Exxon’s third oil project already producing over 100,000 barrels daily

Dec 25, 2023 ExxonMobil, News, Oil & Gas

Kaieteur News – ExxonMobil Guyana Limited (EMGL), the operator of the Stabroek Block, has attained production of over 100,000 barrels per day (bpd) at its third development, Payara.

The Floating Production Storage and Offloading (FPSO) vessel, Prosperity, attained first oil on November 14, 2023.

According to statistics on the Ministry of Natural Resources Petroleum Management website, the oil company drew just about 24,000 barrels on the day one of production. By November 28, Exxon pushed production up to 101,000 barrels for the first time. Data for the month of December has not yet been uploaded to the Ministry’s website.

Payara is expected to produce 220,000 barrels per day in the first quarter of 2024, thereby increasing Guyana’s daily production rate to 600,000 bpd.

Guyana’s third FPSO, Prosperity

Presently, ExxonMobil is also producing oil from two other projects in the Stabroek Block, Liza One and Liza Two, at about 150,000 bpd and an average 250,000 bpd respectively.

Notably, the two projects have both exceeded its safe operating limit as prescribed by the Environmental Impact Assessments (EIAs). The EIAs for the Liza One and Liza Two projects each specifically outline 120,000 and 220,000 barrels of oil per day (bpd), respectively, as the safe operating limit.

This has sparked concern among Guyanese as the company fights against offering full liability coverage in the event of an oil spill.

Senior officials at ExxonMobil have also revealed plans to ramp up production at the Payara project beyond the designed capacity.

ExxonMobil Corporation’s Senior Vice President, Neil Chapman had said, “We would hope, we would expect to have a similar type of uplift. There is no reason to think that we wouldn’t, but we have to start that up. The plan is to start that up in the middle of November,” the Senior Vice President said while acknowledging the 220,000-bpd nameplate capacity of the Prosperity vessel.

Presently, Guyana has been assured of a US$600 million insurance policy per oil spill event in the Stabroek Block, where over 11 billion barrels of resources have already been discovered.

Two citizens had approached the High Court for the company to provide unlimited oil spill coverage rather than leave those costs to Guyana. The Court ruled that ExxonMobil must provide the signed parent company guarantee to that effect but the ruling has been appealed. In the meantime, Exxon has lodged a US$2B affiliate company guarantee to prop up its USS$600 million oil spill insurance.

Guyanese, however, remain concerned that this sum may not be sufficient to cover the extensive damage that may be caused by a massive spill. Multiple studies conducted by ExxonMobil’s consultant, Environmental Resources Management (ERM) have determined that over 10 Caribbean countries can be hit by a worse case disaster. One analyst has determined that countries within the pathway of a potential spill from Guyana have US$140B in economic activity at risk.