ExxonMobil refused to show auditors location of oil meters on FPSO – Second Audit Reveals

Apr 03, 2024 ExxonMobil, News, Oil & Gas

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– tells them their job is to verify expenses not production data

Kaieteur News – ExxonMobil Guyana Limited (EMGL), the operator of Guyana’s resource-rich Stabroek Block had refused to provide a map of the metering points on the Liza Destiny, the country’s first Floating Production Storage and Offloading (FPSO) vessel, to the auditors reviewing the company’s US$7.3B expenses, incurred between 2018 and 2020.

According to the report prepared by VHE Consulting (Ramdihal & Haynes Inc., Eclisar Financial, and Vitality Accounting & Consultancy Inc.), the oil company was requested but did not provide a schematic showing all metering points on the Destiny Liza FPSO.

The auditors said the schematic would provide a visual representation of the physical flow of production as it is produced onto the FPSO, through the various types of production equipment, and into the storage tanks.

Notably, ExxonMobil also refused to provide the raw production data to the audit team. This information is used to create the monthly production data it provides to the Government of Guyana (GoG).  ExxonMobil reportedly told the auditors consistently that “production information was outside the scope of the cost recovery audit.”

The report done by Haynes and team recommended: “For future audits, a schematic would assist in validating the volumetric data provided in the monthly statements submitted to the Government of Guyana”.

Although the auditors were unable to access this information, they were satisfied that data presented by Exxon was accurate. The report states, “We have no reason to conclude the data presented in the monthly statements would differ from the raw measurement data utilized by EEPGL (now EMGL) for production management.”

Auditors added that Exxon also indicated that personnel from the GoG are fully aware of all measurement points and are present for calibrations and offloads.

The refusal of the oil giant to share raw production data and provide the metering points to the audit team raises serious concerns, especially as more than four years after production activities commenced Guyana is yet to implement an independent system to verify the volume of crude oil being extracted by the company.

Exxon is reportedly producing over 640,000 barrels per day currently in the Stabroek Block. Three FPSOs are now in operation. More than 11 billion barrels of resources have been discovered offshore by the company since 2015. The company officially began production activities in December 2019.

Former Head of Maintenance and Reliability at BP Trinidad and Tobago, Kuarlal Rampersad had cautioned Guyana against making the mistakes made by the twin island by failing to independently monitor oil production.

In an exclusive interview with this newspaper earlier this year, Rampersad stressed that for Guyana to reap the true benefits of its rapidly developing oil and gas sector, the country must employ the use of its own meters.

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.

Vice President Bharrat Jagdeo had announced in September last year that government will be moving to tender to find a suitable company to monitor the daily volume of crude oil produced. It has now been two months since the country’s first trillion-dollar Budget was passed with no progress on the oil meters.

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• Audit, Data, map, oil, production, refuse

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