Guyana VP Jagdeo promises to look at insurance for oil spill
By Kaieteur News
Petroleumworld 10 14 2021
As the government continues its review of key documentation related to ExxonMobil’s fourth Stabroek Block Project called Yellowtail, Vice President, Dr. Bharrat Jagdeo, has assured that securing insurance in the event of an oil spill remains a high priority for the government.
The local oil czar made this disclosure during his presentation this week at the national stakeholder consultation aimed at updating Guyana’s Nationally Determined Contributions (NDCs) ahead of the convening of the United Nations (UN) COP26 summit.
While Jagdeo noted that insurance coverage remains an issue of concern, he did not clarify if Guyana would ensure this is obtained from the parent companies and not the subsidiaries which hardly keep any assets. This was one of the major blunders of the former regime with previous projects for ExxonMobil being: Liza Phase One, Liza Phase Two and Payara.
Head of the Environmental Protection Agency (EPA), Kemraj Parsram, had previously told Kaieteur News that the issues surrounding full coverage insurance from the parent companies of the Stabroek Block are still being examined but no word has been disclosed on the progress of these discussions thus far.
In the meantime, Jagdeo has said that the government is determined to ensure the evolution of obligations regarding the protection of the environment when permits are granted to ExxonMobil going forward.
ABOUT THE YELLOWTAIL PROJECT
According to Esso Exploration and Production Guyana Limited (EEPGL—ExxonMobil’s subsidiary) project summary, the Yellowtail development is located in the eastern portion of the Stabroek Block, approximately 200 km from Georgetown and southeast of the Stabroek Projects. EEPGL said it is expected to produce 220,000 barrels of oil per day by 2025. Production from this project is expected to last at least 20 years.
The production facilities to be installed include subsea equipment attached to the seafloor as well as processing equipment on the ocean’s surface known as a Floating, Production, Storage, and Offloading (FPSO) vessel. The subsurface equipment is expected to be installed at approximately 1,700 – 1,950 m of water depth. The main pieces of kit in the subsurface include the following: production tree, production manifold, flowlines, risers, and umbilicals. The subsurface umbilicals, risers, and flowlines are commonly referred to as SURF.
Building on the previous Stabroek Projects, EEPGL said Yellowtail would be designed to demonstrate continuous improvement in environmental performance. EEPGL in this regard said it routinely strives to make improvements in environmental performance through emissions controls, technology enhancements and process improvements. Expounding further, the subsidiary said in 2020, the FPSO Liza Destiny experienced unanticipated technical challenges and unplanned gas flaring during its start-up and commissioning process.
As a result of the foregoing, EEPGL said it conducted comprehensive root-cause analyses of these issues and evaluated potential improvements to gas handling systems, sparing philosophy and execution procedures. The company assured the EPA that it plans to take significant steps to incorporate the lessons learned from the commissioning of the Liza Destiny into future projects, including Yellowtail.