Over US$10M in flaring fines paid by ExxonMobil

…Liza 1 & 2 currently at 220,000 barrels per day

ExxonMobil affiliate Esso Exploration and Production Guyana Limited (EEPGL) has finally installed its new flash gas compressor on the Liza Destiny Floating, Production, Storage and Offloading (FPSO) vessel and reduced its flaring, but not before having to pay out over US$10 million in fines to the Environmental Protection Agency (EPA).

EEPGL Production Manager Mike Ryan

On Tuesday, EEPGL Production Manager Mike Ryan shared information with the media on the Liza Destiny FPSO that services the Liza Phase 1 development. He explained that since Exxon installed a new flash gas compressor on the vessel, flaring has been reduced to pilot levels.
“I’m really happy to say that we met our expectation of delivering, installing and starting it up in July. And we’ve achieved background flare now on Liza Destiny. It’s a remarkable accomplishment by quite a lot of people, over a journey that has been challenging. But relentlessly pursuing the background flare target and really happy to say we’ve achieved that.”

Exxon Headquarters

“The operation on Liza Destiny has been going smoothly, very safe operation. We’ve gone over a thousand days now without a recordable incident, which is really world class performance. And we should be really proud of all the Guyanese working on Liza Destiny,” Ryan said.
He noted that in the wake of some production optimisation, they are currently producing approximately 140,000 barrels per day on the Liza Destiny, which is above their regional targets. Combined with the Liza Unity FPSO, both the Liza Phase 1 and 2 projects are producing over 220,000 barrels of oil per day.
The production manager further revealed the cumulative fines Exxon has had to pay to the Environmental Protection Agency (EPA), which confirmed the increased fines in May when the updated permit for Liza 1 took effect. According to him, up until June over US$10 million in flaring fees have been paid.
According to Ryan, they are in an endurance run where they observe how the flash gas compressor is performing. When it comes to the old flash gas compressor, Ryan said this would be upgraded in Germany and then used as a spare.
Last year, the US oil giant had sent the Liza Destiny gas compressor for repairs in Germany after it developed technical issues, resulting in increased flaring. But after reinstallation in April, technical issues were still encountered, forcing the company to significantly drop production to as low as 30,000 barrels per day.
By May, production went up and flaring was at approximately 15 million standard cubic feet of gas. Over the following months, Exxon had brought the compressor online and cut down its flaring by 96 per cent.
Last year, Ryan had explained that there were six operational gas compressors including the flash gas compressor, two main ones and injection gas compressor, and that flaring had been reduced to approximately 6 million cubic feet per day.
The oil company had said that a new redesigned flash gas compressor was being manufactured. This compressor, the company had said, would reduce flaring once it arrived in the country. The compressor in question arrived in Guyana this year.
Exxon has come under criticism over its increased flaring in recent years, with environmentalists up in arms over the harmful effects it has on the environment. When the EPA started reviewing the Environmental Permit for the Liza 1 development, the agency had said that they were looking to include some strong measures aimed at preventing any activity that could harm the environment.
Last year, the EPA had amended 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 vessel on two separate occasions in 2021.
The regulatory body engaged EEPGL to modify the permit back in May 2021 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 A Partnership for National Unity/Alliance For Change (APNU/AFC) Administration. At the time, a cost of US$30 per ton of carbon emission was agreed upon, but the fee was then increased to US$45 during discussions with the operator over the August-September 2021 period. (G3)