Saturday, October 1, 2022

Profitability for Guyana, Exxon is affected when production is lowered, company making ‘genuine efforts’ to address flaring – Bharrat

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Guyana’s Natural Resources Minister, Vickram Bharrat says he is convinced that ExxonMobil is desirous of being a good environmental steward and that the company is making “genuine efforts” to address challenges it has been facing with the gas compressor system on the Liza Destiny FPSO.

Bharrat told OilNOW during a recent interview that the issues with the gas compressor have not only been a matter of concern to the government but ExxonMobil too.

“When production has to be lowered when these technical issues arise it affects both parties’ profitability, but we got the commitment from them that they want this matter resolved,” he said. “Neither side wants flaring to be above pilot levels.”

He pointed out that President of ExxonMobil Guyana, Alistair Routledge, has been in constant communication with President, Irfaan Ali; Vice President, Dr. Bharrat Jagdeo; and himself on resolving the gas compressor woes. Mr. Bharrat said the meetings have been on a month-to-month basis.

“Up to a few weeks ago I spoke with Alistair, and I am convinced they are trying their utmost to be good environmental stewards. But we need to understand that this problem is more than the eyes could see,” expressed Bharrat.

He further noted that Routledge has given the government assurances that several experts would be going to Germany very soon to study the data gathered on the compressor.

Even as he noted his satisfaction with ExxonMobil’s efforts, Bharrat was keen to note that the government intends to be a shrewd regulator of the sector, hence the modification that was made to the Liza Phase 1 Permit.

The revised Environmental 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.

That payment is made to the Environmental Protection Agency (EPA) and is calculated at the rate of US$30 per tonne of CO2e.

Thus far, the Mr. Bharrat said Guyana has made over US$1M on the excess flaring approved by the EPA. He noted that this was for the company’s first application to flare for 30 days after May 13. He said another extension for the same time period was granted. When this expires, Guyana stands to gain close to US$1M.

“But even as we are earning something for the flaring being done now, it is not something this government encourages. In fact, we don’t want to continue this for as long as possible. And let me make it clear, this is not a licence to pollute but to deter,” he stated.

When contacted this week, ExxonMobil Guyana’s Public and Government Affairs Advisor, Janelle Persaud said the company has started the final phase of testing. Persaud said an update would be provided when this is completed while adding that production at the Liza Destiny FPSO will fluctuate during this time.

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