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Guyana oil projects moving 2-3 times faster than any other in the world – Hess CEO

By OilNOW 0 -- Source -- OilNOW

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A module being lifted onto the hull of a Guyana-bound FPSO.

Guyana’s offshore Stabroek Block developments have been outstanding performers when it comes to pace and efficiency. Hess Corporation’s Chief Executive Officer (CEO), John Hess said the projects come on two to three times faster than any other global offshore development.

During his participation on Thursday at Bernstein’s 38th Annual Strategic Decisions Conference in New York, Hess reminded that the Stabroek Block has been an apt representation of industry-leading capabilities backed by the efforts of its operator, ExxonMobil with 45% working interest, Hess with 30% and China’s National Offshore Oil Corporation with 25% percent.

Hess was pleased to inform attendees that in three years, the partners were able, from the time of investment decision, to add the Liza Unity floating production, storage and offloading (FPSO) vessel to the Stabroek Block that can add 220,000 to 250,000 barrels of oil per day in production capacity, while adding “our tie backs would be about 18 months.”

The CEO said, “In Guyana, we are getting these big FPSOs and as we define more oil that is very low cost, high margin and low carbon footprint oil which makes it needed 20 years from now and gives us an advantage over other companies, it takes about three years from when you make the investment.”

Hess commits US$2.3 billion to Yellowtail development | OilNOW

“We just got sanctioned on April 1, 2022, on Yellowtail which is our fourth development, and it will be 250,000 barrels a day ship with opportunity for upside and that oil will be on in 2025. So, for Guyana it is three years but for the Gulf of Mexico it is about five years,” he said.

Speaking to the desire and approach to have such record-breaking operations, Hess said it involves spending enough time doing the exploration and appraisal work to define for example, a 600-million-barrel resource to a billion-barrel resource to underpin a ship. The CEO said the partners are queued up now for the fifth ship which will hopefully get sanctioned by the end of this year and the sixth by the end of next year.

Exxon’s 5th project could produce up to 275,000 bpd, with first oil as early as 2026 | OilNOW

Hess said, “When we were fortunate enough to have our first discovery in 2015, I remember talking to Rex Tillerson [Exxon’s former CEO] about this and he said, ‘John we want to go as fast as we can with this, but we don’t want any leakage.’ And what was he saying? We must be capital efficient and operating expense efficient. Doing one ship a year is a huge task for project management, for execution, for yards to handle it and Exxon is probably the best in the business at doing this.”

Hess said ExxonMobil’s philosophy of “design one and build many,” which will result in one FPSO coming on board every year is industry-leading. He said too that his company has a page in its investor pack which actually shows how its development of oil production in Guyana is “two to three times faster than any other global offshore development.”

FPSO contracts surge; Guyana contributing to global total this year – Rystad Energy

The CEO concluded, “So we are going fast but we are bringing value forward.”

Hess and its co-venture partners currently have four sanctioned developments in the Stabroek Block.

The Liza Phase 1 development, which began production in December 2019 utilizing the Liza Destiny FPSO with a production capacity of approximately 120,000 gross barrels of oil per day, recently completed production optimisation work that expanded its production capacity to 140,000 gross barrels of oil per day.

The Liza Phase 2 development, utilising the Liza Unity FPSO, began production in February 2022 and is expected to reach its production capacity of approximately 220,000 gross barrels of oil per day by the third quarter.

The third development at Payara is ahead of schedule and is now expected to come online in late 2023 utilising the Prosperity FPSO with a production capacity of approximately 220,000 gross barrels of oil per day.

The fourth development, Yellowtail, is expected to come online in 2025, utilising the ONE GUYANA FPSO with a production capacity of approximately 250,000 gross barrels of oil per day.

SBM Offshore confirms contract awards for ‘One Guyana’ Yellowtail FPSO

At least six FPSOs with a total production capacity of more than 1 million gross barrels of oil per day are expected to be online on the Stabroek Block by 2027, with the potential for up to 10 FPSOs to develop gross discovered recoverable resources.

