Govt. must install independent meters, offshore lab for Guyanese to benefit from oil bonanza – T&T Consultant

Jan 01, 2024 ExxonMobil, News, Oil & Gas

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By Davina Bagot

Kaieteur News – For Guyana to reap the true benefits of its rapidly developing oil and gas sector, the country must implement an independent system that aids in the verification of the daily rate of production by American oil major, ExxonMobil.

ExxonMobil Guyana Limited (EMGL) is the operator of Guyana’s oil rich Stabroek Block. More than 11 billion barrels of resources have been discovered offshore by the company since 2015. Production activities officially commenced in December 2019.

The company now has three Floating Production Storage and Offloading (FPSO) vessels in operation, producing an average 500,000 barrels per day; however, Guyana is yet to put measures in place to verify the daily rate of production. Consequently, the country accepts the production figures reported by the company and allows for its resources to be exported without robust verification techniques in place.

Former Head of Maintenance and Reliability at BP Trinidad and Tobago, Kuarlal Rampersad in a recent interview with Kaieteur News strongly urged that Guyana avoids the mistakes made by the twin island republic.

Rampersad, a Maintenance and Reliability Engineer, has 33 years of experience with BP. After he retired from the company in 2009, he was appointed Chairman of two state boards in Trinidad; the Asphalt Company and the Bureau of Standards.

He is presently a consultant for energy, oil and gas, manufacturing and power generation.  He is also involved with the International Code Council (ICC) where he serves as the General Secretary for the Caribbean Region. Additionally, Rampersad is the Executive Chairman of the Society for Maintenance and Reliability Engineering Professionals (SMRP), headquartered in Atlanta, Georgia.

In sharing the experience of Trinidad and Tobago, the specialist explained that in the early days of oil production, dating back to the 1970’s, BP, formerly Amoco Trinidad Oil Company, was producing over 200,000 barrels per day (bpd) without a metering system to independently verify the daily rates of production.

In the absence of this, the Consultant said the twin island republic accepted an average of how much oil was being shipped away by the tankers to refineries.

“The average would be accepted by the captain and the other team who would say we believe this is 500,000 barrels of oil and Amoco had no record of how much oil went across,” he explained.

About a decade later, Rampersad said Trinidad and Tobago realized that there were discrepancies in the reported amount of cargo that was leaving and how much oil was being shipped from the country.

At that time, Trinidad was producing approximately 260,000 bpd and determined that it wanted value for money according to the former Head Engineer.

He said the country moved to install a meter on the pipeline that leaves BP’s facility in Trinidad and goes across to the tanker. In addition, Rampersad noted that a sampler was also installed in the line. “It would take in like a liter that would represent five barrels of oil…we would take samples from the tank analyze it in-house in the petroleum lab and it will tell you how much water, how much sand is in the cargo. When carrying the cargo, you would try to remove as much as possible the debris which is water and sand, so when we do that testing, we know that the oil has met certain specification like API (American Petroleum Institute) specification which gives Trinidad the approval to start loading the tanker.”

He went on to explain how the meters work in verifying the production rates. “Before the tanker leaves, the meter takes samples and shows how much liters of oil are there per barrel, so if you have one liter of crude oil, it represents let’s say five barrels of oil so before the cargo leaves, they will calculate how much liters of oil and they would know how much oil is leaving the terminal to go to the tanker.”

The Consultant said he has been keeping an eye on Guyana’s offshore activities and believes there is no such system in place. Consequently, he has urged, “For Guyana to get the true value for their money, what they need to do is a few things so that the government of Guyana and the people of Guyana benefit from this oil bonanza. They need to install an independent petroleum lab that is being monitored by an independent consultant and people of Guyana and a representative of Exxon and the meters must be installed.”

The Consultant warned that in the absence of this, the company can provide its own figures on the number of barrels leaving the country which cannot be disputed by Guyana. In fact, he said, the company can also convince Guyana, in the absence of the offshore laboratory, that the cargo is concentrated with water and other debris, which can cause the country to leak more revenue.

“The only way to correct that and get the true value of the cargo that is leaving, you have to get a petroleum lab and you have to do that configuration and testing to know how much true oil is going across to Exxon’s refinery in Texas,” Rampersad urged.

The Consultant pointed out that Guyana urgently needs sound advice on the management of this sector, especially in this regard as the country can continue to lose billions in revenue.

He was keen to note that Guyana has a limited timeframe in which the country can maximize on its newfound wealth and must act swiftly to take action to increase its earnings over the next 10 to 15 years before the reduction in the use of fossil fuels affect the global market.

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• By Davina Bagot, Independent, lab, meters, oil, verification

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