Oct 24, 2020 News
Minister of Natural Resources, Vickram Bharrat, has disclosed that the PPP/C Administration is acutely aware of the importance of real-time monitoring of oil production in the Stabroek Block, hence discussions have already started towards this end with American oil giant, ExxonMobil. The Minister made this revelation during a telephone interview with Kaieteur News yesterday.
During the call, the official was asked to provide an update on the government’s progress on this matter. Minister Bharrat said, “We are moving ahead with this. It entails a fire optic cable coming to shore from the operations so that we can set up a data room for the remote monitoring of the production. I would love to see that coming on board as soon as possible.”
Further to this, Minister Bharrat was asked to say if the Guyana Telephone and Telegraph (GTT) would still be responsible for bringing the cable for the project as this is what was planned by the previous regime. Minister Bharrat said he would not be able to speak on that front but what he is aware of, is that ExxonMobil is responsible for bringing the cable. When the project gets underway, the official said that Guyanese, especially those connected to the Department of Energy, would be partaking in the process to ensure the transfer of skills as it relates to monitoring the data room.
Quizzed to say who are the parties involved in the current talks and whether there is an international contractor already in play, Minister Bharrat said, “No, for now it is just discussions between the government and ExxonMobil.”
For more than five years, Kaieteur News would have highlighted the importance of real-time monitoring of oil production while referencing examples of countries around the world that ensure such systems are in place to protect the people’s patrimony. One country which this newspaper has showcased in this regard is the Kingdom of Saudi Arabia.
The custodian of the Kingdom’s petroleum is the National Oil Company (NOC) of Saudi Arabia, Saudi Aramco.
In a 2008 CBS: 60 Minutes documentary, Journalist Lesley Stahl was given a tour of Saudi Aramco’s command centre by its former Chief Executive Officer (CEO), Abdullah Juma’ah. He described it as the nerve centre of the company’s operations; a room with a 220-ft digital screen, where engineers scrutinize and analyze every aspect of the company’s operations.
“Every facility in the Kingdom, every drop of oil that comes from the ground is monitored in real-time in this room, and we have control of each and every facility, each and every pipeline, each and every valve in the pipeline. And therefore, we know exactly what is happening in the system from A to Z,” Juma’ah explains.
In Guyana’s case, the need for real-time monitoring with the use of the latest technology has been expressed ad nauseam since the Production Sharing Agreement (PSA) with ExxonMobil for the Stabroek block contains zero provisions regarding the nation’s rights to monitor readings of its petroleum and gas. In fact, the International Monetary Fund (IMF) has said on several occasions that Guyana should invest in the latest technology that would record accurate measurements of the quantity being extracted and exported by ExxonMobil and its partners. It emphasized that this technology is necessary to ensure proper reconciliation of readings submitted by the oil companies versus what the State has recorded. Kaieteur News understands that it paves the way for early detection of production loss that could cost the State billions of dollars in revenue.
Furthermore, the IMF had said that if Guyana makes use of the latest technology, accurate meter reading of the oil can be conveyed to the Guyana Revenue Authority’s customs department, therefore eliminating the need for a permanent or regular presence of customs officers during the oil lifting operations.
While the use of the latest technology will bring immense benefits, the IMF stressed that GRA’s Customs Department should not relinquish its right to make visits to the Liza Destiny, Guyana’s first Floating Production Storage and Offloading (FPSO) vessel. In fact, the international agency said that Customs officers should visit the FPSO from time to time to ensure that agreed procedures are being adhered to by ExxonMobil as well as to assert Guyana’s sovereignty over FPSO operations.
The IMF reminded that the FPSO is a significant component of the Liza Phase One development which involves four undersea drill centers with 17 production wells. It has a production capacity up to 120,000 barrels of oil per day and an overall storage volume of 1.6 million barrels.
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