The second cohort of SBM Offshore's Trainee Technicians received training in Canada this year, as part of a one-year training and capacity building programme.

SBM Offshore is forging ahead with its internship program, offering students the opportunity to harness their potential and be integrated into Guyana’s oil and gas sector.

Applications opened on October 1, the company said in a public notice.

The internship programme is aimed at developing the capacity of students who meet the established requirements to prepare them for an exciting and challenging role within the company’s Guyana operations.

Builder of Guyana FPSOs has kept its promise, says Human Resource Manager

“Successful candidates will be afforded the opportunity to gain on-the-job experience through a multifaceted and multidisciplinary integration into the company,” SBM Offshore said in its notice.

Students would be given a chance to learn under SBM Offshore’s Supply Chain and Finance Departments, its Operations Intelligence Performance Optimisation Centre (OIPOC) and its Health, Safety, Security and Environment (HSSE) Department as well.

SBM Offshore also has its Graduate Engineers Trainee Programme, geared at providing foundational knowledge needed to launch and accelerate careers in the industry.

Interested candidates have until October 14 to submit applications to http://sbmoffshore.com/careers.

SBM Offshore has devoted significant effort to local participation in Guyana’s oil and gas sector. It was the first prime contractor of ExxonMobil Guyana to receive its Letter of Approval for its 2022 Local Content Master Plan.

@Former Member posted:

SBM Offshore looking for more Guyanese to join its growing team

By OilNOW --- October 13, 2022 --- 0 --- Source --- OilNOW --- https://oilnow.gy/featured/sbm...in-its-growing-team/

Hey D_G,  is this the  new Cape Breton  welcoming sign?

New Sign at Canso Causeway Welcomes Motorists to Unama’kik

In recognition of Mi’kmaq people, language and the significant geographical location, motorists travelling across the Canso causeway will be welcomed by a new sign in Mi’kmaq, Pjila’si Unama’kik.

“Increasing knowledge and awareness about Mi’kmaq language and culture is important to understanding our shared history," said Premier Iain Rankin, who is also Minister of L’nu Affairs. “This new sign is one way to recognize Mi’kmaq connection to the land and home of many Mi’kmaq communities on the island.”

At a ceremony earlier today, July 9, Premier Rankin, along with Mi’kmaq elders and chiefs, Brenda Chisholm-Beaton, mayor of Port Hawkesbury, and guests unveiled the prototype sign. The actual sign will be installed on the far east entrance to the island next week.

There are other areas of the province with Mi’kmaq signs to help celebrate and teach people about the history, language, and geographical area.

An oil tanker approaching the Liza Destiny FPSO offshore Guyana.

Guyana could emerge as a major LNG exporter in coming years as massive hydrocarbon discoveries continue to mount off the country’s coast and output from neighbours such as Trinidad and Tobago continue to decline.

In his most recent OilNOW column published on Friday, Arthur Deakin, Director of Americas Market Intelligence’s energy practice, said with Russia’s discounted oil and liquefied natural gas (LNG) being diverted to Asian buyers, and its gas deliveries to Europe falling by 80%, the world’s energy markets have been forced to shift and recalibrate.

This search for alternative sources of energy is creating major opportunities for countries with the ability to help fill the gap, and Guyana, although just a newcomer to the oil and gas arena, is emerging as one of the better positioned players.

Given the complexity and extensive capital needed to export LNG, Deakin said only two countries currently do so in Latin America: Peru and Trinidad & Tobago. Peru LNG, the consortium responsible for the country’s exports, increased its LNG deliveries by 70% in the first half of 2022—shipments to Europe alone, saw a 46-fold increase. To ensure a constant flow of export revenues, he said the Peruvian government appears to have discarded the renegotiation of the consortium’s Camisea contracts and has encouraged them to export at full capacity of 4.4 MTPA (million tons per annum).

“As the government narrows in on supplying natural gas to the local population, there are no planned increases for LNG exports in Peru,” Deakin pointed out.

Meanwhile, Trinidad and Tobago, on the other hand, saw LNG exports decrease 2% in the first five months of 2022.

“Trinidad is struggling with declining gas reserves due to its mature gas fields, unappealing fiscal terms, and overshadowing discoveries in neighbouring countries,” the analyst pointed out.

Deakin said unless sanctions are lifted on Venezuela, or a major gas discovery is made, both of which are rather unlikely, Trinidad will see a continued decline of its oil and gas industry. Trinidad’s LNG exports, he said, have fallen over 50% since 2010.

“Trinidad’s decline, coupled with Peru’s focus on the domestic market, creates opportunities for new players to enter the LNG export market. Guyana and Suriname, the emerging superstars of the region, could have 13.2 and 10.8 Tcf (trillion cubic feet) of natural gas reserves, respectively, based on AMI’s preliminary estimates,” Deakin said.

Miniscule domestic demand in Guyana and Suriname means that there is plenty of excess gas that can be exported via ships or pipelines, he stated, while pointing out that both countries have direct routes to Western Europe and Northern Brazil.

In Suriname, U.S.-based Phoenix Development Company has partnered with the Port Authority of Suriname to develop a U$1.2 billion LNG liquefaction plant and export terminal with a planned output of 4 MTPA.

“In Guyana, where the total estimated recoverable resources have surpassed 11 billion barrels of oil equivalent, LNG exports could reach nearly 5 MTPA. This volume alone could replace 4% of all Russian gas that went to Europe in 2021,” Deakin said.

As oil and gas deliveries from Russia continue to dwindle, European nations will seek alternative sources of energy. As reported by OilNOW in September, Germany, Europe’s biggest oil consumer, has been scrambling to find new energy sources and this has already seen rare imports in recent months from countries such as Guyana.

Oil and gas workers at a shore base facility in Guyana

ExxonMobil Guyana is seeking a project manager for the construction of the national oil and gas training institute it is building, in partnership with the Guyana government.

The institution, styled the ‘Guyana Technical Training Center Inc.’, will be situated at Port Mourant Berbice, Region Six, next to a training centre run by the Guyana Sugar Corporation (GuySuCo).

ExxonMobil outlined robust local content requirements which will be applied to the procurement process.

Several months ago, the oil major had advertised for a firm to construct the institute.

It is expected that this learning institute will be constructed on 50,000 to 60,000 square feet (sq ft) of prime land. It will house dormitories, a dining hall, classrooms, admin rooms, laboratories, a guardhouse, operation, and storage facilities, covered walkways, and a gazebo. An open training area of 15,000 to 20,000 square feet will also be part of this facility.

President Dr. Mohamed Irfaan Ali had said that over US$100 million will be invested into the training facility.

The need to upskill Guyanese workers – and fast – was brought on by Guyana’s Local Content Act. The new law requires companies to, among other things, have Guyanese serve among the overwhelming majority of their workers.

Companies are eager to expand their business to provide services in Guyana’s ever-expanding oil and gas sector. And at this juncture, the labour force, with its current skill levels, is not enough.

SBM Offshore, the company building and operating the floating production storage and offloading vessels operating offshore Guyana, is playing a lead role in the establishment of a key component of the training facility.

“One of the things we are partnering with Exxon with is to have a safe live plant made available for anyone working in the oil and gas sector to be able to practice the skillset that is needed for offshore,” said General Manager of SBM Offshore (Guyana), Martin Cheong, in a recent video.

By Kemol King --- October 17, 2022 --- 0 --- Source --- OilNOW --- https://oilnow.gy/featured/alm...guyanas-2023-budget/

The Liza Destiny FPSO is producing oil offshore Guyana at the Liza Phase 1 Development located at the ExxonMobil-operated Stabroek Block.

Guyana’s updated Natural Resource Fund Act outlines a clear and simple formula for the calculation of withdrawals allowable from the Fund each year.

Based on this formula, using US$1.247 billion expected from oil in 2022, approximately US$998.5 million is projected to be available for withdrawal and spending in the new year. This would represent 80% of the Fund’s expected 2022 inflows. Consequently, US$248.5 million (20%) would remain in savings.

The expected earnings are constituted by US$1.1 billion in profit oil sales and US$147 million in royalties. This US$1.247 billion projected, according to the Ministry of Finance’s Half-Year report, is a revision that was produced after the evolution of world market prices due to the Russia-Ukraine war, up from US$957.6 million projected in the 2022 budget.

The withdrawal rule

The first schedule of the Natural Resource Fund Act outlines a formula called the withdrawal rule, which establishes a ceiling for withdrawals in any given year. The rule confines the withdrawal in any year to the Fund’s inflows from the previous year.

It was instituted after the previous rule was criticised for departing from good practice. As it exhibited a great degree of complexity, the Inter-American Development Bank (IDB) had said that the old formula was “among the most complex operational rules for a resource fund in the world… [and] departs from good practices.”

The new rule allows the withdrawal of 100% of the first US$500 million made in the prior year, 75% of the second US$500 million, 50% of the third, 25% of the fourth, 5% of the fifth, and 3% of any amounts in excess of US$2.5 billion. The International Monetary Fund (IMF) has recognised the updated law for promoting transparency and public understanding.

The Act allows one exception to the withdrawal rule, for the first year of the operation of the Fund, in which the entire balance of the Fund can be withdrawn. Pursuant to this, Guyana’s National Assembly approved the withdrawal of US$607.6 million in February to support the 2022 budget. The government opted to withdraw the funds in three tranches. The first two, amount to approximately US$400 million.

According to Guyana’s 2022 budget, which projects oil earnings and withdrawals from the Fund up to 2025, Guyana intends to spend about 60% of its total earnings.

The government has frowned on proposals to use oil earnings for major subsidies and cash transfers, opting instead for focused spending on capital projects to modernise the country’s physical infrastructure, improve critical social services, and facilitate economic diversification.

Crew onboard the Liza Destiny FPSO offshore Guyana prepare for an approaching oil tanker.

Guyana’s Central Bank disclosed on Monday that 65% of the US$607 million that was approved by the National Assembly to support the 2022 budget was transferred to the Consolidated Fund. The remainder – some US$207 million – is expected to be withdrawn in the final quarter.

The first withdrawal of US$200 million occurred in the second quarter. This amount represents 32.91% of the budgeted GY$126.69 billion (US$607.65 million). For the third quarter of 2022, Central Bank said the second tranche, GY$41.7 billion (US$200 million), was withdrawn – another 32.91%.

Hence, a total of GY$83.4 billion (US$400 million) has been transferred from the Fund, thereby amounting to 65.83% of the budgeted outflows for the year.

