Page 6 - LatAmOil Week 44 2020

LatAmOil COMMENTARY LatAmOil

He also indicated that the pipeline from the Liza grounds that Guyanese law limits the duration
field would help Guyana’s national power pro- of such permits to five years.
vider GPL in ways that went beyond supplying The agency was able to settle the matter fairly
the new TPP. On the one hand, the link will allow quickly. After an initial hearing, the EPA and
the utility to convert its existing plants, which ExxonMobil agreed to reduce the term of the
burn petroleum products, to gas, which is both Liza-1 permit from 24 years to five, and the High
less costly and less polluting, he explained. On Court issued an order endorsing the settlement
the other hand, it will pump gas to points where on October 29. As a result, the permit is now
it can be loaded onto special cryogenic tankers slated to expire within 18 months.
for transport to mining operations, he said. Melinda Janki, a Guyanese lawyer and envi-
“We have a lot of challenges associated with ronmental activist, hailed the outcome of the
mining that we are trying to correct,” the min- court case. Late last month, she pointed out
ister said. “Diesel is the lifeline for these opera- that ExxonMobil and its partners would have to
tions. Truckloads of diesel are being delivered to apply for another permit in 2022. At that point,
those mines daily.” she said, environmental advocates will be able
The GTP project will not have any immedi- to press the government for stricter terms than
ate effect on upstream operations at Stabroek, as those included in the original arrangement.
it will take time to build the new pipeline and She also noted that the High Court’s ruling
TPP (and to wrap up pricing negotiations). In had forced a similar reduction in the term of the
the meantime, then, the consortium is likely to permit granted for the Liza-2 project.
continue re-injecting associated gas back into its “That permit will expire in 2024 and not
oil reservoirs. 2043, as in the initial permit issued by the EPA,”
Nevertheless, once the new facilities are she said in a statement. “The environmental
completed, it will have a new means of uphold- permits for Liza-1 and Liza-2 have already been
ing its environmental commitments to Guyana’s revised to conform to applicable law. The Payara
government. That is, it will have another option environmental permit of September 24, 2020,
for ensuring that it does not have to flare off the was issued for five years in conformity with the
associated gas it finds in its oilfields. law.”
Once again, the outcome of the court case
Environmental permits is not likely to have any immediate impact on
Meanwhile, associated gas is not the only matter operations at Stabroek. The consortium is still
that the Stabroek consortium has been discuss- able to work at Liza-1 under the same conditions
ing with Guyana’s government during the last of its original permit, even if that arrangement is
week. The two sides have also wrapped up talks now due to come to an end sooner than planned.
on reducing the term of the group’s environmen- Going forward, though, ExxonMobil and
tal permit, in line with a recent ruling from the its partners will probably have to brace them-
South American state’s High Court. selves for tougher negotiations with the gov-
ExxonMobil has been working at Liza-1 ernment than they have done previously. This
under a 24-year permit granted by Guyana’s is not exactly surprising, given that Guyana’s
Environmental Protection Agency (EPA) in new government, headed by President Irfaan
2016. The lengthy term of this arrangement has Ali, has criticised the favourable terms offered
drawn criticism from Troy Thomas, a Guyanese to international oil companies (IOCs) by the last
scientist who once served as president of Trans- administration. But it does represent a change,
parency Institute Guyana Inc. (TIGI). Thomas and the consortium would do well to prepare
filed suit against the EPA earlier this year on the itself. ™

P6 www. NEWSBASE .com Week 44 05•November•2020