Exxon’s accelerated production for 2023 continues to fuel oil spill concerns  

Aug 08, 2023 News

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Kaieteur News – ExxonMobil is driving oil production in Guyana at unprecedented rates. With outputs from the Liza Phase One and Phase Two projects in the Stabroek Block breaching their designed capacities, the sheer volume of production is staggering.

However, beneath these profitable figures lies a growing concern: Is ExxonMobil compromising safety in pursuit of increased profits?

The Liza Phase One project, which commenced in December 2019, originally had a nameplate capacity of 120,000 barrels of oil per day (bpd). Exxon then debottlenecked the project, lifting its capacity to 150,000 bpd. On some days, this even peaked at about 155,000 barrels.

Liza Phase Two, which began operations in February 2022, initially boasted a nameplate capacity of 220,000 bpd. Yet, official records have shown it sometimes producing more than 240,000 bpd. Plans are also underway to debottleneck Phase Two, post which the company expects the production to soar to 250,000 bpd.

Data reported by ExxonMobil to the Ministry of Natural Resources for the first half of 2023 paints an illuminating picture. With a cumulative production of nearly 70 million barrels for the first six months of the year, the combined daily production from both projects has averaged an astonishing 380,000 bpd. There were instances when the production peaked just over 405,000 bpd.

While these figures may be a testament to ExxonMobil’s operational prowess and Guyana’s rich oil reserves, they also bring to the fore an inevitable question: At what cost?

The oil and gas sector, particularly offshore drilling, has historically been susceptible to accidents, some of which have had catastrophic environmental and human impacts. The Deepwater Horizon spill of 2010 was one event that not only cost an oil company called BP over US$70B in damages but also had irreversible environmental consequences and a lasting impact on marine life.

The primary reason? A series of cost-cutting decisions and an insufficient safety system.

Research indicates that safety in the operation of oil projects isn’t merely a checklist item. It is pivotal in ensuring the welfare of the workforce, the environment, and the broader ecosystem. Moreover, as a number of other oil spill disasters have shown over the years, any compromise on this front can have dire financial and reputational repercussions for the company involved.

There is an inherent need to ensure that operations, particularly ones that have the potential for large-scale ecological impact, adhere to the strictest safety protocols. This ensures minimal risk of spills, which can be catastrophic not just for the environment but also for the communities and economies that depend on it.

As ExxonMobil accelerates its operations in Guyana, local and regional stakeholders have urged that the lessons from past disasters serve as a stark reminder and impetus of what not to do. Even Exxon’s stakeholders earlier this year, warned that growth in production, when unchecked, can sometimes be a double-edged sword. For the sake of the environment and for the long-term sustainability of its operations, they too have said it is imperative that Exxon prioritizes safety over sheer production volume.

In a world where corporate responsibility and environmental consciousness are becoming central to operations, local advocates like Kaieteur News Publisher, Glen Lall have said the onus is on giants like Exxon to set the right precedent. Lall, like many other concerned citizens, has warned about the need for Guyana’s oil story to not become another cautionary tale for the Caribbean Region.

Several government agents such as the Environmental Protection Agency (EPA) have said they are not deaf to these safety concerns. The EPA has assured for example, that there is an oil spill response plan in place for Exxon which complements the country’s plans for independent response.

Along with other initiatives, it has argued that some US$2.6B in insurance and affiliate company guarantees have been secured from Exxon for oil spill coverage. Exxon too has said it would not neglect its responsibilities for an oil spill, noting at a press conference some months ago that it has over US$20B in assets against which it can activate loans to cover costs associated with a spill.

Those provisions aside, citizens still continue to express concern about the accelerated pace at which Exxon is moving with its operations.

 

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• Exxon, Guyana, oil, project, Stabroek Block

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