Former Executive Director of the Environmental Protection Agency (EPA) Dr Vincent Adams on Saturday said ExxonMobil only needs to cut back oil production by 15,000 barrels of oil per day (bpd) from its last given figures of 120,000 bpd in order to bring flaring into compliance with the Liza-1 permit.
On January 29, Exxon issued a brief statement announcing a gas compression problem on its offshore platform, resulting in it having to temporarily increase flaring above pilot levels in order to maintain safe operations. A few days later, President of ExxonMobil Guyana Alistair Routledge said that oil production had been pared to 120,000 bpd – its previously stated maximum capacity – while gas flaring has increased to 16 million cubic feet per day.
According to Minister of Natural Resources Vickram Bharrat, Exxon is now producing between 110,000 and 115,000 bpd in order to minimise flare levels. He said that this is despite there being no discussions between the Ministry and Exxon concerning the reduction of oil production.
With the announcement of the recent compressor issue, Adams has criticised the company for continuing its maximum production. Adams, who was sacked by the PPP/C government last year, said that he had cautioned against allowing the maximum production rate and advised that a plan be devised to “keep stability in the reservoir.”
Adams had said that the company should be asked to address the problems with alacrity. “Operating full blast is not emergency. You cannot tell me that you are producing at full capacity and call that an emergency situation. The permit specifically prohibits flaring under normal operations. So what then is happening here? Something is wrong with that whole picture,” he contended.
“They should not continue producing at maximum and production should have gone to minimum to keep stability in the reservoir. If they are flaring with those production rates, that is a whole lot of flaring,” he added.
Adams also said that if he was still head of the regulatory body he would’ve halted ExxonMobil’s oil operations until the issue with the Liza Destiny oil platform flash gas compressor was solved.
“The permit is explicit in the law that the EPA has the authority to terminate operations at any time and that is what I would’ve done because we have been bending over for Exxon,” he stated on Saturday.
When contacted on Saturday, Bharrat opined that the shutting down of the oil operations is too extreme and the Guyana Oil and Gas Energy Chamber (GOGEC) has since supported this stance. Bharrat added that the government does not see the need to shut down or reduce oil productions at this point, but this position can change.
GOGEC is a private sector entity with a vested interest in the oil sector whereas Adams was a former EPA head and a recognized expert in various aspects of the oil and gas sector.
In response to the GOGEC statement that his call for a shutdown of the Liza 1 operation to force Exxon to accelerate final resolution of the compressor equipment malfunctioning is extreme, Adams on Saturday said that he understands why his call for such action could be viewed that way by GOGEC. However, he sees Exxon’s subsidiary, Esso Exploration & Production Guyana Limited’s (EEPGL) continued flouting of Guyana’s laws with their unwillingness to cut back production by only 15,000 bpd from 120,000 bpd to 105,000 bpd as also being extreme.
“The bottom line is that EEPGL seems to be hell bent on not losing the relatively small amount of 15,000 bpd or cut of only 12.5 %, even though it would eliminate flaring and bring them into legal operation,” he asserted.
The former EPA director added that based upon what has been reported in the press, EEPGL is producing at its maximum safe rate of 120,000 bpd while flaring 16 million cubic feet per day (mcfd) of natural gas. He stated that if this data is accurate, it could only be assumed that some components of the compressor system must be still operating, allowing approximately 95 mcfd to be re-injected, which is a good thing.
He noted that EEPGL should be asked to confirm this production data but assuming correctness and based upon the gas to oil production ratio, calculations would show that reducing the production rate by only 15,000 bpd to 105,000 bpd would reduce the flaring by 15 mcfd from 16 mcfd, leaving 1 mcfd for allowable pilot flaring.
This, he says, would bring the flaring into compliance with the environmental Permit and the Environmental Impact Assessment (EIA) for Liza 1.
Fully cooperated
Adams reminded that in 2020, EEPGL fully cooperated with the EPA and reduced production to 30,000 bpd so as to reduce flaring to a minimum safe level and stable operation while the compressor was being repaired.
“So, it is rather puzzling as to why they could have then in 2020, willingly reduce production to 30,000 bpd, but are now so unwilling to even reduce its current production to 105,000 bpd while at the same time coming into environmental compliance. GOGEC should be at ease that if EEPGL takes the responsible action to reduce production to 105,000 bpd, then there would be no need for a call for complete shutdown of operations; hence GOGEC is called upon to support this more than reasonable and legal action for EEPGL to do the right thing,” Adams said.
Meanwhile, Bharrat said that the Ministry is working with Exxon to ensure that the flash gas compressor, which is currently in Germany for repairs, is fixed. He noted however, that Exxon has stated that production has been cut back.
“As it is now we haven’t discussed the cutting back of production but they have cut back a little to minimise flaring to an acceptable level. [The cutting back of oil production], that is not in discussions but now they are producing about 110,000 to 115,000 barrels per day,” he said.
When asked why the EPA is not enforcing the terms of the Liza-1 permit, the Minister said that this permit is different from the Liza-2 and Payara permit and as it relates to flaring for Liza-1 there is no provision for fining in this particular permit.
“However, EPA, if they wish, can take actions,” he said.
Several unsuccessful attempts were made to contact the EPA concerning a number of issues including; why the terms of the Liza-1 permit are not being enforced. And more specifically, why have they not compelled Exxon to reduce oil production.
Axial vibration
Meanwhile providing an update on the Liza Destiny oil platform stage three flash gas compressor, Exxon reported that an axial vibration of the compressor rotor led to the mechanical seal failure in January which resulted in ExxonMobil having to temporarily increase flaring above pilot levels in order to maintain safe operations.
“A detailed assessment of the compressor has found an axial vibration of the compressor rotor was the initiating event of the technical issue experienced on January 27. The resulting vibration within the compressor was the cause of the mechanical seal failure initially reported,” Exxon said in a statement on Saturday.
Routledge had revealed that the gas compressor failed in the middle of the night on January 27 when optimisation testing was ongoing and the production level was around 130,000 bpd, but he maintained that this was not in any way linked to the malfunction.
“Everything that we have been doing with the FPSO is within its designed parameters and at no time have we done anything that is outside the overall parameters of the equipment and so this failure is not linked to any higher capacity test that we have been doing but nevertheless in order to minimise flaring we have cut back from some of those higher production test levels,” he said.
Exxon Production Manager Michael Ryan had also disclosed that it was the mechanical seal that failed, which made the operator realise that there was an issue with the gas compressor.
Additionally, it was stated that technical experts at the MAN Energy Solutions workshop in Germany are continuing with the reassembling of the internal components of the flash gas compressor. According to Exxon, as of Saturday, the experts have completed the adjustment of all sealing components for the suction and have moved forward with the assembly and alignment of the seals and the bearings on the discharge side.
“A key component of the assembly, the discharge silencer, which was transported to Germany separately, based on the disassembly sequence on the FPSO, is under evaluation and assessment to determine the scope of repairs required,” Exxon said before saying that reinstatement could take up to eight weeks as was previously indicated.
Meanwhile, the company went on to say that they are conducting comprehensive root cause analyses of the issues and will take full action to incorporate lessons learned for the floating production, storage and offloading units (FPSOs) employed in future projects including Liza Phase 2 and Payara.
In its latest update, SBM Offshore revealed that the Liza Phase 2 and Payara FPSOs, Liza Unity and Prosperity, respectively, are 75% and 25% complete.
Exxon’s Public and Government Affairs Advisor Janelle Persaud said that the next update will be sent today and they would try to include responses to questions in the update.
