Oil and gas sector: Guyanese will experience more benefits in coming years – ExxonMobil
…says activities in Region 3 to soar in 2022
In response to recurring issues with the flash gas compressor on the Liza Destiny Floating, Production, Storage and Offloading (FPSO) vessel, ExxonMobil Guyana will be replacing the piece of equipment with a redesigned model that would reduce flaring below pilot levels.
“At ExxonMobil Guyana, our teams strive for continuous improvement in our operations and environmental performance. In early 2022, we expect to install a new redesigned flash gas compressor on the Liza Destiny, and we will commission the gas injection system on the Liza Unity utilising lessons learned from our first project,” the company’s President, Alistair Routledge, said in a statement on Thursday.
The United States oil giant had been under fire over its increased flaring activities in recent years, with environmentalists going up in arms over its harmful effects on the environment. In fact, this activity had forced the Environmental Protection Agency (EPA) to amend the Environmental Permit for the Liza 1 Development Project after the oil company had been flaring excessively following technical issues with its gas compressor on the Liza Destiny FPSO on two separate occasions earlier this year.
The regulatory body modified the permit back in May to include specific regulatory requirements for flaring of associated gas offshore Guyana, in accordance with the EPA’s legislation. These were missing from the original permit that was issued under the previous APNU/AFC administration.
At the time, a cost of US$30 per ton of carbon emission was agreed upon, but this fee has since been increased to US$45. So far, the EPA has received over US$400 million for two separate flaring applications from Exxon’s local affiliate, Esso Exploration and Production Guyana Limited (EEPGL), which has since been granted approval to flare for a third period.
Natural Resources Minister Vickram Bharrat had previously said Government had engaged Exxon to ensure that the Unity FPSO, which arrived offshore Guyana in October, and then Prosperity, slated for arrival in early 2024, do not encounter the same issues as the Liza Destiny.
The Minister had pointed out that the adjustment is needed since both the Liza Destiny and Prosperity are designed to produce 220,000 barrels of oil per day – almost twice the amount of the Liza Destiny. However, Exxon has overcome these challenges with the flash gas compressor, and is now experiencing “steady, continually safe operations” on the vessel.
According to Routledge, production on the Liza Destiny remains above 120,000 barrels per day, while the flare is maintained at regulatory required levels.
ExxonMobil Guyana started production on December 20, 2019 in the oil-rich Stabroek Block, where the recoverable resource has been estimated at approximately 10 billion oil equivalent barrels. This was as a result of the oil company recording multiple discoveries in the Stabroek Block in 2021.
There are six drill ships and now two FPSO vessels in the Stabroek Block offshore Guyana, which are supported by hundreds of persons at any given time.
According to Routledge in the missive, Exxon has had a safe year of operation with the crew onboard the Liza Destiny FPSO, having gone for more than 800 days without a recordable incident.
“It is a value for us that people are looked after and that the workplace is safe. We take care of one another,” he pointed out.
Moreover, Routledge has classified 2021 as an outstanding year for ExxonMobil Guyana, despite the challenges of the COVID-19 pandemic.
“We have been able to overcome operational issues and deliver on volume targets, including five cargos to the Government of Guyana. We’ve also continued our wonderful exploration success. Again, people tend to forget that this is a frontier exploration acreage and we shouldn’t expect the kind of success we’ve seen,” Routledge outlined.
According to the lead country manager, there is work ongoing to ensure that Guyanese are continually benefiting from the production of the country’s oil and gas resources. To this effect, significant efforts have been made to hire the necessary skills, utilise suppliers, and ensure that the capabilities are developed to support the needs of the industry.
There are now 3,270 Guyanese supporting the company’s petroleum operations, an increase of more than 1,000 since this time last year. ExxonMobil Guyana and its prime contractors have also spent more than US$540M with over 800 unique Guyanese vendors.
“It is very important to us that the people of Guyana benefit from our operations, not just from the revenues that are generated to the Government, but also directly through the implementation of the projects,” Routledge expressed. “We expect over the coming years for more and more benefits to reach more people.”
He pointed to the Gas-to-Energy project, which is led by the Government as another such opportunity. “In 2022, as the gas-to-energy project moves forward, we anticipate that there will be a lot more activities in Region Three. So, it won’t be just Georgetown, it will be reaching other parts of the country as well.”
The launch of the Gy$20 Greater Guyana Initiative in February 2021 has been another tangible expression of ExxonMobil Guyana’s commitment to bringing value to the lives of Guyanese. It is a 10-year pledge by the Stabroek Block Co-venturers to support capacity building.
Work has been ongoing with key technical, vocational education and training (TVET) institutions and the University of Guyana, while several new projects have been initiated and will be announced in the coming weeks.
“I think the most significant achievement of 2021 is that the entire business was able to move forward and essentially meet all of our commitments, which, in the face of the pandemic and all the other challenges we’ve seen in the last year, is really outstanding. It speaks to the resilience and perseverance of everyone who is involved in this industry, including the Private Sector, community partners, and the Government of Guyana,” Routledge has expressed.