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Payara licence says no routine flaring permitted but more studies needed for reinjecting produced water

The production licence for the Payara oil field, which was signed on Thursday after a review of ExxonMobil’s field development plan, prohibits routine flaring but provides for more studies on the pros and cons of reinjecting produced water.

In the document signed by representatives of Esso Exploration and Production Guyana Limited (EEPGL) and the Guyana government, the Petroleum Production Licence states that “routine flaring by the licensee is strictly prohibited without approval” even if there is equipment failure.

However, the licence still opens up the door for the Environmental Protection Agency (EPA) to approve flaring for production. “Flaring to maintain oil production should any part of the gas handling system have failed will not be permitted save and except where approval has been obtained to flare from the Environmental Protection Agency,” the licence states.

The document further states that flaring will only be allowed in keeping with the environmental permit for commissioning and start-up. The ExxonMobil-led EPPGL consortium further agreed not to flare more than 60 days during start-up and special circumstances including emergencies, maintenance and restart or as allowed under the environmental permit or approved by the EPA.

The licence shall pay all fines imposed in respect of flaring in violation of the Environmental Permit by law, by the EPA and
in keeping with framework to compensate government.

The EPA late Wednesday night stated that the fines would soon be made public. “Specifically, the Permit allows for fines to be imposed for any flaring beyond a permitted duration. It also requires EEPGL to conduct flaring studies which will serve to inform the EPA in the setting of limits for flaring. Further, within three months of the issuance of the Permit the EPA will set fines for excess flaring.”

According to the licence, which was signed by representatives of ExxonMobil and co-venturers Hess, China National Oil Company and Guyana’s Minister of Natural Resources, Vickram Bharrat, EEPGL has to conduct a study to determine the impact of reinjecting produced water into the well instead of dumping it into the Atlantic ocean. For now, the only definitive provision on produced water in the licence is that the new Floating Production, Storage and Offloading (FPSO) must include tie-in points and space for produced water injection equipment.

But the Payara Production Licence provides for EEPGL to submit to the Minister of Natural Resources and the EPA the terms of reference for a study detailing the costs, benefits and feasibility of implementing a system for the reinjection of produced water “save and except in defined unavoidable situations,” as the main disposal method. The study is also expected to examine the minimization of effects of discharging produced water into the ocean in keeping with accepted international standards. The licence binds ExxonMobil and its partners to submitting the report of the study within 180 days of the Minister’s approval of the terms of reference.

As the study is progressing, the licensee must meet with the Minister of Natural Resources or his representatives every 30 days or more frequently to discuss the issues raised by the  study and come to an agreement on resolving issues or concerns.

President of ExxonMobil Guyana Alistair Routledge last month publicly stated that he preferred to discharge the treated water into the ocean rather than reinjecting because the water is treated on the vessel and “what is discharged causes no damage to the environment.” “It’s treated to international standards and it’s no harm at all.  In the context of reported preferences for the production water from the Payara well to be re-injected into the reservoir, Mr. Routledge warned that doing so could possibly cause some problems. “There are some potential risks to doing that. There are some chemistry issues between the produced water and the reservoir fluids into where we would inject which can cause problems, potentially raising fractures in that part of the reservoir,” the ExxonMobil official said.

ExxonMobil intends to begin producing 220,000 barrels of oil per day from the Payara Well by 2022.

The EPA on September, 24, 2020, issued an Environmental Permit valid for 5 years, to Esso Exploration and Production Guyana Limited (EEPGL) for the Payara Development Project