Guyana’s Minister of Natural Resources has revealed that the government agreed to let Exxon unitise the Liza and Payara fields, a step to allow a floating production, storage and offloading (FPSO) vessel from one field to tap oil from a well in the other field. This agreement was highlighted during the recent Parliamentary debates on the Petroleum Activities Bill 2023, prior to it being passed.
Bharrat said the government faced a challenge during the licensing phase of the Payara project in August 2020, during which ExxonMobil asked for a unitisation agreement. “We didn’t know anything much about the unitisation agreement because we were never faced with quite a situation like that before,” Bharrat shared.
For those unfamiliar with the term, unitisation in the context of oil and gas refers to the development of reservoirs which span multiple license areas.
Drawing from the Payara example, Bharrat explained that there was a well located within the Liza license area but not being tapped from the Destiny or Unity FPSOs that operate in that field. The government’s consent was essential to ensure Exxon could produce oil from the Liza field well with Payara’s Prosperity FPSO. The fields were therefore unitised. Bharrat said the agreement ensured that no resources were left stranded.
Bharrat further elaborated on the potential complications that could arise in situations involving different blocks and operators. Using the hypothetical example of the Corentyne Block and the Stabroek block, Bharrat stated, “if there’s the Corentyne Block and the Stabroek block and we know we have reserves close by, one of the companies may very well want to produce [jointly] from the other block.”
The new offshore model petroleum agreements and the Petroleum Activities Bill now cater for the unitisation of reservoirs that straddle multiple contract areas or a contract area and an open space. Bharrat added that the bill also accounts for cross-border negotiations, such as potential reserves shared between Guyana and its neighbour, Suriname.
The inclusion of the unitisation clause in the Petroleum Activities Bill, Bharrat explained, ensures that the nation is well-prepared for potential future needs.
