ExxonMobil ignores Guyana’s flaring, gas leak troubles during earnings call

May 01, 2021 News

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…says Stabroek Block production up 70% from last year
…boasts to investors about climate friendly operations

Kaieteur News – Executives of US oil major, ExxonMobil, on Friday during the company’s first quarter earnings call for shareholders and investors, boasted of reduced emissions from their operations globally and has in fact credited the first quarter of the year, as being its most reliable and best managed operations ever.
Its reports however, did not acknowledge the company’s troubles in Guyana, where the Flash Gas Compressor, onboard the Liza Destiny—Floating Production, Storage and Offloading (FPSO) vessel—has led to numerous instances of flaring of toxic pollutants into the atmosphere from its Stabroek Block operations.
Addressing the shareholders on Friday, Chairman of the Board of Directors, Darren Woods, instead focused on the production aspect of the Stabroek Block producing field to report that compared to the previous quarter, the crude coming out of the Stabroek Block was up 70 per cent. He concluded by telling shareholders that the Guyana resource basin provides “a very rich set of opportunities.”
In light of its most recent discovery, it was reported too that the company was not looking to hit a “big bang” reservoir but is rather seeing a “steady progression of bring opportunities to market.”
Having provided an overall layout of the company’s financial position including some US$4B in savings with a projection of between US$16B and US$19B in spending this year, Woods also addressed the company’s climate initiatives including its pursuit of carbon capture, and other such technologies.
According to Woods, the company has maintained, “strong dividends, generated strong cash flow, delivered further cost reductions, and remained flexible and disciplined in capital spend.”
More importantly, he noted that the company has been able to, “deliver excellent safety, environmental and reliability performance and advanced solutions for a lower carbon economy.”
As it relates to the reduction of the risks inherent with the fossil fuel industry, the ExxonMobil Chairman told investors that the company’s strategy in addressing the risk of climate change and the energy transition begins with mitigating emissions “in our operations which has been a focus for decades.”
He told investors that compared to 2016, the company last year saw its emissions down 20 percent and that ExxonMobil met the methane and flaring reductions it committed to in 2018 and even established an aggressive emission reduction plans through 2025. He said this puts the company on a trajectory consistent with the goals of the Paris agreement.
Significantly, the Chairman in his report never mentioned the flaring and gas leak problems that were encountered in recent weeks in the Stabroek Block.
It was the Chief Executive Officer (CEO) of Hess Corporation, John Hess, who this past week spilled the proverbial beans on the Stabroek Block operations when he disclosed that on April 11, last, oil production was curtailed for several days after a gas leak was detected in the Flash Gas Compressor’s discharge silencer onboard the Liza Destiny FPSO.
ExxonMobil, the operator of the Stabroek Block, had in announcing the problem, alluded to issues being encountered but did not disclose that it was in fact, a dangerous gas leak that had curtailed the operations briefly.
Hess gave the disclosure during the first quarter earnings call held for his company’s shareholders.
According to Hess, production at Liza Phase One had run at its full capacity of 120,000 gross barrels of oil per day during the first quarter of the year up until the leak.
Production, he said, has since ramped back up and is expected to remain in the range of 100,000 to 110,000 gross barrels of oil per day, until repairs to the discharge silencer are completed in the next three months.
Following the repairs, he said, “production is expected to return to, or above [the] Liza Destiny’s nameplate capacity of 120,000 barrels of oil per day.”
The Company’s Chief Operating Officer, Gregory Hill, in addressing the gas leak for shareholders, disclosed that SBM Offshore—the FPSO builder—has already placed an order for an upgraded flash gas compression system, which is expected to be installed in the fourth quarter of 2021.
As such, according to Hill, “once the flash gas compressor is replaced, we are confident that we will see a significant improvement in uptime reliability.”
He disclosed that “upon reinstallation and restart of the flash gas compression system—expected in approximately three months—production is expected to return to or above nameplate capacity of 120,000 barrels of oil per day.”
According to Hill, the damaged flash gas compressor is now in Houston, Texas, where it is “being torn down and looked at with the expectation that it will be restored within the next three months.”
He posited, “…once that happens, then we’ll get back to that 120,000 barrels a day plus.”
Additionally, he pointed out that in the fourth quarter of this year, ExxonMobil is going to replace the existing flash gas compressor with some of the components that have been redesigned, “so that shutdown in the fourth quarter—about 14 days—will accomplish those few things.”
Meanwhile, Steven Littleton, ExxonMobil’s Vice President of Investor relations, in his report yesterday, said that with regards the company’s two most prolific blocks at the moment reported that Guyana and Permian production were essentially flat versus the fourth quarter of 2020; however, compared to the first quarter of 2020, Permian Production was approximately 20 percent higher, excluding the impacts of the Winter Storm and an average of around 395,000 oil equivalent barrels per day in the quarter.
Importantly, Guyana production, he said, increased by approximately 70 percent or 19,000 barrels per day over the same period.

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