ExxonMobil says that it has put stringent novel coronavirus disease (COVID-19) safety measures in place for workers heading to and on its vessels in the offshore Stabroek Block, even as it continues to monitor global low oil prices and the possible effects on the company.
“ExxonMobil Guyana is working to limit the disruption of the coronavirus to our operations,” the company’s Public and Government Affairs Advisor Janelle Persaud told Stabroek News when contacted.
“Offshore workers are being screened at the Ogle heliport before they are cleared to travel offshore to ensure they are not exhibiting symptoms of the virus and that they have not knowingly come in contact with anyone who has the virus,” she said.
Additionally, Persaud said, there are medical personnel onboard all of the company’s offshore facilities and they are “taking necessary precautions to monitor the health of the workers and provide appropriate treatment and care.”
And while world oil prices keep fluctuating and were last week at decade lows of US$20 per barrel, ExxonMobil said that that has not hampered its operations here.
“There is no impact to production at this time and we are managing production rates to ensure safe and responsible operations. We continue to monitor the situation closely and will make adjustments as necessary,” Persaud said.
Late last month ExxonMobil had said that it will make “significant” cuts to spending in the face of the unprecedented slide in oil prices due to the COVID-19 pandemic, which sent its shares to a 17-year low.
When the company held its Investor Day meeting on March 5, it had said that it would stick to its plans “leaning in to this market when others have pulled back.” Then, ExxonMobil announced that it planned to spend between US$30 billion and US$35 billion a year through 2025.
And pointing to Guyana and giving a perspective on its operations, the company said that it maintains what it said two years ago that it had a 750,000 barrels per day gross target.
“I still stick to what I said two years ago …We are bringing five FPSOs [floating production storage and offloading units] in six years and we are bringing those on twice as fast as the industry has done and we are doing it in a basin and with a country that has no hydrocarbon experience. And at the same time, as we are developing, we are exploring and producing. It is important that we take those lessons and those learning from the development programme,” Chief Executive Officer Darren Woods had said.
Other major oil companies have slashed costs amid falling demand and newly unbridled output by top producers Saudi Arabia and Russia. US shale firms have outlined plans to cut expenses by 25% to 30% to cope with this year’s massive drop in oil prices and demand, Reuters reported.
The Brent crude price for December, when production started in Guyana, was at a high of US$67.31 per barrel and in February, the average was US$56 per barrel. The figure dropped earlier in March and then slumped dramatically into the mid-US$30s after a row between OPEC [the Organization of the Petroleum Exporting Countries] and Russia.
By late March, oil futures settled under $29 a barrel, down from $61 at the start of the year, which Reuters said has cut new drilling and led producers to seek price cuts from suppliers. Last week, it was even lower at US$20 per barrel and saw many analysts weighing in on the impact on Latin America and the Caribbean.
‘Compounded’
Lisa Viscidi, the Latin American Energy Specialist and Energy Programme Director at the nonprofit organisation, The Dialogue, last week wrote that the impact of the virus is already being felt in Guyana as this country had projected its high 86% growth rate on the petroleum sector.
“The oil price crash and coronavirus have compounded an inauspicious start to oil production in Guyana, which was previously projected to experience economic growth of 86 per cent this year. Fierce controversy over the vote-counting process following the election of March 2 has still not been resolved,” she said in an article for the oganisation titled ‘Pandemic and Price Collapse: Impacts for Energy in Latin America’.
And while the energy expert doesn’t believe that the price drop will affect ExxonMobil’s current operations, she said that it was a contributing factor to government’s recent extension of time for bids for a marketer for its share of oil from those operations.
“The price drop is not expected to affect development of ExxonMobil’s Liza-1 well. However, market uncertainty has caused the government to extend, for the second time, a deadline for companies to submit bids to market the government’s share of oil from the Stabroek block, where Exxon is already producing,” Viscidi noted.
The Department of Energy (DE) late last month announced that it had extended the deadline for expressions of interest (EOIs) for a marketer for Guyana’s share of crude.
Phillip Bryan, Procurement Officer at the DE, explained why to Stabroek News. “The Department of Energy has taken into account the pandemic health crisis, and how it is affecting courier services providers, who are required to support the long lead submission of EOIs by overseas firms,” he said.
“Consequently, we have issued a second Submission Date extension for the EOIs, to April 21, 2020. This is to allow the facilitation by the globally reduced courier providers, to carry long lead packages to Guyana. It must be noted that the Procurement Act of Guyana expressly forbids Electronic Submission of bids in any form. Therefore, the Department of Energy nor our National Tender Board is able to entertain such submissions.”
