Even as the new Government is working on a “tight timeframe” to review the Payara development project before granting the necessary permits, it has made it clear that it will ensure that the review process is not compromised and that maximum benefits are derived for all Guyanese.
Minister of Natural Resources, Vickram Bharrat on Thursday said that the Government fully understands the strict timeline it is working with at the moment and has taken steps to ensure that the process is completed “soon”.
“I can assure you that working on a strict timeline, there is no way we intend to compromise the integrity of the license or contract. And we will do everything to ensure that both parties benefit, both parties are satisfied, before that license is actually granted, which could be soon,” Minister Bharrat disclosed during a local radio programme – Guyana’s Oil and You.
The development of Guyana’s world-class deep-water oil resources in the Payara project off its prolific Stabroek Block was plagued by delays due to the political impasse following the March 2 General and Regional Elections.
The Payara development was envisaged to be sanctioned in 2019 and deliver first oil by 2023 but faced challenges to secure approvals due to the absence of a functioning Government for over five months.
After the new PPP/C Government was sworn into office, one of the first issues it was engaged with is the long-awaited approvals for the Payara project in order for it to move ahead.
Minister Bharrat noted that the nation is well aware of what transpired in the past with previous oil contracts and the Government would try to prevent same from reoccurring.
Bharrat asserted that while he accepts that investors must be satisfied, the Government will seek to ensure that when its signs a contract or give a license, “benefits are derived so that Guyanese can benefit”.
“Our people out there want to know whether the Government is looking out for their rights. Whether the Government is doing everything in its power to ensure that Guyanese really benefit from this sector and how exactly they will benefit.”
The Guyana Government, with support from the Canadian Government, is currently engaging the services of an international expert to review the contract to ensure that it is favourable and acceptable.
“We would like to be satisfied before we go ahead and sign this contract. We are engaging an independent consultant to come to Guyana and to do a review of what was done by the Energy Department in keeping with our policies and programmes,” the Minister said.
According to the Natural Resources Minister, the consultant being engaged will arrive in Guyana “in a matter of days” so that a review can be done of the existing document.
The development partners involved in the project are hoping to receive approval later this year.
The Payara development plan includes a floating production, storage and offloading (FPSO) vessel, named Prosperity. It is expected to produce 220,000 barrels per day, supporting up to 45 wells, including production, water injection and gas injection wells.
With the approval of the development plan delayed, the company and other industry experts have warned that Guyana could end up losing billions.
According to Rystad Energy, these delays have already removed more than 50 million barrels of production that could have been achieved by 2030 if the project had been sanctioned in 2019.
Palzor Shenga, Rystad Energy’s Senior Upstream Research Analyst had said that despite recent delays, the Payara-Pacora development is still in a position to produce more than half of its reserves by 2030 if it is able to commence production by 2024.
On the sidelines of an event on Tuesday at Crane, West Coast Demerara, President Irfaan Ali explained that since coming to office, he has made steps to review all sectors, including the oil sector.
“We’re in Government just over a week now. And I’ve asked for a full assessment of all the sectors, not just the oil and gas sector. So, we’ll be receiving documents on all the sectors, including having information and documents on the work that has been done so far in terms of the license for the Payara project,” Ali had said.