Thursday, September 28, 2023

Exxon to fund Guyana US$1.2M to support audit of Uaru operations

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ExxonMobil Corporation’s affiliate, Esso Exploration and Production Guyana Limited (EEPGL), is required to submit US$1.2 million to the Guyana government to support its audit of drilling and production operations at the Uaru project.

This was outlined in the Petroleum Production License granted on April 27, 2023 by the Ministry of Natural Resources. The document states that EEPGL will facilitate and fully cooperate with annual audits of drilling and production operations, including waste management and compliance, conducted by the nation’s regulators. Uaru is the third project, after Payara and Yellowtail, to include such a provision. This is one such development in Exxon’s later projects that demonstrates how permits are evolving to support regulation. Payara includes a provision that requires five annual payments of US$400,000 and Yellowtail requires three annual payments as with Uaru.

The Uaru production license further notes that within 30 days of the license being signed, and annually on such date thereafter, the licensee shall pay to an account held and controlled by the Government, the sum of US$400,000. EEPGL is expected to do so for a total of three consecutive years, allowing for a total contribution of US$1.2 million. 

The license states that the funds would be used by the government for the preparation of the audit scope and the procurement of third-party auditors to supplement the regulator’s resources. It would also help to develop institutional capacity for the ongoing conduct of audits.

EEPGL would also be allowed to verify this account. The Minister with responsibility for petroleum also agreed to cooperate, assist and provide the licensee any information it requires to conduct such verification. OilNOW understands that the first such audit is be targeted to conduct an assessment for calendar year 2023, and shall be conducted annually thereafter.

The Uaru Project is expected to come on stream in 2027 and produce over 800 million barrels of oil over a 20-year-period. It is the fifth development in the Stabroek Block which is operated by EEPGL. Uaru is also expected to push investments in projects offshore Guyana over the US$40 billion-dollar mark.

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