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ExxonMobil to increase production at Liza One and Two – Govt. reveals
…as country still awaits full protection against oil spills
Kaieteur News – The Government of Guyana (GoG) has revealed that ExxonMobil Guyana Limited will be further increasing daily production at the two Floating Production Storage and Offloading (FPSO) vessels, Liza Destiny and Liza Unity.
The Liza Destiny was the country’s first FPSO and was designed to safely produce 120,000 barrels per day (bpd), however the GoG in its Mid-Year Report on the performance of the economy said that production has been ramped up to 153,000 bpd.
It explained, “On the production front, the sector experienced a rapid expansion in output from both producing FPSOs, when compared with the first half of last year, with ramped up output amid optimisation and maintenance scopes. As previously mentioned, the Liza Destiny FPSO produced at almost 153,000 barrels per day (bpd), on average, in the first half of 2023, compared with approximately 109,348 bpd last year.”
The government was keen to note that the platform recently underwent “additional optimization” works with plans in place to further ramp up production.
Table showing the FPSO Destiny design capacity for the Liza One Project (Source: ExxonMobil Guyana Limited EIA)
Meanwhile, on the second FPSO, Liza Unity, which was designed according to its Environmental Impact Assessment (EIA), to produce up to 220,000 barrels per day, production has been pushed beyond the vessel’s nameplate capacity.
The Mid-Year Report stated, “As it relates to the Liza Unity FPSO, production of crude oil averaged 226,500 bpd in the first half of this year, compared with 105,948 bpd from February 11 to June 30, 2022.”
Government indicated that the platform was subjected to the first phase of optimization works and is expected to produce at a whopping 35,000 bpd beyond its original design capacity. According to the Mid-Year Report, Exxon is expected to further ramp up daily production at the Liza Two project to 255,000 bpd in the second half of the year.
In unveiling plans to further boost oil production at the Stabroek Block, the administration pointed out that the third FPSO, Prosperity which will operate the Payara project is expected to startup in the fourth quarter of this year. Prosperity arrived in Guyana back in April 2023. Presently, commissioning activity is ongoing. Once operational, the three projects will produce a combined daily output of more than 560,000 bpd.
The Prosperity FPSO was designed to safely produce up to 220,000 bpd according to the EIA submitted by ExxonMobil. Even though the project is yet to commence, the developer has already announced its intent to produce above the design capacity.
Vice President and Production Manager, Mike Ryan during Episode 29 of ‘Access ExxonMobil Guyana’ shared, “Once we have achieved that critical milestone of background flare then we will increase production, up in the range of over 200,000, 220-230,000 barrels a day, so that will be towards the end of the year into 2024.”
Table showing the design rates for the Liza Unity FPSO operating the Liza Two project (Source: ExxonMobil Guyana Limited EIA)
The ramping up of petroleum production would spark further worry among local stakeholders who have been protesting against the lack of a signed guarantee from the parent company of ExxonMobil Guyana, to assume liability in the event of a large spill in the Stabroek Block.
Presently, Guyana only has a US$600 million oil spill insurance package per event that is provided by a company wholly owned by ExxonMobil. Two citizens had taken the Environmental Protection Agency (EPA) to Court for failing to enforce the requirements of a Permit granted to the developer, requiring an unlimited parent company guarantee to prevent Guyana from being burdened with cleanup and compensation costs associated with a large spill above the insurance policy.
The parent company guarantee in this case is especially important since the large-scale oil production activities can impact several of Guyana’s Caribbean neighbours. One international expert has estimated that US$40 billion of economic activity in the Region is at risk. Notably, Guyana has been merely earning just over US$1B annually from the Stabroek Block activities.
High Court Judge, Justice Sandil Kissoon had ordered Exxon to supply the signed unlimited parent company guarantee however his ruling has been appealed. The matter is still ongoing before the Court of Appeal.
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