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ExxonM seeks Govt. approval to ramp up production
(Kaieteur News) – ExxonMobil Guyana is seeking approval from the Government of Guyana (GoG) to increase oil production at its fourth project, Yellowtail, from 263,000 barrels per day (bpd) to 290,000 bpd.
On Thursday, the company’s President, Alistair Routledge revealed that an application has been filed with the GoG which is currently reviewing the technical details.
He said that the initial capacity of the project was 263,000 bpd, although the Environmental Impact Assessment (EIA) states that the vessel was designed to produce 250,000 bpd.
“So that initial capacity was 263,000 barrels per day. So, what we’d say is the, including allowance for reliability, 250,000 barrels per day was the initial production rate, but it was recognizing a capacity of around $263,000 a day,” Routledge told reporters.
The Yellowtail EIA indicates that the project was designed to operate at 250,000 bdp.
The company has completed a number of studies analyzing the operation of the facilities for existing bottlenecks while safety analysis was conducted on the production facilities to minimize or reduce bottlenecks to increase production.
Any increase to the daily production levels will be done in a phased manner for safety purposes according to the Country Manager. He explained, “We will only do it in steps that we’re convinced that are safe. So we outlined and proposed the government a number of steps that we could take, but all of them would be dependent upon how the first step goes, and how the equipment responds.”
The first step would increase daily production by “a few thousand barrels per day” but the company is confident that Yellowtail can produce around 290,000 bpd.
“We think (its) feasible that this facility could produce a size 290,000 (barrels) per day that is sustainable, you know, because then what we recognize, you start to get into the lifting frequency. You have a million barrels to lift if you’re at 250,000 barrels a day, that’s four days, and you fill the tanks again, and you have to have another tanker lift. You go up closer to 300,000 you’re getting closer to three days. So, we start to come up again, some other, sort of, just challenges and managing an operation at that level,” he reasoned.
To date, ExxonMobil has conducted debottlenecking activities on the other three Floating Production Storage and Offloading vessels (FPSOs) in the Stabroek Block.
Payara, Exxon’s third project which commenced production on November 14, 2023, was designed to produce 220,000 (bpd) but Exxon has increased production to over 260,000 bpd.
Similarly, both Liza One and Liza Two are producing above the design capacity. The Environmental Impact Assessments (EIAs) for the two projects indicate that the Liza One and Liza Two projects were designed to safely operate at 120,000 and 220,000 barrels of oil per day (bpd), respectively. Recent data on the Ministry of Natural Resources website indicates that the two projects are producing about 130,000 bpd and 263,000 bpd.
Stakeholders have often raised concern over the increased production activities being conducted by the operator, touting the increased risk of an oil spill as a result. Beyond the environmental concerns, Attorney-at-Law, Christopher Ram also pointed out previously that insurance companies will refuse to offer compensation in the event of a spill, since Guyana allowed Exxon to breach the safety limits.
Ram cautioned, “In petroleum production, there is a safety margin below the rated productive capacity of a well. Not only is there an increased risk that something can go wrong, but that when it does, the insurance companies will refuse to pay because you have breached the safety limit.”
Meanwhile, for its part, GoG said debottlenecking is safe, as technical officers attached to the Environmental Protection Agency (EPA) as well as the Ministry of Natural Resources carefully examine the plans of the operator before any increase occurs.
Vice President Bharrat Jagdeo addressed the subject at press a conference in May 2024. He said that “The Ministry assured me their technical officers examined it, I spoke with the EPA, they said they had examined it carefully too so they are aware and it was done with their approval. Both agencies the Ministry of Natural Resources and the EPA and they believe it was done and it’s safe.”
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