Jagdeo defends Exxon pumping above safety limit on oil projects

May 12, 2024 ExxonMobil, News, Oil & Gas

Vice President, Dr. Bharrat Jagdeo

In absence of unlimited parent company guarantee…

Kaieteur News – Despite Guyana is at the mercy of ExxonMobil should a massive oil spill occur during production activities in the Stabroek Block, in the absence of an unlimited parent company guarantee, the Chief Policymaker for the sector, Vice President Bharrat Jagdeo has defended the acceleration of production beyond the safe limits of the three operational projects.

Currently ExxonMobil Guyana Limited (EMGL), the operator of the Stabroek Block has three Floating Production Storage and Offloading (FPSO) vessels operating beyond the designed rates.

It was reported that the Liza One and Liza Two are producing about 150,000 barrels per day (bpd) and 250,000 barrels per day (bpd) respectively. The Environmental Impact Assessments (EIAs) each specifically outline 120,000 and 220,000 bpd, as the safe operating limit for Liza One and Two, respectively. Similarly, the third oil project – Payara – is also producing approximately 230,000 bpd even though the vessel’s nameplate capacity is 220,000 bpd.

During his weekly Party Press Conference at Freedom House, the Vice President noted that the accelerated production activities have caused concern. By his calculation, Jagdeo pointed out that the oil giant has breached the vessels’ initial capacity by almost 100,000 bpd cumulatively.

To this end, he reasoned, “So the question has been if you’re producing more than what the initial announced capacity of these FPSOs whether you are doing so safely and so the Ministry has assured me that before this is done, they have reviewed this.”

Additionally, the VP explained that the watchdog for the sector, the Environmental Protection Agency (EPA) has reviewed the optimization plans submitted by Exxon to increase daily oil production. Consequently, Jagdeo pointed out, “They have said that this is safe, so it’s safe and it was on the basis of optimization.”

He continued, “So was there an independent check or approval by the government and was this submitted to the government, they have assured me, the Ministry that this was done and they had their technical people review these plans.”

On Friday, the Leader of the Opposition, Aubrey Norton stated his disapproval with the ramping up of oil production beyond the safe operating limits.

“We said earlier that we are not supportive of that approach if I recall. Our position is we need to be very, very careful, look at every project separately and to space it out. There are dangers involved if you are going above the limit – that is dangers for the people of Guyana because any mishap that occurs will impact the Guyanese people negatively.”

The Opposition Leader explained that while there is need for investment in the oil and gas industry, “The interest of the people of Guyana must come first and they (government) should not be encouraging any company to go above the safety limits and endanger the people of Guyana.”

Meanwhile, the Opposition’s spokesperson on oil and gas, Elson Low pointed out that the country is yet to be fully protected from the liabilities associated with a spill that may result from Exxon’s operations.

To this end, he stressed, “This underlines the need for a full parent company guarantee as well as appropriate oil spill insurance because if a company is going beyond nameplate capacity for the vessels that are producing oil, that raises the question of additional risk.”

Both ExxonMobil and the government of Guyana are fighting against the provision of an unlimited oil spill guarantee to protect this country from footing costs beyond the limited insurance and US$2B guarantee reportedly lodged at the EPA.

The High Court in May last year ordered Exxon to provide the unlimited parent company guarantee, following a legal suit by two Guyanese men, Godfrey Whyte and Frederick Collins. The ruling has been appealed and is presently ongoing.

defends, Exxon, Jagdeo, oil, safe limits, spill

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