As regards the market value of the Fund at September 30, 2022, Central Bank said this stood at GY$219.17 billion (US$1.05 billion), an increase of 39.56% (GY$62.12 billion/US$297.96 million) from the previous quarter.

Furthermore, the operational manager said the Fund recorded a profit of GY$995.75 million (US$4.78 million) in the third quarter solely due to interest earned on deposits. This resulted in a return of 0.513% for the quarter compared with 0.177% in the previous quarter. The Fund also earned an annualised return of 0.275% since its inception.

During this quarter as well, Guyana received revenue for four lifts of 1-million-barrel (approximate) oil cargoes as its share of profit oil, taking the number received for 2022 to seven.

It is expected that revenue from an additional six oil cargoes will be obtained this year resulting in an annual total of thirteen.

As of September 30, 2022, Guyana received revenue for sixteen one-million-barrel lifts since the inception of the Fund.

Based on the formula used to calculate the ceiling on annual withdrawals from the Fund, almost US$1 billion could be available for support to the country’s 2023 budget.

How is this going to help with the price for Chicken?

The Waterfall paper seh: Chicken price now outside de reach ah de poor. Is now more dan $400 per lb pluck weight

Commander of Region Six, Senior Superintendent Shivpersaud Bacchus last evening confirmed that four ranks including a police corporal were placed under close arrest after the carving up of a cow’s carcass, a piece of which was found in one of the GPF’s vehicles.

https://www.stabroeknews.com/2...-up-of-cows-carcass/

El Dorado Offshore (EDO), a subsidiary of Ramps Logistics Guyana Inc, proudly informed industry stakeholders in a press release that it has created more than 400 job opportunities for citizens.

The affiliate company sees this as a noteworthy feat considering that it started out with a mere five employees after setting up shop at its Georgetown office in 2017. The announcement by the firm comes just a few days before its parent company goes head-to-head with regulators in a judicial review over the denial of a Local Content Certificate.

‘TT companies will move to Suriname if Ramps doesn’t get local content certificate’ – Trini business strategist | OilNOW

The certificate was not awarded by the Local Content Secretariat since information submitted by Ramps on the share structure and beneficial ownership did not conform to the letter of the law. Ramps approached the judiciary to pronounce on the matter. A hearing is scheduled for October 20, 2022.

EDO was keen to note that it has cemented its place as one of the biggest recruitment companies in the Caribbean’s energy sector. Because of these investments in the certification of Guyanese, Sherry Ferrell, Head of EDO Guyana said locals hold positions as Health and Safety Officers, General Managers, Senior Engineers, Roustabouts, Floorman, and Head Cooks.

City Chamber says ‘rent-a-citizen’ tactics run counter to local content law | OilNOW

Ferrel also noted that applicants have obtained certificates in Helicopter Underwater Escape Training (HUET), Basic Offshore Safety Induction & Emergency Training (BOSIET) with Compressed Air Emergency Breathing Systems (CA EBS) in Trinidad, Houston, and Brazil.

It was also noted that EDO successfully held job camps country-wide which allowed for over 400 skilled jobseekers to be added to its database.

With the foregoing in mind, EDO said it will continue to push its employees to meet the boundaries of excellence while creating opportunities for new talent.

Spokeswoman for Guyana’s Local Content Secretariat, Mikaila Prince, told OilNOW that Ramps’ application for a Local Content Certificate is still under review.

Dr. Mohamed Irfaan Ali, President of Guyana.

President of Guyana Dr. Mohamed Irfaan Ali said Tuesday that some of the country’s offshore oil blocks have been set aside for state partnerships.

“We’re going to move to the auctioning of some blocks, and we have some blocks that are set aside for what is termed government-to-government partnership. And we’re looking at all our strategic partners with these blocks,” Ali said.

The President made the comment during a joint press conference with the British High Commissioner to Guyana, Jane Miller.

Guyana’s first oil block auction: What to expect | OilNOW

He said that bilateral partnerships of similar nature were discussed with former United Kingdom Prime Minister, Boris Johnson when he went to the UK. But the President did not explicitly say whether the United Kingdom is one such government which will engage Guyana in a partnership for an oil block. However, Ali said he told Johnson that Guyana would like the UK to partner with it to promote its energy security.

With this undisclosed number of blocks set aside for state partnerships, the blocks which remain will be subjected to the auction.

Ali did not elaborate on the nature of the government-to-government partnerships, only adding that Barbados embarked on such an initiative. In time, the President said, he will disclose the role of each partner.

Guyana says new offshore model contract being finalised; auction imminent | OilNOW

As for the auction, the government has not disclosed the date of its commencement. Earlier this month, the Ministry of Natural Resources said it is working to finalise the model contract which will apply to the licenses which will be issued.

Participants at a meeting held on October 18, 2022, in Georgetown, to discuss catering services for the oil and gas sector.

Guyana’s government is working to see major local caterers tap into the multi-million-dollar catering industry for the nation’s petroleum sector.

To achieve this, the Minister of Natural Resources Vickram Bharrat; Director of the Local Content Secretariat Martin Pertab and other key ministerial and government officers met with over 100 Guyanese-owned catering services to discuss how a consortium can be formed to bid and supply food to the two offshore floating, production, storage and offloading (FPSO) vessels.

Both vessels – the Liza Destiny and Liza Unity – are operating in the prolific Stabroek Block.

Mr. Bharrat explained that the government wants more than just a few businesses to benefit from the country’s petroleum sector. He said it is in seeking to ensure that all get “a piece of the pie” that the Ali-led administration has moved to have this consortium set up.

Local content doesn’t mean automatic benefits, Guyanese must become competitive, says economic specialist | OilNOW

“If we pool our resources – finances and expertise – we can tackle this. We have to come together and compete with external companies and not against each other. In numbers, you have the strength and be assured that you have the support of the government,” the Natural Resources Minister told the room of major Guyanese caterers.

He noted that the government, through the Guyana Office for Investment (GO-Invest), will be extending waivers on duties and taxes for machinery and equipment needed to operationalise the work of the consortium. Major hotel investors will also benefit from this tax waiver.

The meeting comes on the heels of a directive from President Dr. Mohamed Irfaan Ali just days ago, in which he called for this consortium to be formed.

Guyana’s Local Content law intelligently crafted for win-win scenarios – Economist | OilNOW

“These are services that are externalised because we have to learn to work together. We cannot operate in a mega economy if we don’t bring together consortiums. We bring ten small people together, we have a medium company, we bring ten medium people together, we get a large size company. So, we are going to use this mechanism, this network to bring this country together, as part of the ‘One Guyana’ umbrella,” the President explained on October 16.

The Ministry of Natural Resources will meet again with the interested caterers to identify the operational model which this consortium will adopt. Participants will also be privy to presentations prepared by the Local Content Secretariat and other key personnel from within the Natural Resources Ministry.

The first schedule of Guyana’s Local Content Act carves out 40 sectors and sub-sectors for Guyanese businesses. Contractors, sub-contractors and licensees operating in Guyana are required to source 90% of their catering services from Guyanese. They are also required to source 75% of their food supply from Guyanese.

Western Logistics Guyana Operations Manager, Pradeep Ramoutar (right) with Guyana’s Minister of Natural Resources, Vickram Bharrat

With its five-year Local Content Master Plan approved by the Ministry of Natural Resources, Western Logistics Guyana aims to expand its human resource capacity by some 1,000 Guyanese.

According to its Operations Director, Pradeep Ramoutar, the locally owned and operated logistics firm is looking to hire at least 200 Guyanese to work offshore every year, for five years.

Western was the first logistics company to receive its approval.

“We wanna hire as much Guyanese as possible to maintain capacity for our clients and we are very close to achieving that target,” he shared with OilNOW. “We did not put too high a target – we put something conservative because we know we can achieve it. With the new floating, production, storage and offloading (FPSOs) vessels coming, there will be in an influx of supply vessels that require more manpower.”

The company has been operating in Guyana since 2017. Western’s service offerings include ground transport, immigration/work permit services, custom brokerage, chandlery services for ships and rigs, warehousing, procurement, and even medical services.

Guyanese logistics company thriving in oil sector, expanding local supply chain | OilNOW

Ramoutar noted that the company received its Local Content Certification back in June but now, with its Master Plan approved, it will be able to build on its stellar record. While Western supports major Tier One and Tier Two Contractors, Ramoutar noted that it also supports close to 200 local enterprises.

“Our five-year plan is indicative of where we are going and [it shows] we are not going alone. We are taking other small and medium scale businesses that span from Region Two to Region Six,” he shared.

The company also works closely with its sister company – Pandora Energy; the approved five-year Master Plan also covers it as well.

Western’s big clients include the Belgian Jan De Nul – a major partner in the massive Vreed-en-Hoop Shore Base being constructed on the West Bank of Demerara. The company currently has eight vessels in the country conducting dredging activities in the Demerara River for the project.

Dr. Mahender Sharma CEO of the Guyana Energy Agency

By the end of this year, the Guyana Energy Agency (GEA) is expected to complete installations, adding up to 757 kilowatts (kW) of solar capacity in hinterland communities.

The project forms part of the government’s aggressive push to expand renewable energy and reliable electricity throughout the length and breadth of Guyana. According to GEA’s Chief Executive Officer (CEO), Dr. Mahender Sharma, the agency has already installed nine mini solar grids in the hinterland since 2020.

75 women to be trained as solar panel technicians for major installation programme – Hamilton | OilNOW

Areas in which these projects have been completed are Yarakita and Hotoquai (Region One), Akawini, Bethany and Kabakaburi (Region Two), Chinoweg and Phillipai (Region Seven), Monkey Mountain (Region Eight) and Achiwab (Region Nine).

This all amounts to 156 kW of installed solar power capacity.

By the end of 2022, 19 additional mini-grids that total 601 kW are expected to be completed in Baramita, Canal Bank, Haimacabra, Kwebana, Karaburi and Sebai (Region One), Wakapoa, St. Monica, Capoey and Tapakuma (Region Two), Waramadong, Jawalla and Paruima (Region Seven).

Other areas that will be serviced include Kurukabaru (Region Eight), Karasabai, Aishalton, Kraudarnau and Annai (Region Nine) and Riversview (Region 10). Once installed, this means that a total of 28 mini solar grid systems would have been completed since 2020.

Last week, during a contract signing for the construction of a GY$362.4 million, 686 kW solar farm in Mahdia, Region Eight, Sharma had noted the impact these projects have, not only on providing reliable energy, but also saving money that would otherwise have gone to purchasing heavy fuel oil (HFO).

