatory approval.”
The Exxon official told reporters that while there is risk with making such huge investments prior to receiving government’s blessings, the company sees it as an “acceptable risk” since they believe the process to be “dependable” when it comes to sanctioning projects in the Stabroek Block.
“So yes, we are taking a little bit of risk on our side because the FDP (Field Development Plan) hasn’t been approved, but we view that that’s an acceptable risk given that we’ve seen the kind of regulatory process – its dependable as long as we provide the right material, the right answers to the government then we found that to be dependable,” Routledge said.
He was keen to note however that Exxon may not take such investment decisions in other countries since it does not share the same confidence of a dependable process elsewhere. Only last week, this newspaper reported that Dutch shipbuilder, SBM Offshore has been awarded a multi-billion dollar contract to perform front end engineering and design (FEED) for Guyana’s sixth floating, production, storage and offloading (FPSO) vessel. That ship is expected to work for ExxonMobil’s sixth deepwater oil development project in the Stabroek block, Whiptail.
This award was done by Exxon before it submitted its Field Development Plan (FDP) on the US$12.9B project to the government for review. This means that the project is still under consideration by the local authorities. This award came as no surprise to those keeping a watchful eye on the company’s operations over the past few years since the fifth FPSO shipbuilder, MODEC was also paid US$115M ahead of government’s approval.
In January this year, Exxon also handed out yet another contract for its fifth project- Uaru- in the absence of regulatory approvals. It was reported that Strohm B.V, which is headquartered in the Netherlands revealed that it received a contract from Exxon to supply 24 jumpers (pipes and pipe connections) for the Uaru field development which will produce 1.3 billion barrels of oil over the course of 20 years. In 2021, the oil giant awarded Netherlands-based, SBM Offshore contracts for the fourth FPSO, to operate the Yellowtail project before it was approved. Likewise, with the Payara project, the Prosperity FPSO got underway prior to the necessary regulatory approvals.
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