Sunday, June 26, 2022

Guyana receives GY$1.7B in payments for flaring from ExxonMobil

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To date, ExxonMobil’s affiliate, Esso Exploration and Production Guyana Limited (EEPGL) has flared 17.7B cubic feet of gas via the Liza Destiny floating production, storage and offloading (FPSO) vessel with 1.5B cubic feet flared thus far for 2022. As regards payments for gas flared, this has been made to the Environmental Protection Agency (EPA) in five tranches totaling US$8,385,066.25 (approximately GYD$1,755,770,823.26).

Providing this disaggregated data to OilNOW was Executive Director of the EPA, Kemraj Parsram.

The EPA Boss said, “We expect by July of this year that the problem they are experiencing with the flash gas compressor will be addressed as the new one will come from Germany and be installed. Everything so far seems on track for this because we have weekly meetings for updates on these matters. However, we still maintain that if they flare above background flare (over one million standard cubic feet of gas), they have to pay.”

“Just to be clear, no operation out there is without a degree of flaring; you will always have a safety or background or pilot flare. That does not mean it is equivalent to tonnes of gas being flared so we still maintain that and if they go above that they have to seek approval and we have to charge them,” Parsram pointed out.

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He said approval is given on a case by case basis, and within every 60 days. “Right now, they have brought down daily flare from 15 million standard cubic feet of gas to 7 million cubic feet per day. They are also re-injecting 95 percent of their gas. So, what is being flared is coming from the five percent…”

The payments made by ExxonMobil follow amendments to the Liza Phase One Environmental Permit which was first announced on May 13, 2021. OilNOW previously reported that the revised permit features modified terms and conditions relating to the emission reporting requirements, technical considerations for flaring, and timelines for flaring events. Additionally, the revised permit contains an obligation on ExxonMobil Guyana to pay for the emission of Carbon Dioxide (CO2 equivalent) as a result of flaring in excess of these timelines.

Parsram was keen to remind that the company will not recover the money paid to the EPA.

The Agency had previously explained that the US$45 per tonne payment was guided by the Polluter Pays Principle (PPP), which is prescribed by the Environmental Protection Act of 1996.

The EPA had highlighted that this principle has served as a universal basis of environmental management even prior to 1996 and added that it has continuously developed in its interpretation and applicability as a result of national and international jurisprudence, customary law, as well as international environmental laws and conventions.

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