GEORGETOWN, Guyana, CMC – Despite starting work on the multimillion-dollar gas-to-energy project at Wales, oil and gas giant ExxonMobil has still not yet settled on its Final Investment Decision (FID).
President of ExxonMobil Guyana Alistair Routledge told a news conference on Thursday that the company has been pushing ahead with early works for roads, bridges, and laydown areas on the West Bank Demerara to prepare for commencement in 2024.
The proposed project will bring associated gas from ExxonMobil Guyana-operated projects offshore (Liza Phase 1 and 2) via pipeline to onshore gas processing facilities. The pipeline would transport up to 50 million standard cubic feet per day of natural gas to the facilities.
Routledge said ExxonMobil is in the review process with the Ministry of Natural Resources on the Field Development Plan and the update to the license for the Liza field.
“Once we have gone through that step, we’d be able to make all the Final commitments, Final Investment Decisions around all the necessary investments,” he said.
He added that ExxonMobil last year submitted revisions to the Lisa Field Development Plan that are required to lay the pipeline, the risers, and other equipment to connect the offshore facilities to onshore and to amend the Field Development Plan accordingly.
Routledge also told the media that the US$160 million for constructing a headquarters for ExxonMobil Guyana at Ogle would be recovered from the sale of oil, as provided for under the Stabroek Block Production Sharing Agreement (PSA).
Under that agreement, Guyana is entitled to two percent of all pre-cost revenues as royalty and 50 percent of all profits. However, the PSA also provides for as much as 75 percent of the payments to go toward cost recovery.
“This is fit for purpose development,” Routledge said of the headquarters, which the Opposition had earlier this week raised questions about.
‘The inside would be very functional with all the technology. One floor of one of the buildings will almost entirely be put aside to operate facilities, including control rooms and monitoring facilities for the offshore operations connected by fiber optic. So, it’s very much an integral part of the offshore operation.
“We need somewhere where people can work together collaboratively and efficiently, and that’s what the new office designers intended to do. It’s there solely to support the operation that we are running,” he added.
Routledge added that the revenues from the sale of gas to the Guyana government are expected to cover the cost of the pipeline that Exxon’s affiliate, Esso Exploration and Production Guyana Limited (EEPGL), is investing about US$1 billion in constructing.
However, he stressed that the company would not profit from the gas sale.
He said once the cost to construct the pipeline is fully recovered, the profit will be split.
“The cost recovery mechanism is obvious in the contract. When costs are recovered, all other revenues go into the profit side of the calculation, and then those are split with the government, the country, and the investors,” Routledge said.
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