Thread regarding ExxonMobil Corp. layoffs

Guyana Gov't says ‘highly disappointed’ at Exxon’s inability to solve compressor problem -hints at action

Guyana Government says ‘highly disappointed’ at Exxon’s inability to solve compressor problem -hints at action

By Stabroek News April 15, 2021

The Ministry of Natural Resources says that the government is “highly disappointed” at ExxonMobil’s failure to resolve a gas compressor problem on its oil platform that has led to flaring of gas and a steep drop in production.

As a result of the most recent setback in the repair of the compressor, ExxonMobil has been forced to cut oil production from 120,000 barrels per day to 30,000 barrels per day.

In a statement last night, the ministry said the government is “currently 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”. It did not elaborate further.

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Post ID: @OP+1apx24ya

23 replies (most recent on top)

Exxon says it will restart gas compressor at Guyana platform in June

GEORGETOWN, May 14 (Reuters) - Exxon Mobil Corp said on Friday it will reinstall a gas compressor at its Liza Destiny platform off Guyana's coast in June, after an equipment failure last month prompted the company to slash output.

The company said in a statement that its Liza-1 project was currently producing between 100,000-110,000 barrels per day (bpd) while flaring less than 15,000 standard cubic feet per day. The compressor failure prevented Exxon from producing at full capacity without flaring in excess of Guyana's government guidance.

The company, which operates the project in a consortium with New York-based Hess Corp and China's CNOOC Ltd , initially slashed production to 30,000 bpd after the outage down from nameplate capacity of 120,000 bpd.

Gas flaring emits significant amounts of planet-warming carbon dioxide and has been a source of tension between Exxon and Guyana's government since Liza-1 began production in December 2019, making the impoverished South American country the world's newest energy hotspot.

Exxon's statement comes after Guyana's Environmental Protection Administration said on Thursday that it would fine Exxon $30 per unit carbon dioxide equivalent flared from the project in excess of pre-established levels.

In response, Exxon said in a statement it was in compliance with all terms of its permit and was "working cooperatively with the EPA to support development of a long-term regulatory approach, including flare management."

The company said on Friday that MAN Energy Solutions was performing repairs to the gas compressor at a facility in Houston.

(Reporting by Neil Marks in Georgetown Writing by Luc Cohen; Editing by Sam Holmes)

Post ID: @ujvd+1apx24ya

Exxon moving ahead with designs for Yellowtail FPSO
May 12, 2021 News

…as construction of new shore base to begin in October

Kaieteur News – Guyanese have been given a month to register their concerns with the Environmental Protection Agency (EPA), over the proposed development of a fourth new oilfield in the Stabroek Block—Yellowtail—but the operator is already in the process of undertaking the Front End Engineering Design (FEED) phase, for the expected Floating Production Storage and Offloading (FPSO) vessel for the field.

Additionally, the company is looking to have engineering and construction for a new shore base to support the venture to begin by October of this year.

The information can be gleaned from the project summary that was submitted to the EPA over the weekend. According to ExxonMobil’s timeline for the project development, the FEED aspect for the FPSO commenced in April of this year and is scheduled to be completed by the end of October, at which point in time the new shore base is set to begin construction.

Additionally, the company has also commenced the FEED phase of the subsea system comprising flow lines, risers and umbilicals. Saipem, is the company that has been contracted in the past to provide the subsea systems for the ExxonMobil-led Stabroek Block operations with the company’s vessel currently installing the said facilities for the arrival of the Liza Unity FPSO next month. SBM Offshore is the company that had secured the contracts for the construction and leasing of the FPSOs for the Stabroek Block and is currently working apace on the Prosperity FPSO for the third field development, Payara.

As it relates to the new FPSO, ExxonMobil, in its project summary envisions the final engineering will be completed by the end of next year at which point in time its fabrication and integration is set to commence. The shore base construction is also expected to be completed at the end of next year, after which the facility is expected to begin supporting the development drilling earmarked to begin at the start of 2024 and is expected to last about two years. Production however, is pegged to begin at the end of 2025 with development continuing in tandem with production.

The FPSO and subsea systems are planned to be hooked up and commissioned in the months leading up to the start of production. The proposed FPSO, according to ExxonMobil will be a Very Large Crude Carrier (VLCC) size floating facility with double hull protection.

