Guyana Eyes Moves To Offset Oil Cuts

(Argus, 16.Apr.2021) — Guyana is considering unspecified economic measures to cushion the impact of repeated production cuts from US major ExxonMobil’s deepwater Stabroek block, the natural resources ministry said.

Since it started oil production in December 2019 there have been repeated technical issues on the Liza Destiny floating production, storage and offloading (FPSO) vessel that have cut output. This week production was cut from 120,000 b/d to 30,000 b/d because of such issues.

The government said it is “highly disappointed” that ExxonMobil has been unable to rectify recurring problems, and “… is examining the implications of the loss of output, and consequently loss of income and revenue, including measures that it may have to institute to protect national interest.”

The latest problem is with a discharge silencer that is part of a recently repaired and reinstalled gas compressor, ExxonMobil said. The company told Argus it is “extremely disappointed by the continued underperformance of this unit.” It is working with compression equipment manufacturer MAN Energy Solutions and the FPSO’s operator, SBM Offshore, to rectify the situation.

This is the third time the technical problems have forced the company to trim output on the Liza Destiny. The issue that first arose last year suppressed production to a low of 27,500 b/d in June 2020, and impeded the FPSO from reaching a 120,000 b/d target until December, nine months behind schedule.

ExxonMobil has not indicated when it expects the problem to be rectified and crude output increased.

The latest problem with the gas compressor forced ExxonMobil to reduce production “to a minimum level that mitigates formation of hydrates in subsea systems, maintains gas injection and fuel gas to the power generators, and minimizes flare,” the company said.

____________________

By Canute James