Dutch floater specialist, SBM Offshore, has won contracts to build and operate the FPSOs for all the projects approved so far at the Stabroek Block.

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With LCDS 2030, Guyana aligns oil sector with global climate ambitions

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Kanuku Mountain Rainbow (Photo: James Brascombe)

Today, Guyana joins the globe in celebrating World Environment Day 2022. This year’s campaign “Only One Earth” calls for collective, transformative action on a global scale to celebrate, protect and restore the planet.

For many countries restoring the planet will prove to be challenging — but not in Guyana’s case.

In fact, since 2009 when the first phase of the Low Carbon Development Strategy (LCDS) was launched, Guyana has been a global model in sustainable management, forest and biodiversity conservation. With 13 years of knowledge and experience, Guyana has attained a greater understanding of the vital contribution the country’s ecosystems give to the health of the world, as well as its role as one of the world’s most important countries for biodiversity conservation. It is on this premise that the Government of Guyana relaunched the new and expanded LCDS 2030.

Guyana proudly boasts impressive environmental credentials. With over 18M hectares of forest, the country holds the title of the second highest percentage of forest cover on earth. The forests also store 18% of the world’s forest carbon, 20% of the world’s fresh water and a low deforestation rate that is 90% lower than other tropical countries.

On an occasion like World Environment Day, much of the conversations will be about abandoning fossil fuel production and achieving Net-Zero by 2050. Fortunately, Guyana has found a way to sustainably manage its oil and gas sector while also aligning it with climate goals at global and national levels.

At the international level, Guyana, since 2009, has supported a global price on carbon – whether through a global carbon market or a global carbon tax regime. The government has issued calls on the international community – working through the United Nations Framework Convention on Climate Change (UNFCCC) and other relevant international institutions – to accelerate work on both the methodology and implementation of this pricing regime.

Secondly, the LCDS 2030 backs call for the removal of subsidies for fossil fuel production. For context, a fossil fuel subsidy is a government action that lowers the cost of fossil fuel production. Just in 2019, 50 of the largest more developed economies of the world benefitted from US$178 billion in subsidies.

Against this, the new and expanded LCDS reads, “Guyana supports calls for the elimination of such fossil fuel subsidies, especially in OECD (Organisation for Economic Co-operation and Development) countries where subsidies are the most distorting. This will lead to the breakup of the current monopoly-like situation, and the stabilising of price levels.”

Meanwhile, at the national level, the government has been implementing a fee on the flaring of natural gas. Just last week, the Environmental Protection Agency (EPA) announced that it had amended the Liza One environmental permit, which now sees ExxonMobil affiliate Esso Exploration and Production Guyana Limited (EEGPL) paying an increased fee of US$50 per tonne of carbon dioxide emitted during flaring. Thus far, Guyana has managed to reap GY$1.7 billion in flaring fees.

In addition to the fee on flaring, Guyana has put measures in place to support the use of innovative technology in oil exploration and production. Last December, Vice President Dr. Bharrat Jagdeo shared that the government had granted ExxonMobil approval to conduct a study on carbon capture utilisation and storage (CCUS) technology. CCUS is the process of capturing carbon dioxide that would otherwise be released into the atmosphere from industrial activity and injecting it into deep geologic formations for safe, secure and permanent storage.

Further, LCDS also advocates for the use of renewable energy in oil production, and where technologically viable, the use of green hydrogen.

Without a doubt, this small South American nation has done more than its fair share in protecting the environment for decades. Even with such remarkable credentials, Guyana is set to continue on the path to maintaining environmental sustainability as well as advocating for global climate goals – particularly as it looks to develop its oil and gas industry.

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‘If CGX can’t raise funds to meet commitments, that’s none of our business’ – Jagdeo

By Kemol King 0 -- Source -- OILNOW -- https://oilnow.gy/featured/if-...our-business-jagdeo/

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Vice President of Guyana, Dr. Bharrat Jagdeo

Not long after the Irfaan Ali administration assumed office in 2020, CGX Energy was granted an extension to its deadline to drill a well on the Corentyne block offshore Guyana. While it looks like CGX may need another extension – this time for the Demerara Block – the government does not plan to be as lenient.

