…EPA yet to make a decision on project’s environmental permit

Even though the Environmental Protection Agency (EPA) is yet to state its position on the granting of the environmental permit for ExxonMobil’s Yellowtail development project, the Government is forging ahead with preparations for the offshore development.

In a January 06 notice published on the Ministry of Natural Resources website, the government invited bids for consultancy services for the review and evaluation of the Field Development Plan (FDP) for the Yellowtail development.

The Yellowtail project is ExxonMobil and partners’, fourth development in the Stabroek Block and is considered the largest undertaking since Guyana became an oil-producing nation. As part of the Yellowtail Project, ExxonMobil plans to drill between 40 and 67 wells for the 20-year duration of the investment. It is intended to be the largest of the four developments with over 250,000 barrels of oil per day targeted once production commences. Based on the schedule, once approval is granted, engineering commences in 2022 and production in the latter part of 2025.

Exxon, through Environmental Resource Management (ERM) applied to the EPA for an environmental permit to operate in the Stabroek Block offshore Guyana. They have since submitted the Environmental Impact Assessment (EIA) and other ancillary documents as part of the process as well as holding public consultations. The statutory period for the public to submit objections expired last month and since then the EPA and the Environmental Assessment Board have been silent as to what the next move will be.

A number of environmentalists and groups submitted objections to the EIA noting that the company fails to address a number of impacts on the environment. Also, questions were raised about ERM’s ties to Exxon since it is the same company that did all of Exxon’s EIAs.

In the letter of invitation, the Ministry of Natural Resources said that it has received a budgetary allocation, part of which it intends to apply for the procurement of consultative services for the Yellowtail project inviting firms to submit technical and financial proposals for the review and evaluation of the FDP.

It added that the purpose of the consultancy is to conduct an in-depth review of the Yellowtail FDP, which includes all supporting and reference documentation, along with the related environmental and social impact assessments (ESIA) submitted by Exxon and its partners; prepare a report setting out the opinions formed in the evaluation of the FDP and ESIA, addressing, at minimum, compliance or noncompliance with the requirements of the existing legislative and contractual framework, particularly the Petroleum (Exploration and Production) Act 1986 and the Environmental Protection Act 1996, the Petroleum Agreement and international best practices and industry standards including any deficiencies, unresolved issues and areas of additional assessments or technical analysis that the GoG should request from the Licensees before making a determination on the FDP; and support the ministry’s engagements and information exchanges with the Licensees.

Additionally, the successful firm would be required to document the field development review process and outcomes, including references to international best practices and industry standards, in a manner and format to support future reference for similar review exercises and overall improvement of the FDP review process while also supporting the ministry in drafting the Yellowtail Petroleum Production License.

The proposals are to be submitted to the National Procurement and Tender Administration Board (NPTAB) no later than 09:00h on January 20.

Responsive

The contract would be awarded to the lowest responsive bidder provided that they have met the minimum qualification score of 70 points after evaluation. Proposals will be evaluated in a two-stage manner, commencing with the evaluation of technical proposals and allocation of merit points and ranking of technical proposals. The ministry said that only those bidders whose technical proposals attain the 70 points minimum would have the financial aspect of their proposal be evaluated.

Based on the evaluation criteria 10 points is for the firm’s general experience in the disciplines forming part of the total assignment, with specific reference to experience in Guyana or in similar contexts; 30 points for the adequacy and quality of the proposed work plan, and the approach and methodology proposed to implement the TOR; and 60 points for the qualifications, experience and competence of the team of key personnel proposed for the assignment.

In relation to key personnel, the bidders are expected to have a team comprising of a leader with a minimum qualification of a Master’s degree in petroleum engineering, geology, or similar discipline along with over 15 years of relevant experience. Other members of the team include a geologist, reservoir expert, drilling expert, subsea/ pipeline operations, surface facilities expert, economist, gas specialist and oil and gas lawyer – all with a minimum of 10 years’ experience in the relevant fields.

“It is estimated that approximately fifty (50) days of service will be required for the assignment. You should therefore base your financial proposal on this figure. However, you should feel free to submit your proposal on the basis of man-days considered necessary by you to undertake the assignment. You are required to hold your proposal valid for 120 days from the date of submission during which period you will maintain without change, your proposed price. The Procuring Entity is expected to finalize the agreement within this period,” the bidding document states.

Further, the Ministry stated that it anticipates that negotiations with the selected firm would commence on February 01 with the project starting around February 7. It said that negotiations will only be held if the technical proposal attains the required minimum score adding that firms must be prepared to furnish the detailed cost break-down and other clarifications to the proposals submitted.

Upon successful negotiation, the contract would be awarded, if not the process would be repeated with the next suitable bidder.

The ministry said that it would dedicate a focal person for the consultant to work with in an effort to achieve its deliverables. Based on the work schedule, the consultant would have to provide the ministry with an inception report inclusive of the work plan and schedule for the review of the FDP and ESIA and on-the-job training one week after the contract is signed. In its fourth week, the firm would have to provide an FDP review and Draft Evaluation Report of its findings including any particulars related to supporting the drafting of the Yellowtail

Petroleum Production License such as conditions, schedules; and after the sixth week it would be mandated to produce the final FDP Review Report, including any particulars related to supporting the finalisation of the Yellowtail Petroleum Production License such as conditions, schedules etcetera.

“All deliverables in electronic and printed copies will be required in English and will be submitted to the Client for review and approval within the deadlines established. It is expected that certain deliverables may require several drafts to incorporate comments by MNR and any other relevant stakeholders before they are determined to be final,” the ministry states.

The ministry further added that the objective of the consultancy is to provide advisory services, technical support and training services to the government through the Ministry of Natural Resources and the sector regulator – the Guyana Geology and Mines Commission (GGMC) or the Petroleum Commission (PC) once established – with the aim of enhancing the country’s core capacity to review, approve and authorize Field Development Plan(s).