Opposition admits flaws in its poorly negotiated Liza permit

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…Govt to correct to address flaring – Bharrat

ExxonMobil’s current level of flaring offshore Guyana raised concerns from Government on the poorly-negotiated Liza permit that was signed by the former coalition Government.

On Friday, Natural Resources Minister Vickram Bharrat told the National Assembly that when the document expires next year, it will be corrected to fix this inherited issue. In the permit, ExxonMobil is allowed to flare up to 14 billion cubic feet of gas.

“It is a known fact that we inherited this issue. We inherited this problem. The EPA permit under the APNU/AFC permitted Exxon to flare 14 billion cubic feet of gas. This was the agreement signed by the APNU/AFC Government. They signed that. In the Liza Production Licence, which will expire next year, we will correct their wrongs once again.

A motion was brought by Member of Parliament, David Patterson asking for the Liza permit to be strengthened to that of the Payara permit – which was signed by the People’s Progressive Party/Civic. According to Bharrat, this indicates that the coalition realised where they flawed in their bargains.

Liza Destiny flaring gas offshore Guyana (Annette Arjoon photo)

“I’m happy that the Honourable Member recognise that the Payara permit is far more superior and better negotiated than the Liza permit. Our hymn tune for the oil and gas sector will and always be transparency and accountability. That is our promise to the Guyanese people. We will ensure that the oil does not become a curse to our country and people,” the Minister emphasised.

Earlier this week, oil giant ExxonMobil said it was expecting the technical team at the MAN Energy Solutions workshop in Germany to make recommendations when it comes to the repairs and upgrades to its flash gas compressor, so that the company’s operations offshore Guyana can be returned to normalcy.

In an update provided on Tuesday, Exxon’s Governance and Public Affairs Advisor Janelle Persaud explained that the flash gas compressor is currently being reassembled at the German workshop.

“Over the weekend, the MAN team completed adjustments to achieve the required clearances on the discharge side of the compressor and has started verifications of internal machinery profiles. Technical experts are also finalising near-term recommendations for repair and potential upgrade to the discharge silencer,” she explained.

When it comes to the Liza Destiny Floating Production Storage and Offloading (FPSO) vessel, Persaud explained that Exxon continues to manage production and flare levels, while attempting to maintain a careful balance between sustained production and environmental considerations. It was only a few days ago that ExxonMobil had announced that an “axial vibration” was to blame for the failure of its compressor, which had to be shipped to Germany and which had led to the company’s controversial routine flaring offshore Guyana.

In the latter part of January, Esso Exploration & Production Guyana Limited (EEPGL) had announced that it was experiencing technical problems with the seal on Liza Destiny’s flash gas compressor. The problem resulted in Exxon having to reduce its production and also conduct routine flaring.

It was subsequently revealed that Exxon had been flaring 16 million cubic feet of gas per day, an increase from the volume of flaring the company conducted last year which reportedly ranged between 12 and 15 million cubic feet.

It is a situation which Vice President Bharrat Jagdeo had referred to as “unacceptable”. The former President had explained that when one does the calculation at a rate of $30 per tonne, it would work out to a fine of $39,000 per day. Added to this is the fact that, so far, the volume of flaring reported by ExxonMobil has not been independently verified by the Government.

“We’ve been looking at it, and the EPA has been looking at the issue. Clearly, it is unacceptable… Exxon is flaring using about 16 to 18 million standard cubic feet of gas per day. So, the EPA has worked this out and they said that’s about 1300 tonnes of carbon emitted per day,” Jagdeo was quoted as saying.