The vessel is said to be some 1,115 feet long by 197 feet wide by 108 feet deep and will be moored on location, approximately 200 km offshore, similar to Liza Destiny. It will have a production capacity of approximately 220,000 barrels and 250,000 barrels of oil per day and during the early stage of production operations, the project is anticipated to produce an average of approximately 6,600,000 to 7,500,000 barrels of crude oil per month. The FPSO, ExxonMobil said, will have an oil storage capacity of approximately two million barrels of oil within its hull and its mooring system will be designed to keep the FPSO on station continuously for at least 20 years.

According to ExxonMobil, at peak production during Yellowtail’s operation, the FPSO will offload oil to conventional tankers approximately every four to six days and a conventional tanker will be held in position with the assistance of tugs to maintain a safe separation distance from the FPSO.

The FPSO for Yellowtail Development Project will be located approximately 28 km from the FPSO for Liza Phase I, Liza Destiny FPSO; 20 km from Liza Phase II, Liza Unity FPSO; and approximately 40 km from the FPSO for Payara, Prosperity.

Post ID: @pyid+1apx24ya

ExxonMobil submits application for Yellowtail Development Project
May 07, 2021 News

– EPA says citizens have 28 days to submit concerns

Kaieteur News – ExxonMobil’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL), has submitted an application to the Environmental Protection Agency (EPA) to undertake its fourth oil project, the Yellowtail Development Project, within the Stabroek Block offshore Guyana.

According to the EPA, the proposed project will be implemented in multiple stages including: wells drilling and completions; mobilisation and installation of subsea equipment, umbilicals, risers and flowlines (SURF); installation of a floating production, storage and offloading (FPSO) facility; production operations, offloading of crude and decommissioning; and use of support vessels and helicopters throughout the stages.

The proposed project will be undertaken in the marine offshore environment within Guyana’s Exclusive Economic Zone (EEZ) and would also utilise land-based support activities such as marine shore bases, fabrication facilities, warehouses, and storage yards. As a result of the intended developmental activities, the EPA said possible effects on the environment may include impacts to marine water quality, air quality, marine fauna, socio-economic resources, among others.

Furthermore, the EPA has determined that an Environmental Impact Assessment (EIA) is required to be conducted before any decision to approve or reject the proposed project is taken, since this development may impact the environment significantly. With this in mind, the regulatory body said members of the public are hereby invited, within 28 days of the notice issued yesterday, to make written submissions to the Agency, setting out those questions and matters, which they require to be answered or considered in the EIA.

A summary of the project can be viewed on the EPA’s website or uplifted at its Ganges Street, Sophia, Georgetown office at the reasonable cost of photocopying. Pending government approval and project sanctioning, the Yellowtail project is expected to achieve first oil in 2025. Two other oil projects, Payara and Liza Phase Two, are expected to come on stream in 2024 and 2022 respectively.

The discovered resources to date on the Stabroek Block are expected to underpin up to 10 Floating Production Storage and Offloading (FPSOs) with the first six ships expected by 2027.

Post ID: @lgtg+1apx24ya

Exxon contract permits blank cheque spending
May 07, 2021 News

…says if Minister disagrees company can still go ahead

Kaieteur News – Guyana inked a Production Sharing Agreement (PSA), commonly referred to as a contract with Esso Exploration and Production Guyana Limited (EEPGL) and its partners, for the exploration and development of the Stabroek Block in June 2016 and the provisions of the arrangement permits carte blanche spending for exploration.

This, if the Minister with responsibility for the sector or his delegate—identified in this case to be the Guyana Geology and Mines Commission (GGMC)—disagrees with a proposed work programme and budget, it would still be deemed as adopted.

Article Six of the PSA for the Stabroek Block provides for delegation [by the Minister] and co-operation between the Contractor and GGMC. The article provides that the Minister authorises GGMC to provide support in relation to monitoring the petroleum operations carried out by EEPGL and its partners.

This would include the reviewing of a number of reports submitted by the Stabroek Block Contractor, such as, exploration work programmes and budgets. With respect to the submitted work programmes and budgets, the PSA stipulates that should the Minister or delegate wish to make any proposals with regard to what is submitted, then these are to be provided to the Contractor within a reasonable timeframe.

