AFC demands on-site monitoring of oil production

Aug 29, 2023 ExxonMobil, News, Oil & Gas

…says Guyana could lose millions daily by relying on Exxon data

Kaieteur News – To ensure that the country is not cheated out of its already measly share of profits from the Stabroek Block deal, the Alliance For Change (AFC) is demanding the Government implements an on-site monitoring system to verify the volume of oil being produced daily offshore Guyana.

AFC spokesperson on Petroleum matters, Dr. Vincent Adams

Former Head of the Environmental Protection Agency (EPA) and executive member of the AFC, Dr. Vincent Adams on Monday told Kaieteur News that while government is embarking on a plan to verify the oil production using data acquired from ExxonMobil, the country could be preparing to lose millions daily.

Earlier this month, Vice President (VP) Bharrat Jagdeo announced that government will construct a state-of-the-art operations center that will be fed information from the oil company to verify oil production data.

During a press conference, Jagdeo said, “On issues relating to production verification, we said that Exxon is building an operational centre as part of the head office. They are gonna have a fiber optic cable coming in, we may have to get access to the fiber or in the short-term, we will probably use satellite technology to have an independent measuring of the flows and everything else.”

However, Dr. Adams is not convinced that the fiber optic system is robust enough to provide Guyana with accurate data on what is being produced.

“No fiber optic cable is going to be able to assist you with verifying what exactly is being produced out there. What they, Mr. Jagdeo and the Government, are doing is totally relying on ExxonMobil’s system to provide them with accurate information and that is not a foolproof system,” he said.

Dr. Adams said that instead of depending on Exxon, government should invest in monitoring and verification personnel, trained to work 24 hours on-site the Floating Production Storage and Offloading (FPSO) vessels.

He explained, “These people will be trained to check the calibration system (to make sure) that the oil is being measured by as it comes up that way. We will be in a better position to verify whether the reading on the meter used by Exxon is accurate. Verification cannot happen from some room using a feed from a cable Exxon gives to watch its production meter. Who is to say that the data will not be tampered with?”

The former EPA head who is a Petroleum Engineer pointed out that meters being used to measure oil production can be faulty. According to him, “These systems have error bands and if there is a fault in the metering system what it means is even if one percent of oil is not accounted for, based on the 400,000 barrels of oil production per day, Guyana can end up losing millions on what is already not a favourable oil deal.”

He noted that failing to verify production data from Exxon could deprive the nation of an opportunity to independently confirm the number of barrels being produced offshore daily. By utilizing a cable from Exxon, the Dr. Adams said Guyana would be blindly accepting the production rates which could be grossly understated by the oil companies.

For this reason, Dr. Adams said while he was Head of the EPA, The World Bank had given a USD $1 million grant to assist the Agency with the establishment of a Petroleum Unit to address oil and gas matters.

“The World Bank assisted us in putting together a Petroleum Unit…the proposal was to have 36-member high powered team of experts in that unit just to cover petroleum offshore…this would include petroleum engineers, geologists etc.,” he added.

Dr. Adams said the structure of the Unit is based on other models around the world. After being fired from the EPA, Dr. Adams said the efforts to put the unit together did not continue.

“The current administration did their best to do away with the document and the recommendations because clearly, they are not truly interested in a proper system to track our oil production,” said the former EPA Head.

In the meantime, the Vice President seems confident in the plan to access the data that Exxon will be receiving at its new Headquarters at Ogle, East Coast Demerara (ECD).

During his press conference earlier this month, the former Head-of-State pointed out that the new PSA will strengthen the government’s ability to manage the industry since it would force oil and gas companies to produce pertinent data.

According to Jagdeo, this would give the regulators “a better real-time picture of the industry”.

He was keen to note that the use of this technology would verify the discharge waters and oil flows, along with other relevant data related to production on the FPSOs.