Government has identified the Guyana National Bureau of Standards (GNBS) as the agency that will be present when petroleum produced by ExxonMobil and its partners is measured and it will also be responsible for testing the measuring appliance.
President David Granger, in his capacity as Minister of Petroleum, on January 1st, 2020, made the order which was published in the Official Gazette. It served as notice to ExxonMobil’s subsidiary Esso Exploration and Production Guyana Limited (EEPGL) as well as its partners CNOOC Petroleum Guyana Limited and Hess Guyana Exploration Ltd of the role of the GNBS.
The consortium began producing oil from the Liza-1 development in the Stabroek Block offshore Guyana on December 20th last year, with the sale of the first cargoes of oil expected soon.
In the notice in the Official Gazette, it was noted that Article 6.1 of the Petroleum Agreement between Guyana and the consortium states that the minister may, subject to the provisions of the Petroleum (Exploration and Production) Act or any other law, delegate any person or legal entity to exercise any of the functions under the agreement and anything done by the delegate in pursuance of the delegation shall have the same validity and effect as it would have been done by the minister.
It stated that pursuant to Article 6 of the Petroleum Agreement, the GNBS is delegated to perform the functions of the minister as set out under regulation 12 of the Petroleum (Exploration and Production) Regulations, No. 5 of 1986 and to be a representative of the minister under paragraph (j) of the Petroleum Production Licence (PPL).
The PPL, dated 15 June 2017, in relation to measurement of petroleum, in paragraph (j) (ii) states that the minister maintains the right to attend the measurements or to have a representative attend on his behalf. Additionally, paragraph (j) (iii) states that the minister maintains the right to be present, either in person, or through a representative(s) when an equipment or appliance for measuring or weighing crude oil or gas is being calibrated, re-calibrated, tested, compared, measured or weighed against a standard in accordance with good oilfield practices and as approved in writing by the minister.
The notice further observed that pursuant to section 70 (2) (1) of the Act, the minister may make regulations providing for the methods to be used for the measurement of petroleum, water and other substances from a well. Accordingly, regulation 12 (3) of the Petroleum (Exploration and Production) Regulations, No. 5 of 1986 gives the ministry the authority to direct that any weighing or measuring appliance shall be tested or examined in such manner, upon such occasions or at any intervals and by such means as may be specified in the direction.
The aforementioned roles will be performed by the GNBS.
The beginning of oil production on December 20, 2019 marked Guyana’s debut as an oil producer and the Liza Phase 1 development is expected to produce up to 120,000 barrels of oil per day utilising the Liza Destiny floating production storage and offloading vessel. So far, the ExxonMobil-led consortium has made 15 discoveries on the 6.6 million acres (26,800 square kilometres) Stabroek Block and has estimated recoverable resource of more than six billion oil-equivalent barrels.