Additionally, the PSA stipulates that they would meet and endeavour to come to an agreement and that the Contractor should take into account the Minister’s proposal and attempt in good faith to reach such agreement. According to the PSA however, if the two fail to find an agreement within two months, the proposed work programme and budget “shall [still] be deemed adopted.”

Exploration costs are recoverable by the Contractor under the Stabroek Block PSA, as long as there is a commercial discovery. The contract also provides that expenses can be recovered from any oil field that is in production in the Block. As such, Guyana has already been presented with a bill in excess of US$460M in pre-contract costs for exploration activities prior to 2015.

EEPGL is also currently moving ahead with plans to spud another well during the course of this month—the Whiptail.

The intention to go ahead with the planned drilling activity for the new well was confirmed this past week, when the US oil major held its earnings call for the second quarter. EEPGL’s parent company—ExxonMobil—Chief Operating Officer (COO), Greg Hill, in giving the announcement, detailed that the Stena Carron drillship has also commenced exploration drilling at the Koebi 1 well and that the exploration well at Whiptail is planned to be spud in May.

He said too, the company plans further exploration and appraisal activities for the second half of 2021 with a total of 12 wells to be drilled. As such, the Noble Tom Madden, the Noble Bob Douglas and the Noble Sam Croft—which recently joined the fleet—will be primarily focused on development drilling, he said.

According to the ExxonMobil COO, the Stabroek Block exploration programme for the remainder of the year will focus on both Campainian Liza Type reservoirs and on the deeper Santonian reservoirs. Additionally, he disclosed that key appraisal activities will be targeted in the South-Eastern portion of the Stabroek Block, to inform future developments.

Speaking to the recent successful discovery at the Urau 2 well, he noted that there were also incremental discoveries at that location, at deeper intervals. According to Hill, that well had encountered approximately 120 feet of high quality, oil bearing sandstone reservoir and was drilled 6.8 miles from the discovery well, implying a potentially large aerial extent.

He noted that too that the Stena Drill Max is currently appraising the Longtail discovery and additional appraisal was planned at Mako and in the Turbot area, “which will help to find our fifth and sixth developments on the block.”

Work is also continuing for the fourth development, on the Stabroek Block at Yellowtail.
ExxonMobil, he said, expects to submit a plan of development to the Government of Guyana in the second half of this year. Pending government approval and project sanctioning, the Yellowtail project is expected to achieve first-oil in 2025.

Post ID: @lkdh+1apx24ya

IEEFA Guyana: Despite contract terms that heavily favor ExxonMobil, missteps continue to plague productivity and drag down returns

ExxonMobil announces production cuts and improved financials – transparency needed

ExxonMobil Guyana ended the year with good news – local operations reached maximum capacity of 120,000 bpd by end of December. The progress was unsustainable; by April announcements came that production would be cut by 75%.

On the heels of December’s good news, the Guyanese government posted the results from its fifth oil lift in February. It showed that ExxonMobil had finished the year with significantly improved, but still insufficient, production. From mid-December 2020 through February 2021 the company had hit its maximum capacity goal for the first time since production started in December 2019.

The year as a whole in Guyana was disappointing as production hit only 66% of maximum. By ending 2020 well, however, ExxonMobil could lay claim to a brighter future without flaring and pandemics cutting into production.

The optimism was short lived. In February 2021 the public was informed for the second time that ExxonMobil was having renewed flaring problems – and that production would be negatively impacted.

Then in April, word arrived that oil production in Guyana would miss its goal by a wide mark. Today, it is now likely that ExxonMobil will not meet its once-certain maximum capacity of 120,000 barrels per day. Production will be cut by 75% and the company gave investors no indication for how long.

Back in Houston, ExxonMobil let its shareholders know on March 31st that the first quarter results in 2021 for the company as a whole had improved from the very poor finish for the company in 2020. The final report for the first quarter will be disclosed in early May. The late March disclosure by ExxonMobil made clear that sector-wide changes in oil and gas prices were driving the company’s modest Q1 improvement. In January, IHSMarkit analysts pointed out that ExxonMobil’s positive outlook in Guyana was driven by the fact that Guyana received a lower-than-average take from the reserves, not by the production success of the venture.

