OGGN says… ExxonMobil endangering Guyana and Caribbean by exceeding safe production limits

Feb 22, 2023 News

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…says nation’s oil earnings could easily be wiped out

Kaieteur News – ExxonMobil has ramped up oil production activities offshore at the two Floating Production Storage and Offloading (FPSO) vessels currently operating in the Stabroek Block.

Just last week President of ExxonMobil Upstream Company, Liam Mallon revealed that Exxon is already producing 380,000 barrels per day (bpd) which is 40,000 barrels above the Liza Destiny and Liza Unity FPSOs name plate capacity. As though this was not alarming enough, he said that ExxonMobil Guyana is making preparations to produce an additional 20,000 barrels bpd over the vessels’ full capacity. Mallon explained that with further debottlenecking work which are ongoing; Exxon will be able to reach 400,000 barrels per day.

Weighing in on the subject, Darshanand Khusial a member of the Oil and Gas Governance Network (OGGN), said that these activities allow “Exxon to risk a major oil spill which would result in the bankruptcy of Guyana and other Caribbean nations.”

OGGN is an advocacy group that comprises of a number of Guyanese citizens who have been calling for better management of the oil and gas resources. Exxon has constantly warned in its Environmental Impact Assessments (EIAs) submitted to the Environmental Protection Agency (EPA), that an oil spill offshore can impact several Caribbean nations.

Khusial in a ‘letter to the editor’ reasoned that while over the past few months Liza One has been operating at about 150,000 barrels per day as per the government website, the Liza One EIA states on page 28 “a design rate of 100,000 barrels of oil per day (BOPD), with potential to safely operate at sustained peaks of up to approximately 120,000 BOPD.”

To this end, the activist questioned how operating 50 percent above the design rate can be safe. The OGGN representative was also keen to point out that an oil spill that occurred in the Gulf of Mexico back in 2010 was estimated to cost US$145 billion. On the other hand, he said Guyana has barely earned just over US$1 billion to date from its oil production activities- “a tiny fraction of what a major oil spill would cost.”

According to statistics provided by the Bank of Guyana, Guyana’s Natural Resource Fund (NRF) or the oil account held US$1,426,319,194 at the end of December 2022. The earnings for January 2023 have not yet been updated. Khusial argued that while the oil company claims “safety is a core value of ExxonMobil operations. We do not compromise safety standards to improve profits,” these equate to hollow words, especially since the oil company is yet to provide the country with a parent company guarantee for its Stabroek Block operations.  He argued that Liza One started production activities over three years ago and if ExxonMobil is confident in the safety of its oil operations in Guyana then this signing this guarantee should not have taken as long as it did.  Previously, the Former Head of the Environmental Protection Agency (EPA), Dr. Vincent Adams said ExxonMobil’s increase in production without conducting a fresh Environmental Impact Assessment (EIA) to examine the possible effects of same does not only violate safety standards, but also increases the risk of a potential oil spill.

The former boss of the EPA said even though Exxon and its subsidiaries might be making the necessary infrastructural adjustments to facilitate the increased production, it must first be approved by the EPA, and only after consultations are done with citizens.

He explained: “The most important thing that an EIA does is it defines the safety envelope for operating and when the EIA says that the safe amount is 120,000 if they want to pump more than 120,001 barrels per day they have got to go back to the EPA and convince the EPA that it is safe and it has to be open to consultations. They just cannot make that decision.”

For the Liza Destiny, the safety limit is 120,000 barrels of oil per day and for the Liza Unity, it is 220,000 barrels of oil per day. Head of ExxonMobil Corporation, Darren Woods admitted that these two vessels are operating beyond those limits. The company has said it has engaged in ‘debottlenecking exercises’ to allow for the increase.  Dr. Adams however believes this too is absolute nonsense. He said Exxon’s executives use such jargons as a mask for their unconscionable pursuit of obscene profits. He argued, “They are using this debottlenecking jargon to intimidate and confuse because they know most Guyanese don’t know fully what this type of lingo means. That terminology means that they widen the piping system and other equipment to increase the production. They try to make it seem that this is some industry norm but it is not. They can’t pull this nonsense in the USA- I know that for a fact.”

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• ExxonMobil, limit, oil, production, safety

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