Guyana’s Vice President Dr. Bharrat Jagdeo says ExxonMobil will pay the Government around US$1.3M for 36 days of flaring at the Liza Phase 1 Development operations, in keeping with new measures implemented by the Environmental Protection Agency (EPA).
During a press conference Friday at the Arthur Chung Conference Centre (ACCC) on the outskirts of Georgetown, the Vice President said a request from Exxon for allowance to flare for 36 days follows discussions between the Government and the company that will see it paying US$30 per tonne of Carbon Dioxide equivalent (CO2e).
The VP was quick to note that the US$30 payment is globally competitive and that it is higher than what is charged in some developed countries.
Dr. Jagdeo explained, “Exxon says they’re flaring about 15 million cubic feet of gas per day now. That will be equivalent to about 1,152 tonnes of CO2 equivalent, or just below… And so, if you work out 1,100-and something, maybe tonnes per day by 36 days it should take us to about US$1.3M, around that, for the period they have applied for…”
When asked about whether this fee will be retroactive, the Vice President replied in the negative.
“If you look at the agreement, it gets triggered now,” he added.
Furthermore, Dr. Jagdeo noted concerns that have been raised regarding this modification to the Liza Phase 1 Environmental Permit and whether ExxonMobil would be recovering the charge based on the Stability Clause contained in the Stabroek Block Production Sharing Agreement (PSA). This clause dictates that the Government must compensate Exxon for any new fees it imposes on the contractor after the PSA was signed in 2016. To this end, the VP said, “No.”
Questions have also been raised about whether Exxon would be able to recover the fee through cost oil. The Vice President however indicated that the Government’s position is that Exxon will not recover the fee.
He explained, “The thing is that we have a method of disallowing this if it comes up. They haven’t claimed it…”
