ExxonMobil flaring above levels set by EPA after first mishap

Feb 09, 2021 News

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– Abruptly ends press conference

By Kemol King

Kaieteur News – ExxonMobil Guyana yesterday held a closed press briefing during which it told media operatives that flaring is now at about 16 million cubic feet of gas per day.
“So we are currently producing around, as the Minister said, around 120,000 barrels per day,” ExxonMobil Guyana President, Alistair Routledge, said in his opening address. “At that level, we’re currently flaring about 16 million cubic feet per day.”
It is notable that this is higher than the rate of flaring early last year when former Head of the Environmental Protection Agency (EPA), Dr. Vincent Adams, slashed ExxonMobil’s production at the Liza Phase One project to reduce the environmental destruction of flaring. Dr. Adams had cut production low enough that Exxon was flaring 12-15 million cubic feet per day.
When asked how ExxonMobil justifies flaring above this precedent set by Dr. Adams, Routledge pointed to a need for revenues for Guyana.
“We’re working with the EPA and the Ministry of Natural Resources, GGMC,” he said, “to ensure we’re striking the right balance for Guyana. None of us are happy to be flaring above the pilot.”
“But we all know the times that we live in. It’s challenging times. COVID-19 has shut down a lot of businesses, revenues for the country, and so it’s important that we can do our part to contribute. So that’s what we’re trying to do, work with the government to find the right balance.”
“We’re not happy to be where we are. We’re just trying to find the right balance for Guyana that ensures that we’re still generating revenues for the country while minimizing the amount of impact that comes with that. And so, you know, that’s the balance that we struck at the moment.”
To flare at this rate, ExxonMobil had claimed in a previous operational update that it reduced production levels since it started flaring above pilot – the minimum level of flaring required for a safe operation. In that February 5 update, ExxonMobil gave no numerical detail of what the production levels were. When asked at the time to provide the figures, ExxonMobil’s Government and Public Affairs Advisor, Janelle Persaud, refused.
However, details provided to Kaieteur News by Minister of Natural Resources, Vickram Bharrat and Vice President, Dr. Bharrat Jagdeo, indicated that ExxonMobil had been producing at 120,000 barrels per day – the nameplate capacity of the operation – as late as two days before the operational update was provided. ExxonMobil had been flaring above pilot for about a week, by then.
The lingering question on the minds of political commentators and journalists after this was – If production is at nameplate capacity and ExxonMobil claims to have lowered production, is the company lying to the Guyanese public?
Some coaxing from a reporter during yesterday’s briefing led Routledge to reveal that leading up to the moment ExxonMobil noticed the equipment defect, the Liza Destiny Floating, Production, Storage and Offloading (FPSO) vessel was producing about 130,000 barrels of oil per day. This appears consistent with statements made by Chief Operating Officer of Hess Corporation, Gregory Hill, during an earnings call last month, that ExxonMobil intends to evaluate options to increase the nameplate capacity of the vessel. He had said that the operation is producing better than thought and that ExxonMobil was producing about 127,000 barrels per day in January. However, he had said that the piping changes and debottlenecking ExxonMobil planned to do to increase the production capacity of the vessel, wouldn’t occur until the third quarter of 2021.
Routledge informed reporters yesterday that ExxonMobil was already conducting higher production tests in January, but sought to note that the equipment failure is not linked to any higher production capacity test that ExxonMobil was doing.
Nevertheless, “In order to minimise flare, we have cut back from those higher production tests,” Routledge told reporters yesterday.
There are many lingering questions following ExxonMobil’s press engagement yesterday, but it was abruptly ended after the brief question and answer segment. This segment had followed a relatively lengthy presentation given by the production manager, Mike Ryan, about the design of the FPSO, which was substantially unrelated to the specific concerns raised by the press in the days leading up to this engagement.
Routledge said the company will issue updates every two days or so on the developments related to flaring and the defective gas compressor.
During cursory consultations following the press briefing, an expert knowledgeable about the industry told Kaieteur News that Exxon’s numbers don’t appear to make sense. For example, ExxonMobil’s production was at 30,000 barrels of oil per day when Dr. Adams mandated a reduction in production last year. The corresponding rate of flaring was 12-15 million cubic feet per day. Now, the production level is 120,000 barrels a day with a rate of flaring of 16 million cubic feet per day.
Kaieteur News will seek answers from ExxonMobil on this and other unclear developments. Ryan said he understood journalists wanted a detailed understanding of the equipment defect, but added that the issue is complex. Even ExxonMobil’s understanding of the issue at this point appears to be less than comprehensive, if this briefing is any indication.
“What we do know is that the seal failed,” Ryan told Kaieteur News. “What we don’t know is why it failed, and there may be something else in the machine that we discover, and ask why we need to get the machine where the experts are, and do a full assessment and then we’d be able to make decisions based on the facts. We don’t know it all. The machine is highly complex but it’s very sensitive as well, and we wanted to bring it over to a controlled environment and make sure we open it and see exactly what’s going on in there so we can piece the issues together and get to the root cause and make sure that when we do fix it, it comes back as [reliable].”
ExxonMobil has, as had also happened after the last mishap, removed the defective gas compressor and sent it to Germany for a diagnosis from the manufacturer, MAN Turbo, in Germany. Asked how long it would take to receive a diagnosis, both Routledge and Ryan gave an estimate of about eight weeks.
In the meantime, Routledge said, ExxonMobil will work as much as it can to find other ways to reduce the flaring.
He said, “But at the same time, Mike and the team are working incredibly hard trying everything they can do in the process to tweak the process to further reduce that flaring if, at all, possible… Clearly, we do not want to have extended flaring of any significance.”

 

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