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ExxonMobil and its partners are using the Liza Destiny FPSO at Liza-1 (Photo: ShipSpotting.com)

ExxonMobil cuts production again at Liza-1

THE US super-major ExxonMobil has ramped in the diaspora, wherever the skillset is,” he said.
oil production back down at the Stabroek block Guyana’s government has yet to adopt regu-
offshore Guyana, following the discovery of new lations outlining requirements and expectations
problems with gas compression equipment. for local content in oil and gas schemes.
Vincent Adams, the executive director of the Ali’s comments drew a sceptical reaction
country’s Environmental Protection Agency from David Blackmon, a US oil industry veteran
(EPA), told Reuters last week that ExxonMobil who now works as an independent consultant.
was limiting output to 100,000 barrels per day In an article published by Forbes, Blackmon
(bpd) at Liza-1, the only producing section of said Guyana’s new president should take steps to
Stabroek. The company had said last month ensure that local content rules struck the proper
that it hoped to bring yields up to 120,000 bpd balance, taking into account the true capacities
in August. of local workers and the need to establish an
According to Adams, the US giant is taking attractive investment environment, as well as
this step because of mechanical problems with the desire to improve the local economy.
the gas compressors installed in a gas re-injec- Georgetown has not said whether it would
tion well at Liza-1. It is reducing output so that make ExxonMobil and the other Stabroek part-
it does not have to flare all the gas it cannot put ners subject to any new local content regula-
back into the reservoir, he explained. tions. When the group signed its contract, there
He did not say when the company might were no such laws on the books.
be able to resolve the problem. “We know that ExxonMobil has made more than 15 oil dis-
they’re doing their best to try to fix it, but the coveries to date at Stabroek, a block that lies in
bottom line is it’s not fixed,” he remarked. the deepwater section of the offshore zone, and
ExxonMobil, for its part, has not divulged Liza-1 was the first to launch commercial pro-
many details either. “We continue to safely com- duction. Equity in the block is split 45% to oper-
plete final commissioning of the gas handling ator ExxonMobil (US), 30% to Hess and 25% to
system,” a company spokesperson told Reuters China National Offshore Oil Corp. (CNOOC).
on August 21. “Once the system is fully com- The partners hope that Stabroek will eventu-
missioned, we will be able to produce at full ally yield as much as 750,000 bpd of oil. They are
capacity.” developing the block in multiple stages and have
already approved plans for the second phase,
Local content which will be known as Liza-2. This phase of
This setback occurred shortly after Guyanese operations is due to start in mid-2022, and the
President Irfaan Ali said that his administration partners will use the Liza Unity, another FPSO,
wanted to adopt stricter requirements for the use to extract crude from Liza-2. The ship is capable
of local content in oil and gas projects. Future of handling up to 220,000 bpd of oil.
investors will have to invest in local capacity in Payara, the third stage of the project, is sched-
order to retain their operating licences, he told uled to achieve first oil in 2023 but may not be
reporters in Georgetown on August 18. able to reach that target unless a final investment
“We are sticking to our commitment in decision (FID) is taken soon. The group has said
ensuring that the industry, as far as possible, it wants to use another FPSO to exploit this
[provides] opportunities for not only the local section of the block, which will yield another
private sector but Guyanese as a whole, here and 220,000 bpd of oil. ™

P14 www. NEWSBASE .com Week 34 27•August•2020