Guyana delays purchase of US$200K oil meters to monitor ExxonMobil’s daily production

Nov 12, 2023 ExxonMobil, News, Oil & Gas

---

Almost four years since first oil…

…but spends US$11.5M to buy boat to protect company’s operations

Kaieteur News – Since Guyana drew its first barrel of oil in December 2019, the country has allowed production to continue offshore Guyana in the absence of a meter to independently verify the quantity of oil being pumped daily by the operator of the Stabroek Block, ExxonMobil Guyana Limited (EMGL).

The country has not only allowed the oil giant to produce oil at its first project- Liza 1- without any supervision or verification systems in place, but also approved and commenced a second project- Liza Two- without implementing its own monitoring technology.

To this end, the Liza One- now producing an estimated 150,000 barrels per day (bpd) and the Liza Two, producing an average 250,000 bpd are not being monitored by the state.

Meanwhile, a third project, Payara is expected to come on stream before the end of this year, however, Guyana is yet to establish monitoring capabilities to keep watch on its vast oil reserves.

This publication was reliably informed that the necessary equipment to monitor the operator’s daily production can cost this country less than US$200,000.

A Positive Displacement Flow Meter or a (PD) Meter is largely utilized in the industry to measure the flow of oil.  The meters measure the volumetric flow rate of a moving fluid or gas by way of precision-fitted gears or rotors containing cavities through which precisely known volumes of fluid pass.

Research by this newspaper found that the meters are very accurate. According to Universal Flow Monitors (UFM), PD flowmeters is the only flow measurement technology that directly measures the volume of the fluid passing through the meter.

They are suitable for use in oil and gas, water and wastewater, chemical, power, pharmaceutical, food and beverage, pulp and paper, metals and mining and aerospace.

The availability of this technology has nonetheless failed to faze the Government of Guyana (GoG) that is at this time exerting its energies on regulating other areas of the industry. It was Vice President and chief policy maker for the sector, Bharrat Jagdeo who told reporters during an August press conference this year that the government will shift its attention to the monitoring of production after it completes its new Production Sharing Agreement (PSA), the Petroleum Act and its inaugural oil blocks auction.

The VP said, “We will get past the core reforms first…the PSA (Production Sharing Agreement), the Local Content Act, the auction, the Petroleum Activities Bill; when we have upgraded the architecture we will then move to operation (and) compliance issues.”

The former Head- of-State was keen to note 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. Likewise, the new oil law will ensure petroleum companies submit timely data. According to the VP, this would give the regulators “a better real-time picture of the industry.”

Perhaps more troubling to stakeholders were the VP’s plans to access information from Exxon to “independently monitor” oil production. He revealed that government plans to access the data that Exxon will be receiving at its new Headquarters at Ogle, East Coast Demerara (ECD).

At that time, he said, “On issues relating to production verification, we said that Exxon is building an operational center as part of the head office. They are gonna have a fiber optic cable coming in, we may have to get an 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.”

Stakeholders had called out the administration on its intention to utilize data from Exxon, as this could have deprived the nation an opportunity to independently confirm the number of barrels being produced offshore daily. This means, Guyana would be blindly accepting the production rates which could be grossly understated by the oil companies.

Subsequently, government announced it would be moving to tender to find a suitable company to monitor the production data.

In the absence of such a critical tool close to four years after first oil, Guyana reportedly purchased a “next generation” 115 Defiant Offshore Patrol Vessel (OPV) for US$11.5M so that the Guyana Defence Force (GDF) can among other things better protect ExxonMobil’s operations.

This publication understands that the government has been paying for the boat since 2021 by setting aside funds from its yearly budgets that are heavily supported by oil revenues from the Stabroek Oil Block offshore Guyana. On Monday October 30, Metal Shark Boats, the American company that Guyana paid to build the vessel said that the boat is completed and has departed its Louisiana production facility in the United States of the American (USA) for its Bayou La Batre, Alabama shipyard.

Losing thousands of barrels daily?

The Publisher of Kaieteur News, Mr. Glenn Lall had expressed the view in a recent commentary that as government focuses its attention elsewhere, Guyana could be losing hundreds of thousands of barrels of oil daily due to its failure to independently monitor and verify the production rates.

The businessman and advocate for a better oil deal reasoned, “If a man picking your mangoes to sell, you the owner does have to check how much he pick. A man picking your coconut, do you have to monitor him to see how much he pick? I am not sure.”

To this end, the newspaper publisher said Guyana could be losing hundreds of thousands of barrels of oil daily, as it fails to verify the production.

“I don’t believe the figures being presented by Exxon. They are reporting 400,000 barrels per day but it is much more than that but like leaders don’t seem to give a damn about that. Guyana has become a free for all for Exxon and others, and it is sad that this country does not know how much oil is being pumped or the interest rates we are paying or the equity charges coming out from our oil,” Lall noted.

He added, “Since when a country has to depend on the eyes of the watchman who is a known gangster to look out for the country’s interest? Guyana has spent US$1.6 billion of the oil money it received, on what, God in heaven knows. The most important thing, a cable from the meter out there to the Office of the President that will cost less than US$40 million hasn’t been put in place four years after pumping oil. What are we running? A country with its US-trillion-dollar resources, or we running a cake shop selling icicles?”

---

• ExxonMobil, meter, Monitor, oil, production

---