Fines Delay ExxonMobil License In Guyana

(Argus, 25.Sep.2020) — Guyana is preparing to fine ExxonMobil over natural gas flaring and untreated water dumping at its offshore Stabroek block.

Discussions over the level of fines have delayed approval of the company’s 220,000 b/d Payara project, natural resources minister Vickram Bharrat said.

But Bharrat said an agreement on the development plan will be signed by the end of September.

“We have managed to negotiate on a number of environmental issues,” Bharrat said. “Flaring will carry a fine. Water will have to be treated to international standard before dumping.”

ExxonMobil has not commented on the environmental allegations. And neither the company nor Bharrat indicated the level of the planned fines as these remain under discussion. The ministry said the details might not be publicly disclosed.

Local and foreign environmental groups have been critical of the volumes of gas flared at the company’s Liza-1 well and the dumping of polluted water.

The Payara license was already delayed by a five-month political impasse following disputed elections in March. The stalemate ended with the installation in August of a government led by President Irfan Ali.

Payara is ExxonMobil’s third project on Stabroek and is central to the company’s production target of 750,000 b/d of 32.1°API Liza crude by 2025.

ExxonMobil has suspended work on the floating production, storage and offloading (FPSO) vessel earmarked for Payara as it awaits government clearance of the development plan, the company said on 8 September.

ExxonMobil operates 6.6mn-acre Stabroek with a 45pc stake. US independent Hess holds 30pc, and the remaining 25pc belongs to Chinese state-owned CNOOC unit Nexen.

The consortium started a series of discoveries at the Liza-1 well in 2015. It started production in December 2019 from Liza-1 and was producing around 85,000 b/d as of the end of August, short of a 120,000 b/d forecast, because of a compression issue.

ExxonMobil projects the launch of the Liza 2 project in 2022. And it spudded the Tanager-1 well in August on the Kaieteur block, which is adjacent to and northeast of Stabroek.

ExxonMobil has a 35pc stake in Kaieteur. Its partners are Canada’s Cataleya Energy and Israel’s Ratio Energy holding 25pc each, and US independent Hess with 15pc.

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By Canute James