The project at Mahdia follows a 0.4 MW mini solar project at Mabaruma and a 1 MW project at Lethem. The latter was commissioned in August of 2022 and has so far displaced 70,000 litres of fuel (close to 450 drums of diesel).

Sharma noted that this is all part of the plan to expand the use of renewable energy.

The solar farm project in Mahdia is being funded by the Inter-American Development Bank (IDB), through its Energy Matrix Diversification and Strengthening of the Department of Energy (EMISDE) programme and was awarded to contractor Standby Power Engineering Company (SPECOM).

Participants at a meeting in Georgetown, Guyana, held on October 20, 2022, to discuss catering services.

SBM Offshore recently met with several local catering companies on its procurement process, current contract opportunities and related requirements. According to a post on its Facebook page, the company said this session, at the invitation of the Local Content Secretariat, followed the recent publication of a Request for Information (RFI) for catering services in Guyana.

Following the publication of the RFI, the government had decided to work towards bringing together a consortium of Guyanese caterers that can potentially bid for the opportunity to provide these services.

During the meeting, SBM Offshore’s Procurement Lead, Recardo Bovell, outlined the company’s procurement process and provided an overview of the standards and benchmarks to be met by local suppliers. These included certification and accreditation requirements, quality control measures, requirements needed for food preparation, Health, Safety, Security and Environment (HSSE) standards to be upheld, logistics, and the relevant personnel needed to function in various positions to provide efficient services.

SBM Offshore’s Procurement Lead, Recardo Bovell and Supply Chain Support Manager, Flavia Werneck, during the meeting with caterers.

“Throughout the lifecycle of SBM Offshore’s operations in the country, we always embrace engagements with local suppliers and various initiatives in order to build capacity, knowing that the industry is very new to Guyana, and share information which will benefit our suppliers,” Bovell told participants at the meeting.

General Manager of SBM Offshore, Martin Cheong, said this meeting is one of several that the company has recently participated in with local suppliers. These include the annual Vendor Day, participation in the Centre for Local Business Development’s Supplier Forum, as well as Community Business Talks with local companies that were also facilitated by the Centre.

Martin Cheong

“SBM Offshore remains committed to supporting the development of local capacity. We will continue to engage local companies on opportunities and look forward to working with all stakeholders,” Cheong said. He reminded that SBM Offshore will also be participating in the upcoming Supplier Forum on November 8-9 where it will engage with local suppliers on future procurement opportunities.

SBM Offshore was the first major contractor to receive approval for its Local Content Master Plan, following the establishment of Local Content legislation in December.

By Shikema Dey --- October 27, 2022 --- 0 --- Source --- OilNOW --- https://oilnow.gy/featured/wit...abroek-co-venturers/

An oil rig worker onboard the Noble Bob Douglas drill ship at the ExxonMobil-operated Stabroek Block offshore Guyana. (Photo credits - The Guardian)

With two new discoveries announced on Wednesday, 2022 is being referred to as the best exploration year in Guyana for the ExxonMobil-led co-venturers. Exxon has a 45% stake in the 6.6 million acres Stabroek Block, with Hess Corporation holding 30% and CNOOC 25%.

Timothy Chisholm

Timothy Chisholm, Hess’ Vice President – Exploration and Production for Guyana – Suriname, alluded to this on Wednesday during the company’s third quarter earnings report.

“…In total nine discoveries this year alone marking this the best exploration year we have had in Guyana. What a great year for the people of Guyana,” he said.

The latest discoveries were at the Sailfin-1 and Yarrow-1 wells, bring the total discoveries made so far to 35.

Guyana’s resource estimate remains at approximately 11 billion oil-equivalent barrels but with an aggressive drill campaign planned by Exxon, this number could quickly increase.

The Stabroek Block co-venturers kicked off the year with the Lau Lau-1 discovery in January and kept going from there with successful hits.

The partners made a total of two discoveries in January: another three in April, two in July and the latest ones this month.

Now, Exxon is focused on more drilling operations at the Fangtooth reservoir utilizing the Stena Carron rig.

The well site is situated approximately 100.8 nautical miles (186.6 kilometers) off the Guyana coast and covers an area of 0.29 square nautical miles (1 square kilometer).

(L-R) Minister of Natural Resources, Vickram Bharrat, hands over ExxonMobil Guyana’s approved Local Content Master Plan to President of the company, Alistair Routledge.

ExxonMobil is the latest in over 20 oil and gas companies operating in Guyana to have their five-year Local Content master plans approved by the regulator.

Exxon, Saipem Guyana Inc., and Gulf Engineering Services Guyana Limited got their approvals this week.

The plans detail how the companies will execute procurement and hiring in keeping with the government’s new Local Content Act.

Speaking on behalf of ExxonMobil Guyana, President Alistair Routledge commented, “The resource we are producing belongs to the people of Guyana and we are committed to ensuring that they benefit from it. Today’s event was another step in that direction since we believe that growing local content across the oil and gas sector can increase social and economic benefits for Guyanese in the short and long term.”

Just before the signing, ExxonMobil announced two more discoveries at the Sailfin-1 and Yarrow-1 wells in the Stabroek Block offshore Guyana, adding to its extensive portfolio of development opportunities.

Meanwhile, the Director of Gulf, Jodel Gopeesingh, stated that his company remains eager to foster and grow the capacity of Guyanese nationals for the oil and gas sector.

“We believe that optimising local content in our activities is one of the key elements to the success of the business and the operational goals of Gulf Engineering Services (Guyana) Inc. Our interest, at all times, has been to satisfy the needs and values of the Guyanese market, where we are able to add and create in the Guyanese economy by utilising the local human, natural resources and suppliers in the services we render to industry,” Gopeesingh explained.

11 companies had their plans approved last week. Prior to this, the first set of master plans were approved in September. Leading the pack was SBM Offshore.

Offshore supply ship HOS Brass Ring is one of several vessels supporting an Environmental Baseline and Geotechnical Survey operation at the ExxonMobil-operated Stabroek Block offshore Guyana. The vessel departed from Carenage, Trinidad and Tobago, last Wednesday and arrived in Guyana at the weekend.

The survey area is situated approximately 82.70 nautical miles (153.1 kilometers) offshore and covers an area of 1427.74 square nautical miles (4897.01 square kilometers).

Exxon awards multi-million-dollar contract to DOF Subsea for work in Stabroek Block

Exxon has made over 30 discoveries at the Stabroek Block since 2015, amounting to more than 11 billion barrels of oil equivalent resources.

The 6.6 million acres block has been hailed as one of the most unprecedented exploration blocks of all time by Norway-based Rystad Energy.

The Liza Unity FPSO, the second oil production vessel to be built by SBM Offshore for ExxonMobil's operations in Guyana.

Stacked against each other, international investors will tell you that they favour Guyana’s oil prospects over Suriname’s, and even those of legacy producer, Trinidad and Tobago, says energy analyst, Arthur Deakin.

The Director for Americas Market Intelligence (AMI) Energy Practice made this statement as part of a comprehensive case he presented during a virtual seminar recently hosted by the Institute of Commonwealth Studies.

The event considered, among other key subjects, the comparative cases of Trinidad and Tobago, Suriname and Guyana, and the choices and limitations confronting these nations in fulfilling their public commitment to green transitions.

Deakin was specifically asked to address the outlook of the international private sector when considering the Caribbean Community (CARICOM) trio. The analyst categorically stated that Guyana is the top choice for investors for several reasons.

Looking at Trinidad and Tobago, he said the primary concerns for international actors are rooted in the nation’s declining production, sufficiency of replacement reserves to boost the petrochemical and manufacturing industries and the overall mortality of its productive cycle.

Arthur Deakin

“All the signs indicate that Trinidad’s decline is going to continue because new exploration activities are focused on smaller pools of gas and using existing infrastructure that’s already developed offshore Trinidad. The fields are quite mature. So, it doesn’t look like there’s going to be any major findings in the near future,” Deakin pointed out.

He said most of Trinidad’s expectations for sustainability rests with the Calypso field, a conventional gas development slated to start commercial production in 2028. It is operated by BHP and partners.

He added that Trinidad is also hedging its bets on partnerships with Venezuela. The downside here, he noted, is that such a move is dependent on the U.S lifting sanctions on the Spanish-speaking nation in exchange for free and fair elections there. In his eyes, it does not seem as though it will happen.

Even with commitments to renewables, he said Trinidad and Tobago is seeing lacklustre interest since the cost of electricity is heavily subsidised by the government. In light of this, Deakin made the case that there is no economic pull factor for switching, save and except for the climate goals companies would have to meet by 2050.

In the meantime, he said the more than 30 significant discoveries in Guyana’s Stabroek Block continue to take more of the attention away from its CARICOM sister. Deakin commended the Guyana government for putting strategies in place to ensure unprecedented growth in the years to come, as well as setting a conducive environment that attracts further investment in other sectors.

For Suriname, he said the Dutch speaking nation is about five years behind Guyana and one third of the scale, if that much. He said the concerns for investors really stem from the lack of a final investment decision (FID) on Block 58, the nation’s most advanced offshore concession.

He said the FID keeps getting postponed by TotalEnergies, the Block operator.

“First, the decision was going to come out in 2021, then it was postponed to 2022 and now it is 2023. The operator says it is waiting on more data and wants to do more seismic surveys to know what is actually in those blocks,” explained Deakin.

He said however that AMI’s sources on the ground related that TotalEnergies is not entirely sure how this block even fits into their long-term vision for its energy transition strategy. Without this FID, Deakin said all other investments would be delayed and therefore cast a worrying shadow on the exploratory future and interest therein for Suriname.

In the meantime, he said Guyana continues to climb the global totem pole with its high-quality, low-cost oil. He said there is no argument that Guyana is the preferred choice among the three.

The Liza Unity FPSO is pictured at the Stabroek Block where it is producing oil for ExxonMobil’s second development offshore Guyana.

For October 2022, Guyana’s Natural Resource Fund (NRF) account received almost GY$33 billion (US$155.943 million) in deposits. This was noted by the Central Bank in its monthly summary of the Fund’s financial position and performance.

Central Bank said royalties received for that period totalled GY$13,958,467,000 while profit oil was GY$18,555,781,000.

Coupled with the opening balance of GY$219,178,291, as well as GY$621,043,000 in interest income, the balance of the fund was GY$252,313,582,000 (US$1.2 billion) at October 31, 2022.

