Oil Production to Drop to 109,000 Barrels in December

https://www.kaieteurnewsonline.com/2021/10/17/oil-production-to-drop-to-109000-barrels-in-december-report/

Kaieteur News – With downtime planned for the Liza Destiny FPSO in December, the Ministry of Finance has disclosed in its Half Year Report that oil production is expected to average around 109,000 barrels of oil per day instead of being at its nameplate capacity of 120,000 barrels of oil.
As previously reported by ExxonMobil and its partner, Hess Corporation, the Liza Destiny is expected to see a new gas compressor being installed in November, following which, adjustments would see production being ramped up by next year to approximately 140,000 to 150,000 barrels of oil per day.
Speaking to the oil sector’s performance over the last six months, the Ministry of Finance said it was anticipated that the average production rate for the first half of the year would be approximately 114,100 barrels per day. But due to technical challenges experienced with the flash gas compressor on the Liza Destiny, the achieved rate of production was approximately 111,767 barrels of oil per day, as efforts were made to limit the flaring of excess gas. Though below the targeted rate of production, the Finance Ministry said this rate compared favourably against approximately 67,205 barrels of oil during the first half of last year.
Expounding further, the Ministry disclosed that the total output from the petroleum sector increased by 65.4 percent when compared with the same period in 2020. As a result, the Ministry said the subsector grew by 32.3 percent in the first half of 2021 while adding that it is now projected to grow by 47 percent in 2021.
Kaieteur News had previously reported that Head of the Environmental Protection Agency (EPA), Mr. Kemraj Parsram, increased the flaring penalty for ExxonMobil from US$30—per tonne of Carbon Dioxide equivalent released—to US$45. As a result, Parsram disclosed that the EPA has already received $400M penalties from ExxonMobil.
He was keen to note that the fine was increased as of July since ExxonMobil is still flaring, though at significantly reduced levels. In fact, Parsram noted that ExxonMobil was flaring 15 million standard cubic feet of gas per day but this is now down to six million standard cubic feet of gas per day.
Based on the information provided thus far to the EPA, Parsram said ExxonMobil is expected to reach pilot level flaring by year end, which is one million standard cubic feet of gas per day or less. This would occur once the new flash gas compressor is installed. The EPA Head said he finds this to be a reasonable timeline while adding that there have been noticeable improvements and also the willingness of the operator to make every effort to comply. He had said, “The important thing is not so much how much money or how many applications have been made but rather that there is real effort at achieving compliance and a clear plan to solving the issue.”
It was in May when Kaieteur News reported that the EPA amended the Liza Phase One Environmental Permit to have ExxonMobil’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL) pay US$30 for every tonne of Carbon Dioxide equivalent (CO2e) – a term for describing different greenhouse gases in a common unit – burnt after May 13, 2021.It is significant to note that ExxonMobil was projected to exceed flaring 14 billion standard cubic feet of gas by May 13, 2021 in its Liza Phase One Environmental Impact Assessment (EIA). In light of this, the EPA said it had engaged EEPGL to amend the Liza Phase One Permit.
Kaieteur News understands that EEPGL had agreed to the changes which include: revised terms and conditions relating to emissions reporting requirements, technical considerations for flaring, timelines for flaring events and an obligation on the company to pay for the emission of Carbon Dioxide equivalent (CO2e) as a result of flaring in excess of these timelines. The modified Permit was signed subsequently between the two parties.

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