Oil production safety limits

May 17, 2024 Editorial

Kaieteur News – There must be some limit to how far Guyana’s Vice President and Chief Policymaker would go to defend ExxonMobil. Apparently, there is no such limit, for there was Jagdeo defending ExxonMobil’s pushing its daily production levels at the offshore oilfields above the recommended safety limits. When he should be concerned, manifest anxieties about what could be the result for Guyana in the event of a big oil spill, Jagdeo is content to shirk his duty and hide behind the Environmental Protection Agency (EPA). He fiddles with bland generalities. For someone who is usually so quick to spot a weakness or missing link in many other matters and places, it is baffling how Jagdeo goes out of his way to defend whatever ExxonMobil does while pretending to be knowing and confident.

The recommended production safety limits for Liza 1 and Liza 2 could not be clearer. For Liza 1, it is 120,000 barrels daily and for Liza 2, it is 220,000 barrels. ExxonMobil is producing 30,000 barrels more per day in each of those two fields. In the instance of the Liza 1, the daily overproduction is a hefty 25% more, while it is about 15% above the safety limit recommended by experts for Liza 2, as the completed studies indicate. A safety limit can be compared to a line that should not be crossed. Sensible and careful people give themselves additional protection by setting a limit below what is recommended. It could be anything ranging from 5,000 to 10,000, even 15,000 barrels fewer in daily production levels. It is commonsense, and business managers who hold safe operating limits as a serious matter, a high priority, usually give themselves that cushion. Hence, it is neither improper nor unreasonable to think that a national leader with the insights and power of Chief Policymaker Jagdeo would see the safety limit issue in this conservative manner. If he did, he would insist to ExxonMobil’s Guyana Country Head, Alistair Routledge, that this must be the way. That is, production must stay close to the recommended safety limit, and never, ever, go above it. It is hard not to think that, though, Guyana’s oil czar knows what the best thing is to protect Guyana, he seems not to care. Truth be told, it could be said with some accuracy that Jagdeo is going in the opposite direction. Instead of working assertively and with authority to look out for Guyana by reining in ExxonMobil, the company is given the fullest freedom to do as it pleases. According to Jagdeo, by his calculation, ExxonMobil is breaching the recommended safety limits of Liza1, Liza 2, and the third oil project, Payara, by a total of 100,000 barrels daily. This is alarming, and yet this country’s Chief Policymaker is the picture of nonchalance.

According to Jagdeo, he has received guidance from the Ministry of Natural Resources: “So the question has been if you’re producing more than what the initial announced capacity of these FPSOs whether you are doing so safely and so the Ministry has assured me that before this is done, they have reviewed this.” What is the basis of this assurance given by the ministry? He continued by saying that the EPA has reviewed the optimisation plans submitted by Exxon to increase daily oil production. “They have said that this is safe, so it’s safe and it was on the basis of optimisation.” Obviously, Jagdeo must rely on people he calls ‘the technical people’, but he himself has repeatedly bemoaned the fact of Guyana’s stark lack of capacity in many areas, none more than in the soaring oil sector. Guyanese have already seen the EPA for what it is, which is a shell agency, and nothing but an empty front subject to the manipulations of its political masters. Unsurprisingly, it makes sense for Jagdeo to hand the hot potato safety issue to the EPA and insulate himself by talking about “optimisation” and “independent check” and clearance being given by the “technical people” at the ministry.

Guyana has a huge hole with technical expertise, one which ExxonMobil maximises to its advantage (and local danger), and Jagdeo is playing these reckless games. ExxonMobil breaches safety limits, Jagdeo winks and yawns.

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chief policymaker, Environmental Protection Agency (EPA), ExxonMobil, Guyana, Vice President

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