There were no withdrawals recorded for that month.

Almost US$1 billion in oil revenue could be plugged into Guyana’s 2023 budget | OilNOW

The purpose of Guyana’s NRF is to ensure there is prudent management of the nation’s oil earnings. The Fund is also intended to ensure Guyana’s natural resource wealth is used to finance national development priorities including any initiative aimed at realising an inclusive green economy.

US$400 million has been withdrawn so far, and just over US$200 million more is expected to be withdrawn before the year ends to support the government’s budget.

The revised Natural Resource Fund Act assigns the responsibility for the preparation of the investment mandate to the Board of Directors. To date, there has been no investment mandate for the Fund.

However, all necessary committees have been appointed.

The Guyana Revenue Authority (GRA) Camp Street, Georgetown Head Office

The Guyana Revenue Authority (GRA) is on the hunt for at least 36 specialists for its Petroleum Revenue Department. These experts would add to the 31 already on staff and boost the agency’s capability to conduct petroleum tax audits, data analysis, and effective monitoring aboard the nation’s floating production, storage and offloading (FPSO) vessels.

For the time being, the tax regulator is conducting rigorous training of staff for various audit functions throughout the authority to build a repository of necessary skill sets and competencies.

Exxon’s costs subject to scrutiny by partners, Guyana government and third parties | OilNOW

This is noted in the Guyana Auditor General’s report, a document prepared by office of Guyana’s chief auditor annually, of all public accounts.

According to Auditor General, Deodat Sharma’s 2021 report, GRA explained that multiple training sessions were held by the International Monetary Fund (IMF) to build capacity to administer domestic taxes within the oil and gas sector. The authority said this included training in statutory interpretations, taxation of subsidiaries and external companies in Guyana, identifying the taxpayer and taxable sources of income, risks to an understatement of chargeable income, and taxation of resident and non-resident companies.

Local consortium, foreign auditors team up to audit Exxon’s 2018-2020 costs | OilNOW

GRA is one of the key entities monitoring the nation’s crude production to ensure the fiscal integrity of the operations is not compromised.

In 2021, the country’s crude oil production increased by 56.9% to 42.7 million barrels, when compared with 27.2 million barrels in 2020, averaging production of approximately 117,000 barrels per day. GRA was central to monitoring this production onboard the Liza Destiny FPSO.

As a result of the increased output, real oil GDP grew by 19.9% in 2021.

Head of Guyana’s Local Content Secretariat, Dr. Martin Pertab shared during the opening ceremony of the Guyana Supplier Forum 2022, that the oil and gas sector has exceeded targets set for the training and hiring of Guyanese nationals to take up opportunities.

At June, contractors and sub-contractors operating in Guyana’s oil and gas industry expended US$3.3 million on training locals by June; well surpassing the US$1.8 million initially pledged.

Dr. Pertab explained that the Secretariat, since coming into being, has placed emphasis on bridging the knowledge gap by working closely with contractors, sub-contractors and licensees to ensure Guyanese are given priority in the recruitment process.

Local Content Secretariat inviting stakeholders to report grievances | OilNOW

As a commitment had been made to expend around US$1.8 million on training, the amount surpassed is some 80%.

On the hiring side, he said based on initial estimates, over 800 new local hires were anticipated for Guyana’s oil industry.

However, as of June, preliminary estimation by the Secretariat shows a total of 1,125 new job opportunities were created so far. Of that number, Dr. Pertab said 858 were filled by Guyanese. This now means that a total of 3,689 Guyanese nationals have found gainful employment in the oil and gas sector.

Local Content Secretariat filtering all applications vigorously for schemers – Bharrat | OilNOW

He pointed out as well that almost 80% of the new hires were in technical roles.

All in all, Guyana not only achieved its annual target for new hires in just six months but exceeded it by 34.5%.

The Guyana Supplier Forum 2022 will be used by ExxonMobil and its Prime Contractors to tell more Guyanese nationals and companies about opportunities available to them, with a view of expanding local participation.

Day 2 of the Forum continues Wednesday at the Leonora Stadium (National Track and Field Facility).

The Liza Destiny FPSO - Guyana's first oil production vessel.

The Guyana government on Monday issued its third notification to the National Assembly of all revenues deposited into the Natural Resource Fund (NRF).

This notification was presented by Senior Finance Minister, Dr. Ashni Singh for the period July 1, 2022, to September 30, 2022, pursuant to Section 33 (2) of the NRF Act 2021. This notification was also published in the Official Gazette on October 17, 2022.

The statement tabled in the House noted that for July 20, 2022, Guyana received profit oil from the Liza Unity floating production, storage, and offloading (FPSO) vessel, totalling US$122.97 million or GY$25.64 billion.

For the period July 27, 2022, profit oil from the Liza Destiny stood at US$117.45 million or GY$24.49 billion.

In July as well, royalty payment for the second quarter production was US$51.06 billion or GY$10.65 billion.

In August 2022, Guyana only received profit oil for the Liza Unity which totalled US$102.54 million or GY$21.38 billion.

In terms of payments in September, profit oil from the Liza Destiny was US$99.16 million or GY$20.68 billion.

It therefore means that for the third quarter of 2022, oil earnings stood at approximately US$493.18 million or GY$102.83 billion. This represented the highest earnings for the fund in any quarter.

As of the end of September 2022, Dr. Singh said the Natural Resource Fund balance amounted to US$1 billion.

The Central Bank later reported that deposits into the Fund for October totalled US$155.94 million (GY$33 billion), resulting in a total balance of US$1.2 billion (GY$252.31 billion) at October 31, 2022.

One of the key amendments in the NRF Act 2021 was the strengthening of the governance architecture of the Fund. The Board of Directors and Public Accountability and Oversight Committee (PAOC) members were appointed in August 2022.

An SBM Offshore multi-purpose floater hull

Dutch floater specialist SBM Offshore has signed an MoU with ExxonMobil Guyana for construction of a multi-purpose floater hull for use on a future floating production storage and offloading (FPSO) project. SBM made the announcement today via its LinkedIn page.

“ExxonMobil and SBM Offshore have a long history of working together, with multiple FPSO projects underway,” the Netherlands-based company said.

SBM Offshore looking for more Guyanese to join its growing team

This long history of working together has seen SBM Offshore securing multiple contracts over the years for Exxon’s Guyana operations, which includes all FPSOs for approved projects to date – Liza Destiny, Liza Unity, Prosperity, and One Guyana.

SBM Offshore aiming for ‘near-zero emissions FPSO’ by 2025 – CEO

Just recently it was announced that MODEC had secured a contract for Exxon’s fifth Guyana project at Uaru, which is pending government approvals and final investment decision by the US oil major.

The MoU announced today by SBM Offshore is therefore likely targeting Exxon’s sixth project offshore the South American country.  Exxon has said it envisions around 10 FPSOs operating at the Stabroek Block where it has made over 30 discoveries since 2015, amounting to more than 11 billion barrels of oil equivalent resources.

To increase recognition for the invaluable service of world forests, Guyana has seized a golden opportunity to be one of the founding members of the Forest Climate and Leaders’ Partnership (FCLP) which was launched at COP27 in Sharm el Sheikh, Egypt on November 7, 2022.

Including Guyana and the United Kingdom, the FCLP now has 26 countries and the European Union – which together account for over 33% of the world’s forests and nearly 60% of Gross Domestic Product (GDP).

British Prime Minister, Rishi Sunak, led the launch while noting that for too long, the world’s forests have been undervalued and underestimated.

Sunak said, “They are one of the great wonders of our world… that is why the UK put nature at the heart of COP26 [in Glasgow in late 2021], and countries home to 90% of the world’s forests committed not just to halting but reversing forest loss and land degradation by 2030.”

Guyana’s Minister of Natural Resources, Vickram Bharrat, noted that the new oil-producing state is proud to be a founding member of the partnership.

In a subsequent bilateral meeting, Mr. Bharrat also discussed the FCLP with British Minister, Lord Zac Goldsmith, who spoke of how Guyana’s Low Carbon Development Strategy (LCDS) 2030 and Guyana’s experience on forest management provided models that could be invaluable for other countries. The ministers agreed to further discussions between the UK and Guyana, including on expanding trade for sustainable forest products. This is a matter that Minister Bharrat also emphasised in discussions with the President of the European Commission, Ursula von der Leyen.

President Irfaan Ali who was present virtually for the event stated that ambition to protect the world’s forests has never been in short supply in forest communities and countries. What has been missing is the means to realise that ambition, the Head of State asserted. He said the Forest and Climate Leaders’ Partnership can rapidly change this situation by bringing Heads of Government together to focus on practical solutions.

Mr. Ali said Guyana will play its part in highlighting leadership from forest communities and countries. He said too that Guyana will also put forward solutions that can work. The President said, “The world’s people do not need more talk, they need action that converts ambition into results, and I hope the FCLP will be a platform to do this.”

The FCLP is also complementary to the vision set out in Guyana’s Low Carbon Development Strategy (LCDS) 2030. That document outlines Guyana’s pathway for sustainable development of its oil resources while preserving its expansive and pristine forests.

Guyana’s deforestation rate is among the lowest in the world with over 99% of the country’s 18 million hectares of forest intact. This provides vital carbon and biodiversity services for the world. It also allows Guyana the legroom needed for the full development of its oil resources which total over 11 billion barrels of oil equivalent.

Guyana is also aiming to continue to evolve its model for payment for forest climate services by accessing financing from voluntary carbon markets.

A Guyana-bound FPSO while under construction by SBM Offshore, in Singapore.

Construction of the 3^rd and 4^th floating production storage and offloading (FPSO) vessels for ExxonMobil’s operations in Guyana – Prosperity and ONE GUYANA – is progressing well, according to SBM Offshore, the company building the vessels.

For ONE GUYANA, SBM Offshore said topsides construction started in the yards in China and Singapore and is on schedule as planned. ONE GUYANA builds on the experience to date of the Liza Destiny, Liza Unity and Prosperity vessels. Liza Destiny and Liza Unity are the first two FPSOs to be built and operated by SBM Offshore for Exxon’s Guyana operations. The floaters are currently producing oil offshore the South American country.

SBM Offshore said the ONE GUYANA design is based on its Fast4Ward programme that incorporates the company’s new build, multi-purpose hull combined with several standardised topsides modules.

The FPSO will be designed to produce about 250,000 barrels of oil per day (bopd), will have associated gas treatment capacity of 450 million cubic feet per day (MMcf/d) and water-injection capacity of 300,000 bpd. First oil is expected in 2025.

