Guyana now only oil-producing nation in region equipped with capping stack

With the commissioning of ExxonMobil’s capping stack on Tuesday, Guyana is now home to the only capping stack in the region and one of only 13 in the world, as part of the oil company’s arsenal of defences in the unlikely event of an oil spill.
The commissioning of this long-awaited capping stack was done at the Guyana Shore Base Incorporated (GYSBI) facility at Houston, East Bank of Demerara. The capping stack, which Exxon acquired as per its subscription with Oil Spill Response Limited (OSRL), is used to plug oil leaks on the subsea floor.
The equipment, which is brand new, is placed over the blown-out well to stop oil from spilling. Exxon is required to have this equipment in the country as part of the Yellowtail Permit. In his address, ExxonMobil Guyana President Alistair Routledge noted that this is the latest piece of advanced technology to be added to his company’s oil spill response arsenal, the other components of which are also housed at GYSBI.
“This capping stack, which we’re going to take a look at and inspect today [Tuesday], is one example of those in-country technology capabilities. I want to thank GYSBI, for hosting us here today. And for housing this important piece of equipment for Guyana.”

“GYSBI also houses our container booms, skimmer devices, dispersants and numerous other components of the extensive emergency response toolkit that we have placed here since we began our operations.”
Routledge also expressed hope that other oil operators will follow suit and subscribe to capping stack services as well as he noted that while the capping stack was commissioned at GYSBI, it is likely to be eventually moved to the Vreed-en-Hoop Shore Base Incorporated (VEHSI), with whom Exxon has a US$300 million agreement, to receive shore base services for its Yellowtail and other planned projects.
“ExxonMobil Guyana is proud to be the inaugural subscribers to this new, Guyana-based capping stack service, provided by OSRL. It’s our hope that operators, both in Guyana and neighbouring countries, subscribe to this service. Because that will truly reflect the benefit of bringing this technology to the region, if all operators drilling wells in this part of the world, subscribe to the technology we’ve brought into Guyana.”
We certainly expect never to use this equipment in real life, but we will continue to look after it, preserve it, whether here at the Guyana Shore Base, or in the future at the Vreed-en-Hoop Shore Base, ensuring that it is always prepared for deployment and we have people prepared and ready to do so,” Routledge explained.

Deployment time
The Yellowtail permit had provided for Exxon to deploy a capping stack within nine days. When asked about the deployment time now that the capping stack is in country, however, Routledge made it clear that it should only take a few days. Routledge explained that the equipment can be ready to go within a short space of time. However, clearing the way for it is what will take up the most time.
“By bringing it here, what we’ve reduced is the time it takes to actually bring it in country. That isn’t really the critical path. It’s making sure that the offshore location is ready. So, usually debris removal is the critical path activity.”
“So, it’s within a few days… we will always have a vessel ready to go, to mobilise it. So, deploying it offshore… that isn’t the critical path. It’s making sure the offshore location is ready to receive it,” the executive said.
Meanwhile, the Environmental Protection Agency’s Head of Oil and Gas, Joel Gravesande, noted that Exxon’s procurement of the capping stack is in keeping with the requirements of their Yellowtail permit.
“But also, it will reduce the time, which is the most important thing. Whenever responding to an emergency, the time it takes to respond is vital. And having this capping stack, in country, the only one in the region and as they mentioned, one of only 13 globally, it will reduce our response time to capping a well, from nine days to three days, which will aid enormously,” he explained.
Last year, Routledge had made it clear that Exxon had set up a “long line of defences” to prevent oil spills from occurring. These include applying new technologies to the design of the wells, training personnel, and strict safety practices.
Meanwhile, in the event of an oil spill, it was explained that Exxon already has about US$20 billion in financial resources set aside to respond to such a “highly-unlikely” incident. Guyana also remains protected from any liability with other layers of defence should an oil spill occur.
For instance, there is a US$2 billion guarantee, to be tapped if Exxon’s insurance policy and its assets are not enough to respond to the impacts and fallout associated with an oil spill. The environmental liability insurance is US$600 million. Once this runs out, Exxon would have to rely on its assets and those of its Stabroek Block partners, Hess and CNOOC, to cover additional expenses.
In the wake of an oil spill off the coast of Tobago in February, which resulted in a massive clean-up effort by the Trinidad and Tobago Government, the People’s Progressive Party/Civic (PPP/C) Government had assured that legislation aimed at protecting Guyana from such liabilities would soon be forthcoming. (G3)