The Environmental Protection Agency (EPA) has renewed the Environmental Permit for the Liza Phase 1 Project within the Stabroek Block, Offshore Guyana, for a further period of five (5) years.
Liza 1 Environmental Permit came six months ahead of the May 31 expiry date and was renewed just before expiration.
In a release, the EPA explained that after following with Environmental Protection Act Cap 20:05, and also with the consideration EPA’s careful consideration of Esso Exploration and Production Guyana Limited’s (EEPGL) compliance with the first iteration of the Environmental Permit for the Liza Phase 1 Project permission was granted.
The Liza Phase 1 Project was the first petroleum development project to have been permitted in the Stabroek Block.
According to the EPA, progressing from the knowledge and experience gained during the course of this project, the renewed permit specifies further conditions and standards which will ensure that all environmental and social safeguards are taken for the protection of human health and the environment.
With this new found knowledge, the EPA has noted that new regulations and fines will be imposed in the new agreement.
These include flaring and venting, which would be strictly prohibited routinely but will be allowed during commissioning, start-up and special circumstances.
Additionally, the permit will also focus on imposing a fine of US$50 per tonne of carbon dioxide equivalents (CO 2 e) emitted as a result of flaring in excess of permitted periods which is said to be the highest sum to be levied in the event flaring is above stipulated limits.
It is payable in these circumstances, progressing from US$30 under the first Environmental Permit (modified) for the Liza Phase 1 Project.
On the side of financial assurance also, EEPGL is held liable for all costs associated with clean up, restoration and compensation for any pollution damage which may occur as a consequence of the project.
The EPA further explained that EEPGL is also required to have Financial Assurance which includes a combination of Insurance that must “cover well control, and/or clean up and third-party liability on terms that are market standard for the type of coverage”, and a Parent Company/Affiliate Guarantee Agreement which indemnifies and keeps indemnified the EPA and the Government of Guyana in the event EEPGL and its Co-Venturers fail to meet their environmental obligations under the Permit.
Furthermore, the financial assurance provided must be guided by an estimate of the sum of the reasonably credible costs, expenses, and liabilities that may arise from any breaches of this permit.
Also, Liabilities are considered to include costs associated with responding to an incident, clean-up and remediation and monitoring.
On the side of Monitoring, the permit makes provision for the targeted monitoring of the effects of effluent discharges from the Project within the Area of Influence.
The effluent streams to be monitored include, but are not limited to produced water, bilge water, cooling water and grey water and also the permit requires the submission of the effects of these discharges every six (6) months.
Further, EEPGL is required to submit safety case information, including a Risk Assessment prior to the drilling and development of wells.
On the side of its grievance mechanism, EEPGL is also enjoined to establish and maintain a Grievance Mechanism in keeping with the World Bank’s Approach to Grievance Redress in projects, to ensure that complaints from individuals and communities who may be affected by the project are received and addressed. There is a requirement for reporting the same and what actions were taken to address the grievances to the EPA.
The Liza discovery was announced in May 2015. Liza-1 well was the first significant oil find offshore Guyana.
It encountered more than 295 feet (90 meters) of high-quality oil-bearing sandstone reservoirs. It was safely drilled to 17,825 feet (5,433 meters) in 5,719 feet (1,743 meters) of water.
The Liza Phase 1 development is approximately 190 kilometers offshore in water depths of 1,500 metres to 1,900 meters.
The project includes a floating production, storage and offloading (FPSO) vessel, Liza Destiny; designed to produce up to 120,000 barrels of oil per day, with a storage capacity of up to 1.6 million barrels.
There are four drill centers with 17 wells in total; eight oil-producing wells, six water injection wells, and three gas reinjection wells.