US$10 billion Yellowtail development will be largest investment in Guyana’s history | OilNOW

As for Prosperity, SBM Offshore said integration and commissioning activities are underway. The vessel will be designed to produce 220,000 bopd and will have an associated gas treatment capacity of 400 million cubic feet per day and a water injection capacity of 250,000 bpd. The FPSO will also be spread moored in water depth of about 1,900 metres and will be able to store around 2 million barrels of crude oil. First oil is targeted for 2023.

Modec was recently awarded a contract to perform front-end engineering and design (FEED) for Uaru, the fifth project.

File photo of an oil spill response drill activity.

Guyana’s Auditor General, Deodat Sharma, has found that the oil-producing country has adequate mechanisms in place to receive support from other countries should there be an unmitigated spill.

Sharma made this commentary in a report following his performance audit of Guyana’s Preparedness for Marine Oil Spill Response. The focus of his evaluation was the National Oil Spill Contingency Plan.

Sharma said Guyana and Trinidad and Tobago had signed an agreement on September 19, 2018, for the development of the energy and energy-related sectors. The agreement caters for cooperation between the two countries in the development of policies, plans and protocols relating to health, safety, and the environment.

In addition, Sharma said Guyana is a member of the Caribbean Disaster Emergency Management Agency (CDEMA), which is a regional inter-governmental agency for disaster management in the Caribbean Community.

Recently, the former Head of Guyana’s Civil Defence Commission (CDC), Kester Craig, was appointed Deputy Executive Director of CDEMA.

Under the CDEMA framework, Guyana can receive external response support from the other eighteen Participating States (PSs), and national, regional and international disaster stakeholders.

Support that can be provided includes technical assistance, specialised equipment, support personnel and information sharing. Also, Sharma said he has taken note of the fact that personnel from key agencies in Guyana participated in oil spill response exercises with neighbouring countries over the past few years.

He said government has also taken the necessary steps to receive assistance from countries in preparing for and responding to oil spill incidents.

It was also noted in the AG’s report that the CDC now has a complete list of resources held by various organisations and agencies across Guyana. The lists include equipment held locally, regionally, and internationally by CGX Energy and ExxonMobil, all of which can be mobilised when needed.

OilNOW also understands that there is a Mutual Aid Agreement between operators that will see them sharing and leveraging their resources in a combined effort, if needed.

To build on these efforts, the Audit Office has recommended that the government makes the necessary arrangements to review the legal and regulatory framework to identify gaps and ensure alignment of the plan with international agreements and best practices.

Oil spill simulated during response exercise in new petroleum hotspot | OilNOW

Sharma was keen to note that national laws and regulations are an essential component of creating and supporting an effective National Preparedness and Response System. He said the requisite laws must be in place to establish the overall requirements for oil spill preparedness and response capability, and for assigning responsibilities.

Accordingly, Sharma said specific regulations, some of which were drafted five years ago, need to be updated, finalised, and implemented as soon as possible.

The Auditor General highlighted for example that one area of weakness is that there are no specific regulations or test procedures for the approval of dispersants (chemicals). The Environmental Protection Agency Act, he said, provides a broad mandate regarding the prevention and control of pollution. However, it does not specifically cover offshore petroleum activities. He said this must be corrected forthwith.

Sharma was also keen to warn that the failure to complete the review of the legal and regulatory framework will see some laws, and the national plan by extension, remaining deficient and not aligned with industry best practices.

By Kemol King --- November 21, 2022 --- 0 --- Source --- https://oilnow.gy/featured/guy...racked-by-shortages/

An oil tanker approaches the Liza Destiny FPSO offshore Guyana.

The radical re-organisation of energy markets continues to pose a challenging task, nine months after Russia first invaded Ukraine. At a time when these markets are wallowing in thirst for crude barrels from friendly producers, Guyana’s quickly growing global supply is a welcome boon.

For the last three months, ExxonMobil’s Liza projects in the offshore Stabroek Block have produced nearly 34 million barrels of medium to light, sweet crude. Average daily production over the period was 368,000 barrels of oil per day (bpd).

This is according to oil production data for the period August 1 to October 31, 2022, from the Petroleum Management Programme, Guyana’s transparency portal officially established to make petroleum data accessible to all.

In August, average production was 364,820 bpd, totaling 11.309 million barrels.

In September, average production was 366,310 bpd, totaling 10.989 million barrels.

In October, average production was 372,910 bpd, totaling 11.56 million barrels.

Combined, the projects produced and exported 33.859 million bpd of crude.

After being optimised earlier this year, production capacity at Liza Phase 1 jumped from 120,000 bpd to 140,000 bpd. The Liza Destiny floating production, storage, and offloading (FPSO) unit has exceeded even its optimised capacity, peaking at 153,780 bpd in August and averaging 148,960 bpd in the three-month period. It produced a total of 13.704 million bpd in the period.

The Liza Phase 2 project, which came on stream in February, tripled Guyana’s overall production capacity. The project peaked at 240,860 bpd in September and averaged 219,070 bpd in the three-month period, just under design capacity of 220,000 bpd. Drawing from this massive reservoir, the Liza Unity FPSO produced a total 20.154 million bpd from August to October.

When it was the lone project in operation, Liza Phase 1 had produced 42.7 million barrels for the year 2021. With the introduction of Liza Phase 2 this year, the government had noted that the two projects produced 34.6 million barrels in the first half year alone. With both projects now at full capacity, producing more 10 million barrels every month, Guyana’s oil exports in 2022 are expected to grow by more than 100% over the prior year.

Stabroek is the only block offshore Guyana, so far, in which oil has been discovered in commercial quantities and, resultantly, is the only producing acreage. ExxonMobil has a 45% operating interest in the block, while Hess and CNOOC hold 30% and 25% stakes respectively.

The partners plan to have seven FPSOs operating offshore Guyana by 2027, with oil production capacity of 1.2 million bpd. But even before then, by 2025, Guyana will be the world’s largest per capita producer of oil.

Exploration drilling results for the Guyana-Suriname basin support the presence of extensive and deeper plays. This much is evident to Westmount Energy, a UK-based investment firm with exposure in several blocks in the basin.

Westmount said one only ought to pay attention to the deeper Santonian pools in Suriname’s Block 58; the deeper hydrocarbons reported at Liza-3, Tripletail-1, Yellowtail-2, Uaru-2, Turbot-2, Longtail-3, Hassa-1 and Fangtooth-1 on the Stabroek Block; together with the hydrocarbon shows reported at Sapote-1 on the Canje Block.

The UK firm said too that the logged net pay in the Santonian-Coniacian intervals at Kawa-1 on the Corentyne Block, all suggest that there is a deeper play waiting to be unlocked.

Westmount further said oil pay has recently been reported from the Zanderij-1 well in Suriname’s Block 42 where the operator, Shell, was targeting the Santonian and deeper intervals, with well results currently under evaluation.

Westmount said additional deep drilling with multiple targets is scheduled from the fourth quarter 2022 at Wei-1 in Guyana’s Corentyne Block which is operated by Canadian exploration duo, Frontera Energy Corporation and CGX, and at Awari-1 in Block 58 which is operated by TotalEnergies. The Stabroek Block will also see deeper tests at Fangtooth SE-1, Fish-1 and Lancetfish-1.

It is against this backdrop that Westmount said it remains excited about the future of the Guyana- Suriname basin.

Westmount currently has investments in four companies, namely Cataleya Energy Corporation, JHI Associates Inc., Eco (Atlantic) Oil and Gas Ltd., Ratio Petroleum Energy Limited, which have participating interests in three Guyana blocks: Canje, Kaieteur and Orinduik Blocks. These are immediately adjacent to the ExxonMobil-operated Stabroek Block. These three blocks, in combination with Block 47 (through Ratio) offshore Suriname, are said to contain a substantial inventory of independent Cretaceous prospects.

The 96 women entrepreneurs who graduated from the Road to Growth and Road to Finance programmes.

The Road to Growth and Road to Finance programmes sponsored by the ExxonMobil Foundation in partnership with the Cherie Blair Foundation for Women through ActionINVEST Caribbean Inc., has churned out 96 new female graduates. The women are now equipped with the business and financial literacy skills to expand their entrepreneurial pursuits.

Major training, capacity building programmes launched for Guyanese women | OilNOW

Road to Growth is designed to build the business skills and financial literacy of women entrepreneurs and Road to Finance, developed in 2021, supports ambitious women to build their skills and confidence to successfully secure finance, grow their businesses and achieve their potential.

Dr. Mathias Terheggen, Chairman, Cherie Blair Foundation, expressed that the Foundation is “an act of partnership” using mobile technology for business acumen, supporting over 40 women at the Berbice Chamber of Commerce, New Amsterdam in the past week.

ExxonMobil Guyana has invested over GY$3 billion in youth, women development | OilNOW

Community Relations Manager of ExxonMobil Guyana, Suzanne De Abreu, noted the value ExxonMobil Foundation places on corporate social responsibility of women’s empowerment, and the strategic goal of deploying technological learning which supports women entrepreneurs directly, to financial independence.

Dr. Alana James, a participant of the Road to Finance, encouraged the women entrepreneurs to view their small business as a growing business, and to acknowledge the importance of numerical literacy in maintaining profitability. Similarly, Davitri Doerga, Chief Executive Officer of ActionINVEST, encouraged keen attention to evolving consumer taste, reinvestments in businesses, and participation in the upcoming Road to Leadership programme.

ExxonMobil empowering Guyanese women through global training programme | OilNOW

Meanwhile, Guyana’s Human Services Minister, Dr. Vindhya Persaud urged the new graduates to immerse themselves in the gratification of their success.

ExxonMobil Guyana President, Alistair Routledge

ExxonMobil Guyana President, Alistair Routledge, explained recently that Guyana’s place in the global energy arena carries immense significance. He made the comment as he announced that Exxon is once again a lead sponsor of the International Energy Conference and Expo (IECE) 2023.

“Energy is fundamental to human development… Guyana, as a new oil producer of global significance, is ideally positioned to demonstrate how we can meet society’s needs in a sustainable manner,” Routledge said. “Guyana is a thought leader on low carbon development with an ambitious strategy to secure growth and prosperity for the current and future generations.”

