May 01, 2023 News
Kaieteur News – Exxon is pushing the limits of safe oil production with their Liza Phase 1 and 2 projects. Kaieteur News had reported that Exxon managed to produce over 400,000 barrels per day (bpd) in recent months. These projects were designed to safely produce oil at 340,000 barrels per day (bpd) together. With the latest production numbers on the Petroleum Management Programme for March, Exxon continues to surpass 400,000 bpd on multiple days.
Originally designed to produce at 100,000 bpd with safe sustainment at peaks of 120,000 bpd, the Liza Phase 1 environmental impact assessment said oil production can go as high as 144,000 bpd. However, Liza Phase 1’s production since debottlenecking in 2022 has surpassed this, producing over 150,000 bpd. For the sake of emphasis, this project is ACTIVELY PRODUCING oil at levels higher than was stated as safe in documents Exxon itself submitted to the Environmental Protection Agency (EPA).
Exxon also plans to undertake similar debottlenecking work for Liza Phase 2 in the second half of 2023. According to the EIA, this project has a design rate of 220,000 bpd, but a safe operating limit of 250,000 bpd. Hess President Greg Hill said in the last earnings call that the aim for Liza Phase 2 is 250,000 bpd. While Liza Unity has produced above its original design rate recently, it has not gone past the safe operating limit. However, the continued push for increased production in these projects may pose potential risks to safe operations.
Vice President Dr. Bharrat Jagdeo’s position is that the country’s oil resources should be produced as quickly as possible. Jagdeo’s personal depletion policy, aptly encapsulated by the phrase “drill baby drill!” has become the guiding principle of the government’s management of the petroleum sector. The Vice President has said that demand for fossil fuels is either going to be static or declining in the next 15 to 20 years due to the implications of climate change and the global transition to cleaner energy sources. However, he believes that Guyana has a window of opportunity to extract its oil resources before demand starts to decline, and this is why he wants to extract the oil as quickly as possible.
According to Jagdeo, Guyana’s low breakeven costs and sweet, light crude give it an advantage over other countries. The government’s strategy is to use portions of the oil to build world-class infrastructure and education, while putting some aside for inter-generational equity. Jagdeo believes that is the best course of action for Guyana’s economic development.
There is an alternative view that Guyana should encourage production at a slower pace so the government can build capacity to regulate the sector properly. However, Jagdeo has refused this perspective, arguing that Guyana cannot wait until its capacity is perfect to develop its resource.
Was Jagdeo honest when he made those promises?
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