Govt engaging Exxon over use of natural gas for power generation

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ExxonMobil and the Guyana Government on Wednesday wrapped up another round of high-level technical talks aimed at looking at the feasibility of using natural gas transported from its wells in the Atlantic to shore, in order to be used to supplement the nation’s electricity demands.

ExxonMobil President, Stephen Greenlee

The first in what is being heralded as a series of continued discussions on commercial and power generation issues began on Tuesday last when officers of the Government of Guyana and technical members of ExxonMobil met in Georgetown.

That meeting follows one held a day earlier by Head of State David Granger and ExxonMobil’s President, Stephen Greenlee, on the sidelines of the 72nd Regular Session of the United Nations General Assembly in New York.

Greenlee in early 2017 had revealed that the company was excited by the results of a production test of the Liza-2 well, which confirmed the presence of high-quality oil from the same high-porosity sandstone reservoirs that were discovered in the Liza-1 oil well completed years before in Guyana.

The technical working group which met on Tuesday and Wednesday featured technical persons from the Ministries of Public Infrastructure, Natural Resources, Finance, and Business; the Guyana Energy Agency; and the Guyana Power and Light Inc, along with ExxonMobil’s power generation specialists and analysts.

According to a public missive issued by the Public Infrastructure Ministry, the working group will focus on natural gas and the surrounding commercial and economic issues as it relates to offshore transportation for onshore power generation.

“Compared to Guyana’s current use of liquid fuels for electricity generation, natural gas is cleaner and its use for energy production could reduce the country’s fuel bill, and in turn, reduce the cost of electricity,” a release from the Ministry stated.

It was further pointed out that the working group will continue dialogue on local and international power generation experiences, including domestic infrastructural requirements and considerations for the potential of natural gas into gas-fired power generation.

ExxonMobil’s oil rig, the Deepwater Champion.

The agenda was said to also include an overview of commercial power generation structures and approaches to power investment. It is expected that capacity building for local and key technical Government officials will be the major output of the two-day session.

“This is particularly important in light of the recent consultations held by the Ministry of Natural Resources on local content policy and its focus on maximising benefits and value retention from Guyana’s petroleum resources through local content and capacity development,” according to the Public Infrastructure Ministry’s statement.

Public Infrastructure Minister David Patterson in that missive explained that “the first of such sessions, the Government of Guyana looks forward to furthering its understanding of the technical and key dynamics of proposed projects in an effort to diversify the energy mix in Guyana.”

Minister Patterson further emphasised that the sessions will not serve as an occasion for negotiations or review of contractual obligations between Guyana and ExxonMobil.
Rather, he said, “It is intended to continue dialogue with an intended wrap-up summary, including presentations updating key Ministries on the joint discussions having taken place over the two-day session.”

ExxonMobil first discovered major reservoirs in nearby Guyana in 2015. After their initial huge discovery of the Liza oil field two years ago, ExxonMobil had later announced that they discovered more oil in the Payara reservoir off the coast of Guyana, increasing the total discovery to about 500 million barrels.

In late April, a team comprising of Ministers Raphael Trotman, David Patterson, Dominic Gaskin, Winston Jordan and Joseph Harmon, engaged in extensive discussions with high-level ExxonMobil officials and executives over the two-day visit at ExxonMobil headquarter.

During that meeting, members of the delegation were updated about ongoing and planned exploratory activities following the significant discovery in the Liza 1 well, and engaged in interactive sessions that covered important topics such as an exploration update, development of the well for production, capacity building to ensure Guyanese involvement and ownership of development of the industry.

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