Wednesday, September 28, 2022

Government ‘highly disappointed’ over gas compressor issue, examining implications of revenue loss

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The Guyana government said on Wednesday it was ‘highly disappointed’ with ExxonMobil’s inability to resolve ongoing issues with the flash gas compressor system on the Liza Destiny FPSO which on three occasions since oil production began in December 2019, encountered difficulties that resulted in a reduction in output in order to minimise flaring.

The Government of Guyana (GoG) is “highly disappointed with the Operator’s inability to resolve this situation to date and will continue to monitor the levels of daily crude oil output and flaring to best allow for an economically feasible level of production during this period,” the Ministry of Natural Resources (MNR) said in a statement.

The government said it was notified on Sunday by ExxonMobil of an unexpected issue arising with the discharge silencer of the Flash Gas Compressor (FGC). This saw output reducing from 120,000 barrels per day (bpd) to around 30,000 bpd.

“The GoG is currently examining the implications of the loss of output, and consequently loss of income and revenue, including measures that it may have to institute to protect national interest,” the MNR statement said.

“A team from SBM Offshore, MAN Energy Solutions and ExxonMobil are on site to assess repairs, with support from engineering experts in Europe and the USA,” ExxonMobil Guyana Public and Government Affairs Advisor, Janelle Persaud said in an update to the media on Tuesday. Persaud pointed out at the time that ExxonMobil was “extremely disappointed by the design issues and continued underperformance of this unit and will be working with the equipment manufacturer MAN Energy Solutions and the vessel’s operator SBM Offshore to rectify the situation.”

The FGC and its associated components were recently reinstalled on April 2 and were undergoing post installation tests since that time.

“Presently, the FGC remains offline and production and flaring volumes are being closely monitored,” MNR said, pointing out that it is “nonetheless pleased to note that this occurrence has not affected GoG’s crude oil lift which was safely and successfully completed [on Tuesday] at the planned quantity and in keeping with the Crude Lifting Agreement and Lifting Schedule. This was the GoG’s second lift for 2021.”

The Government, through MNR, Guyana Geology and Mines Commission, and the Environmental Protection Agency, has been receiving regular updates on the matter and met with ExxonMobil officials on Wednesday to discuss the company’s findings and plans for the expeditious resolution of the issue, MNR said.

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