Page 4 - LatAmOil Week 28 2020

LatAmOil COMMENTARY LatAmOil
CARICOM observers monitored Guyana’s election on March 2 (Photo: CARICOM)
Guyana’s electoral dilemma
The current government’s response to the outcome of elections in March is drawing widespread condemnation – and also slowing down the pace of upstream operations
WHAT:
As ExxonMobil brings Liza back on stream, the US
is penalising Guyanese officials who have stalled the electoral process.
WHY:
The political impasse means Guyana cannot give a green light to ExxonMobil’s plans.
WHAT NEXT:
Further delays will slow production and stem the inflow of oil revenues.
FROM an operational point of view, Guyana’s nascent oil industry appears to be in a reason- ably good place. ExxonMobil has resumed production at the country’s rst active oil eld a er resolving technical problems related to gas re-injection and is gearing up for new explora- tion work at a nearby site.
But from a geopolitical perspective, Guyana is under pressure. e incumbent government’s response to its loss in elections held on March 2 has been condemned by a number of mul- ti-lateral organisations, as well as the US and the Commonwealth of Nations. If the situation is not resolved, ExxonMobil and other inter- national oil companies (IOCs) working in the o shore zone will not be able to secure approval for new projects and upstream activity will grind to a halt.
is essay will examine recent developments in the South American state.
Operations
ExxonMobil’s development work at Liza, the rst producing eld within the Stabroek block, ran into trouble in early June.
According to previous reports, the company and its partners had to reduce oil output follow- ing the discovery of technical problems with the compression systems it uses to re-inject associ- ated gas back into the reservoir. is incident brought yields down to 25,000-30,000 barrels per day (bpd), marking a drop of about 65% on the gure posted in early May.
e US giant moved as swi ly as it could to address the problem, and by mid-June it had brought two out of the three a ected gas com- pression systems back online. As a result, it was able to resume gas re-injection operations and uphold its pledge to the Guyanese government to keep ared gas volumes at or below 15mn cubic feet (424,800 cubic metres) per day.
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w w w . N E W S B A S E . c o m Week 28 16•July•2020