ExxonMobil pushed Payara oil production beyond safety limits two months after startup

Apr 25, 2024 News

Chart showing offshore oil production from December 2023 to March 2024

Kaieteur News – Two months after the operator of the Stabroek Block, ExxonMobil Guyana Limited (EMGL) began producing oil at its third deep-water development, the company breached the safe production limit.

This information is reflected on the Ministry of Natural Resources Petroleum Data Centre. Guyana’s third Floating Production Storage and Offloading (FPSO) vessel- Prosperity, which commenced oil production in November is now producing approximately 230,000 barrels of oil per day (bpd) even though the vessel was safely designed to produce 220,000 bpd. The safe operating limit is outlined in the Environmental Impact Assessment (EIA) that was conducted for the project.

In mid-January, the oil giant reached a peak of 229,000 barrels since startup. Notably, ExxonMobil pushed production to as much as 237,000 barrels on March 8, 2024. The statistics represented on the website displays a worrying trend of the company producing above the safety limits almost on a daily basis, even as the country is yet to secure an unlimited parent company guarantee.

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 respective 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.

Former Head of the Environmental Protection Agency (EPA), Dr. Vincent Adams, said the American oil giant is not only slaughtering the safety limits or making a mockery of it in the name of greed, but is taking advantage of the Government.

Dr. Adams during a previous interview with Kaieteur News said when an EIA is done prior to oil production operations commencing, it explains clearly what would be the safe limit of production the oil companies will abide by. He said too that this number is used to generate oil spill scenarios for the Government’s regulatory arm to consider. When the goalpost is shifted by going beyond the safety limit, Dr. Adams said it is commonsense that the EIA would be properly updated to reflect the new risks that come with increased production numbers.

Dr. Adams said, “Exxon has clearly invalidated the EIA and I say that because the purpose of the EIA is to set the safety production limit and now that limit has been exceeded or violated without a proper review process.”

When told that the company has said it has engaged in ‘debottlenecking exercises’ to allow for the increase, Dr. Adams said this too is absolute nonsense. He said Exxon’s Executives use such jargons as a mask for their unconscionable pursuit of obscene profits.

Dr. Adams said, “They are using this debottlenecking jargon to intimidate and confuse because they know most Guyanese don’t know fully what this type of lingo means. That terminology means that they widen the piping system and other equipment to increase the production. They try to make it seem that this is some industry norm but it is not. They can’t pull this nonsense in the USA- I know that for a fact.”

The former EPA Head added, “I do believe that they know the right thing but they are without a conscience and ruthlessly taking advantage of an abysmal EPA and weak Government. The EPA is being paid to be our protector but they are obviously intimidated by Exxon, does whatever they want.”

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

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.

• Breach, limit, oil, Payara, production, safety