Overall, the government of Guyana has cleared approximately $247 million. This means ExxonMobil and its partners have received about $1.45 billion according IEEFA’s estimate. Under the terms of the contract, Guyana receives 14.5% while Exxon and its consortium partners (Hess, CNOOC) receive 85.5% of net sales. The contract is considered extremely advantageous for partnering oil companies.

A lot of numbers will swirl around so long as Guyana and ExxonMobil refuse to issue agreed-upon goals, solid production numbers, consistent explanation of the factors influencing the project and how all of this relates to Guyana’s budget. Greater transparency is needed by the Guyanese government and ExxonMobil if the public is to be confident in the results of the oil project. Without an overall plan announced to the public about the oil production, the current discussion about a new natural gas project is a high-risk and speculative undertaking.

Tom Sanzillo ( is IEEFA’s director of financial analysis.

Post ID: @dyna+1apx24ya


Typical arrogance which has been the downfall of this company. If you believe for a minute this isn’t impacting our relationship with the Guyana government and citizens you are an id––t. The downtime is having a huge impact on the governments income. This is a huge issue and fools like you pretend it isn’t. Don’t make promises you can’t keep to people.

Post ID: @3rgj+1apx24ya

XOM is operator...Not Hess. XOM with conduct the repairs. Get your facts right. Also there is no shareholder agreement as quoted above, only a PSC and JVA. PSC generally do not give govt rights to the types of penalties quoted but there could be recovery from the contractors under the procurement or equipment guarantees agreements with equipment suppliers. As stated earlier...These Start–up issues happen all the time on every major project. Also, this is a leading edge one of a kind compressor.....Serial number one....Break in time is expected with custom equipment. Probably a vibration problem causing failure.

Post ID: @3tyv+1apx24ya

Govt. goes after agreements between ExxonMobil, Liza Destiny manufacturer to determine liability
Fourth gas compressor malfunction…

Kaieteur News – Vice President, Dr. Bharrat Jagdeo, says the Government is exploring whether ExxonMobil is liable for its latest flash gas compressor malfunction aboard the Liza Destiny.

During a recent interview, the official who has responsibility for overseeing matters in the petroleum sector disclosed that the administration has a “great interest” in ensuring that this equipment malfunction is resolved. Due to the equipment failure, ExxonMobil was forced to cut its oil production to 30,000 barrels per day (bpd), a significant reduction from its planned 120,000 bpd.
Against this backdrop, the Vice President said reduced production is a loss of output, and consequently, a loss of income and revenue.

He indicated that the Ministry of Natural Resources has since dispatched a letter to ExxonMobil, seeking a copy of the Shareholder’s Agreement. This, he said, will examine whether liabilities accrue to the operator – Exxon – for “non-performance or faulty performance.”

The VP noted that the Ministry has also requested the agreement between Exxon and the supplier of the Floating Production Storage and Offloading (FPSO) vessel – SBM Offshore.

“If there are issues of non-performance that result in a loss of revenue and income to the State of Guyana and to the shareholders, then the appropriate penalty must be introduced. That is the position we have taken,” he stated.

Following the announcement of the equipment failure, the Government had said that it is “highly disappointed” with the operator’s inability to resolve this situation to date.

The Administration said it will continue to monitor the levels of daily crude oil output and flaring to determine an economically feasible level of production during this period.

Meanwhile, the Ministry said Exxon’s subsidiary, Esso Exploration and Production Guyana Ltd (EEPGL) and its contractors SBM and MAN Energy Solutions are actively investigating the failure, and assessing repair requirements.

The Government, through the Ministry, the Guyana Geology and Mines Commission and the Environmental Protection Agency, has been receiving regular updates since this matter arose. Furthermore, the Government recently met with EEPGL to discuss the subsidiary’s findings and plans for a speedy resolution of the issue.

Post ID: @2zwh+1apx24ya

I love how the pr bots constantly censor these boards.

Post ID: @2pkp+1apx24ya

The gov’t is making these statements publicly but be sure that they are fully aware that EM and co. are drastically transforming their country, which includes lining their own pockets as well.