Guyana’s meteoric rise mirrors 20th century economic boom of Saudi Arabia, Venezuela – historian | OilNOW

These credentials, Routledge explained, place Guyana in the driver’s seat on energy issues regionally, and perhaps even globally. He sees IECE 2023 is an ideal platform to engage in debate and learn.

“ExxonMobil Guyana is proud to be associated with this event and is excited to be part of the transformational journey taking place here in Guyana,” he added.

Scheduled for February 14-17 in the new year, the conference is being held under the theme ‘Harnessing Energy for Development’.

Routledge noted that the theme aligns with the company’s commitment to sustainably produce energy and products to meet society’s needs in a manner that protects people, the environment, and the communities in which the company operates.

Minister of Natural Resources in Guyana, Vickram Bharrat, also endorsed the conference as another opportunity for the country to showcase what it can offer the world.

Guyana delivering over 10 million barrels of oil per month to world market racked by shortages | OilNOW

“Guyana of course is one of the newest oil producing countries in the Latin America and the Caribbean region, and we have been moving at an unprecedented rate in developing our oil and gas sector… At the same time, we have been incentivising and working towards developing the traditional non-oil sector[s],” Bharrat explained.

He said the conference will not only be about Guyana as an oil producing country but one with investment opportunities across a variety of sectors.

IECE was renewed for a second edition early last year, after a successful launch. It had been attended by ExxonMobil Corporation Chair and CEO, Darren Woods, and several heads of States, representing Guyana, Ghana, Suriname and Barbados.

The organisers announced in October that Kurt Baboolall was appointed Chief Executive Officer of International Energy Conference and Expo Guyana (IECEG).

Dr. Ashni Singh, Guyana's Minister of Finance

In an effort to set the stage for a diversified economy with competitive industries, Guyana’s Senior Finance Minister, Dr. Ashni Singh, said the government will use a portion of the oil wealth to uproot historic impediments to broad-based economic growth.

Specifically, the official said the administration is simultaneously working to address infrastructural weaknesses as well as high electricity costs. These factors, once improved, would ensure Guyana can have competitive agriculture and manufacturing sectors.

The official provided the foregoing as part of a comprehensive overview of the government’s master plan to keep the resource curse at bay. This was during a recent interview on Caribnews Update’s programme called The Narrative where he was interviewed by news anchor, Calistra Farrier.

With 11 billion barrels of oil-equivalent resources in the Stabroek Block, Dr. Singh said Guyana’s oil sector is generating rapid economic growth and opportunities. He said observers must note however that the full impact of the oil revenues will come later.

Dr. Singh said, “We are right now producing probably about 350,000 barrels of oil a day but that’s going to ramp up over the medium term. It’s going to ramp up to about a million barrels a day of oil production within the decade and once we get to that point, the resource flows are going to be far more significant than they are right now.”

Taking that future growth into consideration, he said current earnings which total more than US$1.2 billion, are still relatively modest, especially when one considers the gamut of the country’s development needs.

The senior official said the country is still grappling with significant infrastructural needs, such as connectivity via key roads and bridges, particularly for the hinterland communities. He said too that access to continental neighbours like Brazil and Suriname is still a challenge.

“We don’t have a bridge across the river to Suriname. We don’t have an all-weather road to Brazil, and that, of course, you know, some of those infrastructural impediments still weigh very heavily on Guyana’s ability to realise its economic potential,” expressed the minister.

He said the commencement of oil production has presented the administration with an opportunity to remove historic impediments to Guyana’s competitiveness. He said such improvements could no doubt catapult Guyana to being a key trading hub for the region.

Along with the infrastructure networks being strengthened, the economist said the government is intent on addressing electricity costs which have stymied development for ages. Its main project to unlock growth across all sectors, in this regard, is the Gas-to-Energy project.

He said, “It’s (high electricity costs) been a constraint to the emergence of a manufacturing sector. It’s been the main reason why we have remained a producer of primary commodities and not value-added products. We want to address this, and we are by investing very heavily in energy generation, which will lay the foundation for a more competitive manufacturing sector.”

Dr. Singh said this approach demonstrates that the government is thinking about a post-oil world. Guyana will be ready when that time comes, he concluded.

By Kemol King --- December 1, 2022 --- 0 --- Source --- OilNOW --- https://oilnow.gy/featured/no-...linquishment-jagdeo/

Vice President of Guyana, Dr. Bharrat Jagdeo

Delays and infractions by oil companies in fulfilling their commitments to the Guyana government can cost the country dearly. Vice President Dr. Bharrat Jagdeo has said that if companies sit on a block for three years without doing the work, Guyana loses three years of potential development. As such, the new model Production Sharing Agreement (PSA), to be rolled out for Guyana’s first offshore competitive auction, will feature new safeguards.

These new terms are informed by Guyana’s experience with some companies, like CGX Energy. Discussing this company’s most recent delay involving its Corentyne Block work programme, the Vice President said in November that the new PSA terms are purposed to prevent such issues.

Of the 14 blocks to be put up for auction, 11 will be situated in the shallow water, and three in the ultra-deepwater acreage called Area C. Shallow water blocks will be awarded for a period of five years, and deepwater blocks for 10 years. All contractors will hold the blocks for three years initially, during which they are expected to conduct seismic tests and relinquish 50% of the acreage at the end of the period. The remaining two years for shallow water blocks will be split into two one-year exploration periods, and the remaining seven years for deepwater blocks will also be allotted for exploration. He did not indicate what the split would be.

Each bidder will be required to put up a work programme, with the criteria for the bid to be weighted between the work programme and the signature bonus. Companies will have to guarantee that they will meet the work programme, as the government intends to institute a penalty commensurate with the unmet commitments.

Dr. Jagdeo said, for example, that if a company commits US$30 million to a period of the license and fails to follow through, that money becomes the penalty. He said, “This is to prevent people taking a block and sitting on it for three years, and then at the end of the three years, you hear ‘We can’t do anything. We need to relinquish it.’”

The VP said the safeguard would help, and that the government has been assured by its principal consultant, IHS Markit, that such a provision is not inconsistent with industry practice.

CGX had been awarded three oil blocks by the Guyana government in the 2012-2013 period – Corentyne, Demerara and Berbice. The company failed to meet its commitments even after several extensions by the government.

It is “none of our business” if the company “can’t raise the money,” Dr. Jagdeo had said. Eventually, CGX, its subsidiary ON Energy, and partner Frontera Energy, came to an agreement with the government to relinquish the Demerara and Berbice blocks.

Dr. Jagdeo had told reporters, early November, that he knows CGX is not making its commitment, in relation to its last held block, Corentyne. He had said the government may have to have a “serious discussion” with the co-venturers. This was shortly after CGX announced that the Noble Discoverer is stalled in Trinidad, in use by Shell, and would not make its expected October arrival in Guyana. CGX later revealed that the licensed deadline for the drilling of the Wei-1 well (November 27) had passed, and that the government agreed to extend this deadline to January 31, 2023.

CGX has also been entrusted with the construction of a deepwater port in Berbice, a highly anticipated development expected to inject new life into the county’s economy. The company announced several months ago that there were “certain delays” that made the fourth quarter of 2022 an unrealistic timeline for completion of the offshore supply base of the port. Both the President, Dr. Mohamed Irfaan Ali, and the Minister of Natural Resources, Vickram Bharrat, publicly expressed discontent with the company’s pace. The port is expected to be completed in the new year. CGX’s most recent release indicated that in-river construction activity had started on an access trestle, as well as dredging of the Berbice river. Construction of a wharf, perpendicular to the trestle, will follow.

It's all more bark but no bite.

Guyana's women leaders in government - Minister of Human Services and Social Security, Dr. Vindhya Persaud (top-left); Minister of Amerindian Affairs, Pauline Sukhai (top-middle); Minister of Parliamentary Affairs and Governance, Gail Teixeira (top-right); Minister of Public Affairs, Sonia Parag (bottom-left); Minister within the Ministry of Housing and Water, Susan Rodrigues (bottom-middle); Minister of Education, Priya Manickchand (right-middle); Minister of Tourism, Industry and Commerce, Oneidge Walrond

Crowned “the fastest growing economy in the world”, on account of its spectacular Stabroek block discoveries, the Guyana government shoulders the responsibility of ensuring the growth is converted into development.

It must, at the very least, strengthen its human and institutional capacities. This is considered the cornerstone of good governance for extractive wealth of such magnitude. It must also use a portion of those revenues sustainably and transparently to transform the lives of its people.

Indeed, the entire spectrum of ministers, and their supporting team, inclusive of foreign experts, will be integral to the state’s fulfilment of those duties. However, the women of government hold strategic posts that if properly utilised, could truly serve as a model for other states to follow.

Specifically, the nation’s Education Minister, Priya Manickchand, as well as its Minister of Human Services and Social Security, Dr. Vindhya Persaud, arguably lead two of the most critical portfolios. Both have been ardent champions of societal progression with several accomplishments under their belt since assuming office in 2020.

In 2021, the Ministry of Education launched the new Education Strategic Plan for the period 2021 to 2025. This presented the 2030 Vision for the sector, aimed at providing opportunities for equitable access to quality education and lifelong learning for all. The plan states that it is the government’s intention to reform the curriculum, expand teacher training, construct new schools, and establish robust systems to educate each generation. Consistent with this vision, GY$74.4 billion was budgeted for this sector in 2022 – the fiscal year that incorporated the first withdrawal from the Natural Resource Fund.

According to the 2022 Mid-Year Report, the Education Ministry dedicated GY$6.6 billion to improving infrastructure for facilities. During the review period, 1,151 teachers were trained on the use of the renewed curriculum at the primary level, which aims to promote greater inclusivity by considering the unique qualities and varied abilities of each child.

The ministry has also provided financial support to families of school children in the form of the Because We Care cash grant. It was increased from GY$15,000 to GY$25,000, and the school uniform supplies grant from GY$4,000 to GY$5,000 in 2022.

The ministry has also used GY$1.3 billion to provide an additional 4,500 online scholarships under the Guyana Online Academy Learning (GOAL) programme. Additionally, A Get Ready for Opportunity to Work (GROW) project was launched to distribute 4,000 scholarships to persons who did not complete their secondary education.

Similarly, the Ministry of Human Services and Social Security has recorded several notable achievements. It has been able to train more than 500 persons to care for the elderly.

