Latest update February 2nd, 2025 6:24 AM
May 11, 2022 News
By Kiana Wilburg
Kaieteur News – Since 2017, Kaieteur News has been at the forefront of highlighting the absence of provisions in the Stabroek Block Production Sharing Agreement (PSA) which preserve the country’s right to verify how ExxonMobil measures oil offshore.
It appears, however, that the PPP/C Administration has been able to plug this loophole without renegotiating the lopsided deal. The government has done so by inserting a suite of robust provisions on measurements into the Petroleum Production Licence (PPL) for Exxon’s US$10B Yellowtail Project.
According to the 69-page PPL, ExxonMobil’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL) is required to measure and weigh the volume, quality and composition of all petroleum won and saved from the Yellowtail Production Area, using measurement appliances and procedures in accordance with good international oilfield practices, the development plan, and as from time to time, approved by the subject minister.
The document stipulates that the licensee is required to provide to the subject Minister, reasonable written notice of the conducting of measurements, and an opportunity to attend or to have one or more representatives attend the measurements on his behalf.
Furthermore, EEPGL is required to provide the minister, reasonable and written notice and the opportunity to be present, either in person, or through a representative(s) whenever a piece of equipment or an appliance for measuring or weighing crude oil or gas is being calibrated, re-calibrated, tested, compared, measured or weighed against a standard. The PPL states that the said activities shall be conducted in accordance with accepted methods and procedures consistent with good international oilfield practices and as previously approved in writing by the subject Minister.
Additionally, EEPGL is not to make any alteration in the method or methods of the measurements used or in any equipment or appliances used for that purpose without the prior consent in writing of the minister, and the minister may in any case require that no alteration shall be made save in the presence of a person(s) authorised by him.
Kaieteur News understands that EEPGL shall carry out tests and examinations of any measuring or weighing appliance tested or examined in such manner, upon such occasions or at such intervals and by such means, in any case, as may be specified as directed by the Minister.
Finally it is also expected to submit the facility’s metering system design within 180 days of the date of the PPL being awarded (April 1, 2022). This newspaper understands that such submission shall include all relevant schematics, specifications, expected maintenance and calibration programmes, and justification of the selected design.
In addition to the PPL provisions, the Guyana National Bureau of Standards (GNBS) is also taking steps to increase its role in the oil sector. Broadly, the National Standards Body is responsible for the monitoring of measurements on the Liza Destiny and Liza Unity Floating Production Storage and Offloading (FPSO) vessels.
Kaieteur News had reported that in January 2020, an official order was gazetted for the GNBS to perform the functions of measuring and certifying crude oil being lifted on-board the FPSO. Since then, GNBS Inspectors on a rotational basis, travel to the offshore vessel to conduct the requisite monitoring activities.
In 2021, the GNBS had established an Oil and Gas Department to better streamline these activities and monitor the sector.
Importantly, GNBS monitoring activities in the sector are done in accordance with the American Petroleum Institute (API) Standards, which are recognised globally. These standards relate to the Accuracy of flow meters, Tank Gauging, Sampling and testing of Crude. To ensure access to these standards and other crucial benefits, in mid-2021 the GNBS fortified its relationship with the API by signing a Memorandum of Understanding (MoU) with them.
Regarding crude testing, the Bureau had previously announced its intention to fully take over this responsibility to determine a number of quality parameters. In fact, the Bureau commenced this service in the first quarter starting with two of five parameters. With the acquisition of additional equipment, in the short-term, capacity will be fully built to test for all of the parameters. Crude testing would be done to determine density and viscosity, basic sediments and water, salt in crude, hydrogen sulphur in crude, and water content.
The GNBS with support from the Government of Guyana and other partners in standardisation has said it will continue to directly ensure that its measurement and testing services are provided onshore and offshore to protect the interest of the nation.
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