Post ID: @1ujx+1apx24ya

Chevron operated Gorgon LNG was miserable in the beginning.
It is now considered a success after a couple of years of up and downs.
Guyana will be likewise.
Y’all just need to chill out. Reducing flaring reduces production. We, as operators, cannot win for losing.
This was a fast track project which always results in errors.

Post ID: @1rwj+1apx24ya

Everyone at ExxonMobil is trying to line their pockets. No one cares. Guyana for some was expat greed or opportunity to advance their careers. No one cared about the corporation. Investors should come and flogg every individual involved.

Post ID: @1bmv+1apx24ya

And yet we will continue to reward SBM and MAN with more orders.

Post ID: @1gde+1apx24ya

The center of the gulf once lead the world in compressor and turbine experience. Horrible engineering machinery sls drove the best engineers to Shell and now the department head and engineering sls are quickly ki––––g off what’s left in machinery and the the best of the rest of the engineering disciplines. Were the managers disciplined? No, they were promoted. I’ve seen this time and time again. Nothing will change for the better until the dh and sls management are replaced. Throw that Wonderful Tech center kool aide that’s doing so well on that compressor and let’s see how that works for you or better yet send either the BR constrained engineering dh or SLS down there to “ manage” getting it done. That’s what’s wrong within the company. Keep promoting the wrong mangers that wreck the disciplines then when c––p goes down, the company pays too much to get outside help. Playing musical chairs with engineers and treating great engineers that wish to remain technical as second class citizens is why we are in the situation we are in. When an untouchable vindictive dh is so arrogant, he continuously makes crude remarks to and about “his” engineers, it’s time for him to move, along with his yes man engineering sls’s. Morale is the worst I’ve ever seen it under this management and no sign of looking any better. Dealing with these folks is bad enough but removing trust, pride, dignity, hope and seeing good engineers justifiably feel the way they are is very demoralizing. That’s the reality. Glad I left. My sanity was worth it.

Post ID: @1dss+1apx24ya

They should be leaning on the expertise of the BTC’s to solve this issue LOL

Post ID: @1ada+1apx24ya

Now there is a serious viable reason to give those directly involved a real PIP and heaven h▯. Holy cow, that is horrendous.

Post ID: @1zqh+1apx24ya

Nothing surprising here. The projects organzation pressured and incentivised purely by cost and schedule. Something else has to give then...

Post ID: @1rjl+1apx24ya

Disgusting company. Polluting the world and polluting young talented minds to create DWood like zombies.

Post ID: @1nkj+1apx24ya

This is not a "little" compression issue. It also appears that XOM is taking the lead in the repairs, not Hess according to ExxonMobil Guyana press releases

ExxonMobil experiences further problem with gas compressor, output cut to minimum

ExxonMobil today said that it had experienced further problems with its troubled gas compressor and as a result production has been slashed.

Exxon’s renewed problems with its gas compressor in January this year led to controversial flaring from its Liza-1 platform.

After months of flaring it had embarked on the third and final phase of its testing of the repaired equipment when the new problem arose.

A statement today from ExxonMobil follows:

“As we conducted the final testing phase of the reinstalled flash gas compressor and other components of the system on the Liza Destiny FPSO, we encountered an additional problem with the discharge silencer.

“A team from SBM Offshore, MAN Energy Solutions and ExxonMobil are on site to assess repairs, with support from engineering experts in Europe and the USA. We have reduced 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.

“Relevant government agencies have been notified and we are continuing to work with officials to determine the next best steps.

“ExxonMobil Guyana is extremely disappointed by the design issues and continued underperformance of this unit, and will be working with the equipment manufacturer MAN Energy Solutions and the vessel’s operator SBM to rectify the situation.

“This performance is below ExxonMobil’s global expectations for reliability.”

Post ID: @fuo+1apx24ya

We've weathered third world governments "disappointments" on nearly every continent for decades. This is nothing new. Aceh, Chad, Nigeria, PNG, Norway, and even Teodoro at times. No worries here. Hess has some great Mechanical Engineers and will work this little compression issue out if EM allows them to...

Post ID: @mml+1apx24ya

And this is how you k▯▯l the goose that l▯▯d the golden egg.

Post ID: @wcs+1apx24ya

Didn’t GP Declare Project Success?

Post ID: @pxk+1apx24ya

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