At mid-year, it was noted by the Finance Ministry that the implementation of the ministry’s initiatives for women’s and men’s empowerment gained momentum with the development of employable skills. Towards this end, 1,277 persons graduated with a skill in the first half of 2022 through the Women’s Innovation and Investment Network (WIIN) Business Clinic and the Board of Industrial Training (BIT), of which 980 were women and 297 were men. These courses included Child Care, Care for the Elderly, Garment Construction, Home Management and Patient Care Level 2. Another 5,657 applications have been processed for the skills training scheduled to commence in the second half.

In May, President Dr. Mohamed Irfaan Ali demonstrated his support for vulnerable groups as he announced a cash grant of GY$100,000 for each child with a disability. This undoubtedly progressed the implementation of interventions for the empowerment of persons with disabilities.

Additionally, the government has pushed through with the establishment of a first-class national classroom for autistic children. These are but a few of the notable achievements made under the stewardship of Minister Persaud.

Making their own imprints of transformation in their respective fields are Minister of Public Service, Sonia Parag—a strident enabler of the country’s literacy goals; and Minister of Tourism, Industry and Commerce, Oneidge Walrond. Walrond has been spearheading the reform of the nation’s tourism products while tackling the removal of bureaucratic red tape from the business environment.

Since 1992, Minister of Amerindian Affairs, Pauline Sukhai has been, and continues to be, a most passionate economist and human rights defender for the nation’s first people. As oil revenues increase, Sukhai has an incredible opportunity to advance innovative policies and programmes that transform the lives of indigenous groups. Her leverage is also extended with the signing of a landmark agreement on December 2, 2022. On that date, Guyana struck a historic deal with Stabroek block stakeholder, Hess Corporation, for the sale of carbon credits. The country is expected to gain a minimum of US$750 million of which 15% will be set aside for the development of Amerindian communities.

Minister within the Ministry of Housing and Water, Susan Rodrigues continues to lend her indomitable spirit and energies towards ensuring Guyana achieves Sustainable Development Goal #6 — the availability and sustainable management of water and sanitation for all. Minister of Parliamentary Affairs and Governance, Gail Teixeira, is one of the nation’s most experienced political scientists and has served the arena for more than 30 years. She has and continues to be, a fierce protector of Parliament’s stability and the pillars of democracy.

Conclusion

Oil revenues are not automatic springboards for transformative development. Chad, Equatorial Guinea, Nigeria, and Venezuela demonstrate how easy it can be for authorities to become ensnared in the oil dependence trap.

It takes innovative policies and programmes, shrewd governance, and politics to effect real change and steer clear of the resource curse. The women in government have already demonstrated that they are capable and desirous of taking Guyana into an era of transformation.

The next three years will be critical as they operationalise the transformative development and empowerment they wish to be remembered for.

About Energy Insights

From the people who bring you day-to-day coverage through OilNOW – the Caribbean’s premier oil, gas and energy information service – the Energy Insights column offers perspectives and analyses on the evolving energy sector in the South American/Caribbean region, and further afield.

The Federal Reserve Bank of New York, the holder of Guyana's Natural Resource Fund

Guyana’s Natural Resource Fund (NRF), held at the New York Federal Reserve Bank, soared to US$1,391,406,433 at the end of November 2022. In its monthly statement on the Fund, Guyana’s Central Bank said the account received GY$36.9 billion (US$177.14 million) in profit oil but no royalties.

Interest income earned during that period was GY$860 million (US$4.13 million).

With there being no outflows for the month, the closing balance was GY$290.1 billion (US$1.39 billion).

Up to the end of 2021, the Fund had accumulated US$607.6 million, which was assigned to support Guyana’s 2022 budget. US$400 million of this has since been withdrawn in two tranches. The final withdrawal is expected before yearend.

The Fund is being supported by revenues from royalties and sale of Guyana’s share of crude from ExxonMobil’s Liza operations. The government projected that revenues for 2022 will add up to US$1.247 billion.

A revised Natural Resource Fund Act was passed in the National Assembly and assented to by the president on December 30, 2021. The revised Act assigns the responsibility for the preparation of the investment mandate to the Board of Directors. To date, there has been no investment mandate for the Fund.

However, the Board of Directors and Public Accountability and Oversight Committee (PAOC) have been appointed.

Erin Butler, Director of US Commercial Service out of New Orleans (left) and Guyana’s President, Dr. Mohamed Irfaan Ali.

In November, Guyana welcomed trade missions from the United Kingdom, USA, and Canada. Similar engagements are planned with France and India, indicative of the government’s position that the country is “open for business.”

Senior Minister in the Office of the President with Responsibility for Finance, Dr. Ashni Singh recently provided greater context on the importance of these missions. According to the official, these trade missions serve a treble purpose. Firstly, they serve as an acknowledgment that Guyana’s exponential growth will need a “healthy dose” of imported expertise to ensure its efficient development. Indeed, this approach is not a novel one as it is also part of the blueprint used by nations such as Qatar, the United Arab Emirates, and the Kingdom of Saudi Arabia to ensure their hydrocarbons translate into transformative development.

Secondly, Dr. Singh explained that these missions pave the way for Guyanese businesses to connect with firms that have established networks with oil majors and their tier-one contractors. Guyanese authorities have long acknowledged that the creation of partnerships and synergies with seasoned players is a sure way to fast-track capacity building.

Thirdly, if Guyana is to achieve its goal of having a diversified economy, then it will need to lean on the knowledge and experience of key industry pioneers.

The foregoing was explained by Dr. Singh at a welcoming ceremony for a Canadian trade mission last month. There, he pointed out that Guyana is going through a transformation that has scarcely been seen in its history, or anywhere else in the world.

The official said, “There are few countries in the world that at any point in their economic history would have grown at rates of 20 percent in real terms over a sustained number of years. Guyana today is expected to grow in real terms in 2022 by a staggering 56% and over the next three to four years, by an almost equally staggering 25%.”

Dr. Singh said this growth rate is based on current proven reserves comprising 11 billion barrels of oil equivalent resources. The senior official said the government expects this resource base to increase significantly since ExxonMobil and its partners are pursuing further exploration on the Stabroek Block. He said these efforts to unlock sweeter, light crude will be complemented by the nation’s maiden auction, which was launched on December 9, 2022.

With such a production trajectory, Dr. Singh said Guyana, by any measure, is undergoing a meteoric pace of growth.

“What this does is that it creates opportunities for business around the world. We have never made a pretense of the fact that we are still learning about the oil and gas industry,” Dr. Singh said. Considering being at this stage of the learning curve, Dr. Singh has explained that Guyana is in need of the right partners to ensure its prosperity and development. At the same time, these potential partners and independent players must also show respect for the Local Content Legislation.

Visiting missions from the UK, USA and Canada have stated that they are keen on forming partnerships that provide “win-win” outcomes. Partnership agreements, in some instances, were also signed as a tangible reminder of this stated commitment.

The delegation from the UK led by Trade Commissioner for Latin America and the Caribbean, Jonathan Knott. (Stabroek News photo)

On November 16, 2022 Guyana and the UK inked a partnership agreement to bolster relations in trade and investment relations. This was the second UK trade mission to Guyana; the first being in February. Out of that trade mission, the Georgetown Chamber of Commerce and Industry (GCCI) had signed a memorandum of understanding (MoU) with the Caribbean Council, the longest-established London business organisation.

Members of the Louisiana Trade Mission pose after a tour of the Guyana Shore Base.

In November as well, the US Embassy in Georgetown and the Louisiana District Export Council (LDEC) led the largest American trade delegation to Guyana. While an agreement was not signed, the US Embassy in Guyana said more than 25 private sector leaders from across Louisiana and the United States connected with business leaders and government officials in Guyana. Critical discussions were also had with economic developers, industrial training experts, Louisiana state officials, as well as US government officials.

The visiting trade delegation with High Commissioner Mark Berman (seated third from right) and executives from the Canada Guyana Chamber of Commerce. (Stabroek News photo)

In late November, a Canadian trade mission with interests in energy, infrastructure, and procurement was also here late last month seeking partnerships with Guyanese. Some of these companies included WTG Canada, OPAS Mobile, North Star Associates, Shield Group of Companies, NetBenefit Software, Radient360 Solutions, DyTech Offshore Project Management Inc., and Blue Water Group. This engagement followed five previous missions to Guyana from Newfoundland and Labrador that saw several of the members of Energy NL creating partnerships and linkages in the new oil-producing country.

CONCLUSION

The increasing number of trade missions to Guyana presents significant opportunities for economic growth.

Without question, these relations hold the potential to boost Foreign Direct Investments (FDI) across various sectors. The Bank of Guyana, the nation’s chief financial regulator, had said at half year that the country’s FDIs saw a whopping 47.2% or US$629.7 million growth in the first six months of the year to US$1.964 billion. In spite of the challenges investors faced with COVID-19 and the Russia-Ukraine war, these investments are expected to increase for Guyana, home of the fastest-growing super basin.

Guyana has accepted early on, that the sheer size of her endowments, and the potential for further amplification, needs a “healthy dose” of imported foreign capabilities.

Such admissions, and well-executed policy decisions, are already proving that Guyana is not only on the right path for sustainable and transformative growth, but she is stealthy avoiding the mistakes of other failed oil states.

Fernando Hernandez

By Fernando Hernandez – OilNOW

To understand Guyana’s meteoric rise as an oil-producing nation, it is necessary to reference critical events that occurred in the U.S.’ Gulf of Mexico (GoM) in 1947 and 1986. These events were crucial to the South American nation rising to prominence on the global stage, regarding its offshore oil production and the discoveries that continue to be made in Guyana’s offshore sector (deepwater, to be specific). And based on the data provided herein, Guyana is on a path to rival the production of OPEC+ member nations and the GoM’s, reference Figure 3 and 4, respectively. Thus, it is not surprising that Guyana continues to garner global interest and awe, all while inspiring other nations in the South American and Caribbean region, such as Suriname, to further their offshore pursuits. Notably, this article will outline the rich history—and catalysts—that connects two countries on different continents via the U.S. and Guyana, and how the latter has evolved to forge its own distinct path in such an accelerated timeframe.

Figure 1: The Liza Destiny

Said events were critical to Guyana making the Liza discovery at a depth of 5,000 ft. in 2015. To be clear, other occurrences and developments transpired before Guyana became a prolific producer: within and outside of the GoM. Following the Liza discovery, Guyana would have its first-ever producing FPSO by 2019, in record time: less than five years, as a result of the Liza Destiny FPSO. ExxonMobil’s (Exxon) offshore successes in the Gulf of Mexico played a key role in the South American nation making a quantum leap to become a deepwater producer. This is bolstered by Exxon, the U.S. super major—making an additional commitment to expand its footprint in Guyana, as highlighted in Figure 2.

