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Company News

Exxon presses for government approval of third Guyana oil project

FILE PHOTO: A logo of the Exxon Mobil Corp is seen at the Rio Oil and Gas Expo and Conference in Rio de Janeiro, Brazil September 24, 2018. REUTERS/Sergio Moraes

GEORGETOWN/NEW YORK (Reuters) - Exxon Mobil Corp is pressing Guyana’s newly-installed government for approval of its third offshore oil project, which has been under a months-long review that coincided with political turmoil in the South American country.

Exxon, which operates the Stabroek block as part of a consortium with Hess Corp and China’s CNOOC Ltd, has discovered more than 8 billion barrels of recoverable resource of Guyana’s coast. It had previously stated it planned to make a final investment decision on the Payara project around September.

After taking office in early August after a months-long recount of a disputed March election, Guyanese President Irfaan Ali appointed a team of Canadian consultants, including former Alberta premier Alison Redford, to review Exxon’s proposal to develop the field.

“The timely approval of additional proposed projects, including Payara, will ensure that the local workforce and the utilization of local suppliers will continue to grow,” Exxon’s new country head in Guyana, Alistair Routledge, said in a Wednesday statement.

Exxon initially planned for the project to come online in 2023 but has warned it could be delayed.

During the campaign, Ali criticized the Production Sharing Agreement (PSA) his predecessor signed with Exxon - which included a 2% royalty and 50% profit share - as too generous. He has pledged to enact stricter rules requiring the company to use more local content and hire more Guyanese labor.

In an interview with Reuters, Ali declined to go into details about which particular parts of Exxon’s proposed Payara development plan were under scrutiny.

“There has to be a comprehensive review,” Ali said. “We have to look at international best practices, we have to look at some of the best PSAs around, we have to look at what we have - the gap - and then in the review come up with possible scenarios.”

(The story corrects spelling of Alistair Routledge)

Reporting by Neil Marks in Georgetown and Luc Cohen in New York; Editing by Marguerita Choy

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