GEORGE­TOWN, Guyana (AP) — Guyana’s gov­ern­ment has grant­ed per­mis­sion for U.S. su­per­ma­jor Exxon­Mo­bil to de­vel­op a fourth off­shore oil and gas field and the com­pa­ny said Mon­day it has made a fi­nal in­vest­ment de­ci­sion on the $10 bil­lion project aimed at pro­duc­ing up to 250,000 bar­rels per day.

Guyanese au­thor­i­ties an­nounced ap­proval of the Yel­low­tail Project on Sun­day, adding to the com­pa­ny’s Liza One, Two and Pa­yara fields.

“Yel­low­tail’s de­vel­op­ment fur­ther demon­strates the suc­cess­ful part­ner­ship be­tween Exxon­Mo­bil and Guyana and helps pro­vide the world with an­oth­er re­li­able source of en­er­gy to meet fu­ture de­mands and en­sure a se­cure en­er­gy tran­si­tion,” the com­pa­ny said in a state­ment. The new project is ex­pect­ed to come on­stream by 2025.

It said that near­ly two dozen suc­cess­ful oil wells since the first in 2015 al­lows it to so far have ac­cess to more than 10 bil­lion bar­rels of oil in the Guyana Basin.

The first bar­rel of oil was pumped off­shore in De­cem­ber 2019, mak­ing the coun­try of about 800,000 peo­ple one of the world’s newest oil pro­duc­ers.

The ap­proval comes in the midst of a de­bate be­tween the com­pa­ny and sev­er­al rights and en­vi­ron­men­tal groups as to whether ad­e­quate in­sur­ance is in place in the event of an oil spill. Such an event could af­fect neigh­bor­ing con­ti­nen­tal and tourism-de­pen­dent Caribbean coun­tries, dev­as­tat­ing economies and ma­rine life.

For­mer Guyanese en­vi­ron­men­tal chief Vin­cent Adams said Mon­day that the com­pa­ny must be made to have ad­e­quate in­sur­ance and not al­lowed “to wa­ter down” the lan­guage in le­gal doc­u­ments linked to the is­sue.

He said the en­vi­ron­men­tal agency had agreed with Exxon dur­ing his time as the coun­try’s en­vi­ron­men­tal ad­min­is­tra­tor to en­sure that there was at least $2.5 bil­lion in oil spill in­sur­ance cov­er­age.

The com­pa­ny which con­trols the high-yield­ing Stabroek Block along with Amer­i­can-owned Hess Oil and the Chi­na Na­tion­al Off­shore Oil Corp., says it has at least $2 bil­lion on stand­by in ad­di­tion to the “fi­nan­cial ca­pac­i­ty to meet our re­spon­si­bil­i­ties for an ad­verse event.”

“We are com­mit­ted to pay­ing all le­git­i­mate costs in the un­like­ly event of an oil spill,” it said.

The com­pa­ny re­cent­ly said that it is al­ready prepar­ing to ap­ply for ap­proval for a fifth oil field and could be ready to sub­mit fi­nal doc­u­ments by the last quar­ter of this year.

The suc­cess of the Stabroek Block has pushed most of the world’s lead­ing oil firms to buy in­to neigh­bor­ing blocks or to ap­ply for con­ces­sions near Exxon’s. The gov­ern­ment has al­ready said that it will auc­tion off sev­er­al re­main­ing blocks by the end of this year, in­clud­ing por­tions of un­ex­plored ar­eas by com­pa­nies or those which have been giv­en back to the state be­cause no com­mer­cial quan­ti­ties of oil and gas had been found.

by Bert Wilkin­son

Source: As­so­ci­at­ed Press