That said, the first event that would be a catalyst for Guyana’s rise occurred in 1947 when the first out-of-sight well was developed (at a depth of 20 ft.) by Kerr McGee in the GoM. This spurred further offshore exploration and production (E&P) work in the U.S., leading to additional discoveries in deeper waters. The second event comes in 1986 when the first well that surpassed the 5,000 ft. marker was drilled and discovered; this would become Shell’s Mensa field, which would reach first production in 1995. Comparatively, Guyana reached this depth 20 years later with the Liza discovery.

Figure 2: Guyana FPSO tracker with various data points from ExxonMobil

Guyana’s Importance in Expanding the Golden Deepwater Triangle

In a piece for Forbes written in 2020, the author began accounting for Guyana’s prominence in the golden deepwater triangle, back when Guyana only had one oil producing platform. For context, there are only three regions globally with deepwater plays, composed of the GoM, West Africa, and Eastern South America (historically through Brazil), which Guyana continues to contribute to and expand on. Moreover, Exxon has a presence in all three parts of the triangle; however, Exxon’s interest in the GoM has dwindled, and it has offloaded GoM assets, while reducing its deepwater operations to just one platform. In addition to the GoM, there are reports that Exxon is also looking to tactfully withdraw its Equatorial Guinea in West Africa.

To remind you, Shell left Guyana due to geological doubts. Exxon subsequently turned its attention to Guyana—in conjunction with CNOOC, and HESS—to fill the void, and gained substantial financial rewards while simultaneously boosting Guyana’s GDP on an upward trajectory. Today, Guyana has demonstrated that it is no longer an uncertain experiment in the golden deepwater triangle but has instead solidified its position as part of the triangle. Moreover, over the course of three years, the South American country remarkably boosted its production at an average pace of around 120,000 BPD per year, bringing its output to roughly 160,000 BPD. When accounting for production from present and future FPSOs—as listed in Figure 2, this illustrates that Guyana is expected to hit the one million BPD milestone in 2026 (seven years from first oil from the inaugural Liza Destiny FPSO).

Guyana’s Race to Reach 1-Million BPD

Once more, we find Guyana on the cusp of achieving a significant achievement. How so? As can be seen in Figure 3, it took the GoM 38 years, from 1947 (when the Kerr McGee development began) until 1985, to reach 956,000 BPD. Guyana, on the other hand, is positioned to reach 1 million BPD in seven years. Additionally, the U.S. needed 72 years to achieve a record high of 1.9 million BPD in 2019.

Figure 3: GoM production data (U.S. Energy Information Administration)

It is possible that Guyana will equal, or perhaps surpass the GoM’s record high as we enter the ensuing decade should further projects be approved in Guyana (based on its continued drilling success). Additionally, this is contingent upon the wells located there maintaining their ideal levels of production. If Guyana manages to surpass 1.9 million BPD in such a short amount of time, it will be an unparalleled accomplishment, all while firmly placing itself alongside OPEC+ members. However, the fact that Guyana can potentially produce somewhere within the range of 1 to 1.9 million BPD is significant in and of itself.

Figure 4 shows that five OPEC+ member nations generate more than 1 million BPD, in 2021, with only two having deepwater producing assets in more than 3,000 ft. Because of this, it is not surprising that Saudi Arabia, a de facto head of OPEC+, has signaled its interest in strengthening its connections to Guyana. The energy equation in Latin America and the Caribbean, and maybe the world, can be pronouncedly altered by the South American nation as it strengthens its position. It is important to note that the output figures presented in Figures 3 and 4 are likely to change throughout the course of the subsequent years; despite this, they serve as a reference benchmark for Guyana.

Figure 4: Data points in table are from bp’s Statistical Review of World Energy

Guyana’s Low Carbon and Oil Pursuits

It is essential to emphasize that Guyana has designed its Low-Carbon Development Strategy 2030, illustrating how the country can pursue oil production while concentrating on placing such investments on its energy transition pathway. This is similar to Norway, which produced 2.0 million BPD in 2021 yet managed to become the number one Electric Vehicle (EV) nation (per capita) in the world. Guyana is only getting started on the process of building up its EV infrastructure. Despite this, Norway’s expertise might be helpful to the South American nation. In conclusion, as we get closer to the year 2030, it will be very important to keep a close check not just on the country’s low carbon and energy transition goals, but also on its oil production. At the time of this writing, one thing is abundantly clear: Guyana has given the oil world a myriad of reasons to take attention.

About the Author

Fernando C. Hernandez is an accomplished commercial and technology specialist in energy and the principal at Hernandez Analytica. The First Minister of Scotland, Nicola Sturgeon, appointed Hernandez as a business ambassador (GlobalScot) for Scotland in Americas’ energy sector. He has more than 15 years of industry experience, and his tri-lingual fluency has enabled the execution of challenging projects in multiple continents. Hernandez collaborates with Scottish Development International on diverse energy projects and has two additional appointments: Technology Mentor for the Net Zero Technology Centre (UK), and Chairman at the Marine Technology Society (US). Additionally, he has a history of providing industry contributions to the Mexican Institute of Petroleum, Scottish Enterprise, American Petroleum Institute, US Coast Guard, US Bureau of Safety and Environmental Enforcement, and Pipeline Research Council International.

From top: Minister of Natural Resources, Vickram Bharrat; Executive Director of the Environmental Protection Agency, Kemraj Parsram; Commissioner General of the Guyana Revenue Authority, Godfrey Statia; Minister of Finance, Dr. Ashni Singh and Vice President Dr. Bharrat Jagdeo

In its 2020 manifesto, the People’s Progressive Party/Civic administration pledged to ensure better contract management for the Stabroek Block Production Sharing Agreement (PSA) and future contracts.

In just two years, the government has embarked on a number of legislative and regulatory reforms– a good sign that it intends to stay true to its word.

The passage of the Local Content Act as well as the strengthening of the Natural Resource Fund Act in December 2021, are two of the main achievements for the government on the legislative front.

The former not only protects the interests of Guyanese workers but also increases locals’ participation in 40 categories in the First Schedule. These areas include catering, janitorial services, ground transportation, food supply, rental of office spaces, and local marketing and advertising. It is estimated that they can bring in about US$700 million per annum.

The NRF law, which was first introduced by the APNU+AFC, saw several potentially lethal flaws such as entrusting alarming powers to the Finance Minister, removed. New provisions in the NRF Act include simplified rules for withdrawals from the account. It also criminalises the nondisclosure of oil receipts by the subject minister.

With respect to the Stabroek Block Production Sharing Agreement (PSA), the government has categorically stated that given its respect for the sanctity of contracts, this PSA would not be touched. But certain actions can be seen as a means to generate greater value to Guyana in the absence of renegotiation. Meantime, the government is making certain that new contracts are subjected to better terms. In fact, PSAs will be armed with 10% royalty, the payment of a 10% corporate tax and a 65% cost recovery ceiling. Profit oil would be split 50/50. The new model PSA is still in the incubation stage but is expected to be released.

Importantly, the new PSA will be used for the ongoing licensing round for which submissions will close in April 2023. This licensing round also notably brings an end to the one-on-one negotiations approach previously utilised for the award of blocks.

On the institutional front, the Guyana government has been working to strengthen the capacities of the Guyana Revenue Authority (GRA), the Ministry of Natural Resources and the Environmental Protection Agency (EPA).

At his most recent engagement with local media, Vice President, Dr. Bharrat Jagdeo explained that the administration intends to improve the operational efficiencies and competencies of these key regulators. He said work is ongoing to beef up the Guyana Revenue Authority since it is the main functionary in charge of auditing for tax purposes.

Dr. Jagdeo said, “We are trying to recruit people to audit for tax purposes… We had some setbacks with losing qualified locals, but we believe we can get back on track.”

He also noted that the government is working simultaneously to build local capacity to conduct cost recovery audits. A local consortium was hired earlier this year, consisting of Ramdihal and Haynes Chartered Accounting and Professional Services Firm, Vitality Accounting and Consultancy Inc., and Eclisar Financial & Professional Services. They partnered with the Oklahoma-based Martindale Consultants Inc. and the Swiss technical company, SGS to audit ExxonMobil’s 2018 to 2020 cost recovery bills.

For the Ministry of Natural Resources, he said it is the government’s intention to strengthen its ability to manage the sector through modernized laws. VP Jagdeo, in this regard, said “the law, which was birthed in 1986 cannot defend our interest enough and it is not fit for the modern-day management needed. It needs to change. Hopefully, by March, that can be before Parliament.” He said a contract for the review of the archaic laws, has already been awarded.

With respect to the Environmental Protection Agency, he noted that several initiatives were funded to strengthen the capability of the agency to manage, track and respond to a range of environmental issues. One of the major accomplishments, he said, is the fact that the EPA has strengthened the permits for the oil sector. These permits now demand financial assurance from parent companies, an array of studies on the technologies to be used for emissions reduction, as well as payments by the companies for onboard audits.

He said too that the EPA now requires a higher standard be adhered to for treatment of wastewater and cradle-to-grave management. He was also proud of the fact that the country, through the EPA, now implements a tax on flaring.

Looking ahead, VP Jagdeo said the government intends to increase the operational independence of the EPA, where it will have satellite technology to track instrumentation and measure the amount of oil the country receives. He said this approach will also be extended to the full legislative and regulatory armory for the sector.

CONCLUSION

The foregoing are just a few examples of the seemingly hardcore reforms being implemented by the government to ensure Guyana is able to manage the incoming oil wealth effectively.

In just two years, Guyana has opened a tender for the establishment of a modular refinery for national security purposes, launched its first bid round, advanced efforts for its flagship gas-to-energy project, and commenced work on a new model PSA.

It is also planning to have its own specialized Crude Marketing Unit, which will be led by Middle Eastern-trained Guyanese.

The administration has also been running at a hundred miles an hour to lay the foundation for sustained, diversified growth despite the challenges of the COVID-19 pandemic and the Russia-Ukraine war.

These actions clearly show that the will stop at nothing to input the building blocks of a modern architecture for managing the oil and gas industry. Should it stay the course, Guyana’s oil bonanza is sure to translate into transformative growth for all.

About Energy Insights

From the people who bring you day-to-day coverage through OilNOW – the Caribbean’s premier oil, gas and energy information service – the Energy Insights column offers perspectives and analyses on the evolving energy sector in the South American/Caribbean region, and further afield.