Auditors unable to determine how much Exxon charges Guyana for dumping toxic water into ocean

Oct 28, 2023 ExxonMobil, News, Oil & Gas

Kaieteur News – A team of local and international auditors have been unable to ascertain how much money ExxonMobil Guyana Limited removes monthly from the Stabroek Block account to cover bills it claims are for treating and dumping produced water into the ocean.

Research indicates that produced water in the oil and gas sector refers to the water that comes up from underground along with oil or gas during their extraction. It is a mixture of water that existed naturally in the oil or gas reservoir and additional water that was injected into the reservoir to help push the oil or gas to the surface. This water often contains various toxic chemicals, minerals, salts, and other impurities, so it needs to be treated or managed before it can be reused, discharged, or disposed of in any fashion.

During their assessment of US$7.3B in expenses Exxon incurred from 2018 to 2020 in the Stabroek Block, auditors attached to Ramdihal & Haynes Inc., Eclisar Financial, and Vitality Accounting & Consultancy Inc., with backing from Martindale Consultants said they could not determine how much Exxon was charging Guyana for dumping produced water.

Auditors said they saw no specifically identified operating costs for the Liza Destiny Floating, Production, Storage and Offloading (FPSO) vessel leased to Exxon by SBM Offshore through a subsidiary. Auditors said services for the FPSO are billed in large sums on one or two monthly invoices. However, there is no breakdown of the expenses.

“Our research also indicates that the Contractor (Exxon) was to conduct a cost-benefit analysis of re-injecting produced water (into a separate well) vs. treating and overboarding such water for the Payara development (Exxon’s third oil project in the Stabroek Block) and was required by the Guyana Environmental Protection Agency (EPA). We do not have any information about whether this study was completed or its results,” the auditors said in their report.

As noted before, produced water contains several impurities which can include acids, waxes, and mineral oils. It may also be mixed with inorganic metals and byproducts or with trace amounts of heavy metals and naturally occurring radioactive materials. It is also usually very high in temperature and can be deadly to marine organisms.

Due to its toxicity, several leading organizations such as the World Bank have recommended that produced water be re-injected into the wells. Though this may be a costly exercise, it is considered the most environmentally friendly option. Such grounds have not been compelling enough for ExxonMobil which has insisted on dumping produced water into the ocean from the Liza Phase One and Liza Phase Two Projects.

For Exxon’s Payara development, set to come on stream later this year and produce 220,000 barrels of oil per day, local authorities had ordered that Exxon investigate the feasibility, benefits and implications of re-injecting produced water. The outcome of that probe would determine whether Exxon would continue dumping produced water or would be forced to re-inject. The EPA is yet to reveal to the public whether Exxon is compliant in completing the said study.

It should be noted that the audit report prepared by Ramdihal & Haynes Inc., Eclisar Financial, and Vitality Accounting & Consultancy Inc., with backing from Martindale Consultants, is yet to be released to the public. Kaieteur News had explained that this audit only examined a sample of the US$7.4 billion bills.

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Eclisar Financial, ExxonMobil Guyana Limited, Guyana, Ramdihal & Haynes Inc., Vitality Accounting & Consultancy Inc.

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