Guyana will lose if election results continue to delay Payara development plan- ExxonMobil

ExxonMobil on Friday cautioned that Guyana stood to lose a lot the longer government takes to approve the development plan for Payara.

“Without final resolution of the election result and signing in a new government, there is a potential for delays to the schedule,” Senior Vice President, Neil Chapman told the second quarter 2020 earnings call.

Mr. Chapman suggested that it’s “very important” that the consortium gets the development plan approved in August so that it could issue its Final Investment Decision (FID) in September. Referring to possible bad weather, he said if a certain time-frame is missed, the project could suffer further delay by “some months.”

“What we continue to stress to the government is that if the project does get delayed, it’s a loss of value to the country and they understand that. It’s very, very clear the government understands that. It’s very, very clear the Ministry of Energy understands that,” he said.

He seemed impatient with little movement by Guyanese authorities in approving the development plan for the Payara well located offshore the oi-rich South American nation. Mr. Chapman said ExxonMobil was merely awaiting word from Guyana to make its FID.

“Everything we and the partners can do to progress Payara on schedule, we are doing and we’ve  done. I said to our organisation many times ‘ we need to be ready to move as soon as the government is ready’ and we are ready. We are ready to FID this project but we need an approved development plan and that approved development plan needs to come from the government,”  he said.

Referring to the Guyana government’s hiring of United Kingdom-headquartered Bayphase to evaluate the Payara development plan, the top ExxonMobil official said that has been worked “for a long, long time.”

Mr. Chapman said the consortium that is exploring and producing oil offshore Guyana was also paying keen attention to the political climate in Guyana. “Of course, we are waiting for a resolution, like everybody else of the election,” he said, adding that the outcome of the March 2, 2020 general elections has been held up by the national vote recount and an ensuing string of court cases.

The ExxonMobil official said his company was in “regular contact” with President David Granger and the People’s Progressive Party’s Bharrat Jagdeo and Irfaan Ali.  “What we know is that all parties in Guyana want to progress this development,” he said.

The ExxonMobil official, meanwhile, assured that his company would continue to invest in Guyana’s exploration and production operations. “We would fund all the Guyana opportunities as they come forward,”  he said even as he referred specifically to Liza 2 and Payara developments.

Mr. Chapman confirmed that ExxonMobil discovered two additional high-quality hydrocarbon reservoirs below and adjacent to Yellow Tail.

Looking ahead, the company official expects initial results from another prospect named Red Tail in August, even as it moves to Kaieteur Block in that same month. Hassar 1 and Bulletwood in the Canje Block are also earmarked for exploratory drilling this year.

Up to the end of June 2020, ExxonMobil had four drilling rigs – one on exploration and three on appraisal and project development drilling, the company said.

Liza Phase 2 remains on schedule for the 2022 start-up.