Vice President Dr. Bharrat Jagdeo said that it is “none of our business” if the company “can’t raise the money.”

This was his response when OilNOW asked how government would treat with CGX if it can’t meet its Demerara block commitments. The CGX-Frontera joint venture had noted during a technical presentation in May that it is more “enthusiastic about the potential of North Corentyne” where the Kawa-1 discovery was made, and where the JV plans to drill another well later this year.

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Map shows offshore acreage operated by CGX, in proximity to several high profile discoveries in the Guyana-Suriname basin

The JV said that while Minister of Natural Resource, Vickram Bharrat noted a requirement to drill two exploration wells at the Demerara block by February 2023, it has no plans to drill there in 2022.

CGX leaves narrow window to meet Demerara Block drilling commitments, with no wells planned for 2022 | OilNOW

“We’ll just have to see what happens,” CGX’s Senior Technical Advisor Dr. Mark Zoback had said.

“Let me say to CGX publicly that they have had a long period here, and I’m very pleased that they have moved forward,” Dr. Jagdeo said. “But if they don’t meet their commitments, then there will be consequences.”

He said CGX has been “nurtured” for a long time and must now meet all the commitments it signed up to.

“If they’re not moving ahead as planned, there has to be really good reasons for them to retain the areas.”

But if there are no extenuating circumstances, he said the block will have to be relinquished.

CGX currently operates three blocks, in partnership with Frontera Energy – Corentyne, Demerara and Berbice. Government has also been after the joint venture to honour commitments at the Berbice block.

Government wants CGX to carry out work commitments on Berbice, Demerara blocks | OilNOW

But with the Corentyne block appearing to be their best bet at a commercial development, the operator has placed all its focus there. And to secure a US$35 million loan from Frontera to finance works at Corentyne and the construction of a deepwater port, the operator bet all its assets, in a move that could see the minority partner expanding its ownership of CGX’s shares.

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‘Guyana must explore every revenue-generating activity to achieve climate adaptation and mitigation’ – President Ali

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Dr. Irfaan Ali, President of Guyana.

In 2010, developed countries committed to jointly mobilise US$100 billion annually in climate finance by 2020 to support developing countries in reducing emissions and adapting to climate change. However, as the globe celebrated World Environment Day on Sunday, Guyana’s President, Dr. Mohamed Irfaan Ali, highlighted what he deemed unwillingness by the developed countries to stay true to their climate financing commitments. It is against this backdrop that Dr. Ali, in his World Environment Day speech, underscored the importance of Guyana exploring every revenue-generating activity to pursue climate adaptation and mitigation.

“We are far away from the minimal $100 billion pledge that the developed world would have made to fight climate change, adaptation and mitigation measures. If you look at adaptation alone, just for adaptation measures in the developing economies, it will cost between US$140B to US$300B annually if we are to successfully meet adaptation costs alone by 2030,” Mr. Ali said.

Developed world not providing climate adaptation support; we have to fend for ourselves – VP Jagdeo | OilNOW

He continued, “This is a reality, with rising sea levels, with changes in climatic conditions. This is the cost; this is the investment that is required. That is why developing countries like Guyana must take a balanced approach; we must explore every possible revenue-generating activity so that we can have the resources necessary for adaptation and mitigation. But we must do so in a sustainable way.”

The Government of Guyana recognises the value and lucrativeness of its oil and gas industry, so despite calls from the anti-fossil fuel lobby for the nation to abandon the sector, the nation remains steadfast in its development. With current oil prices, Vice President Dr. Bharrat Jagdeo expects Guyana to be making upward of US$4B annually from approved oil developments. The funds from this sector can invest in social and economic transformation in Guyana, as well as diversify the non-oil economy – a policy the government has been keen to achieve.

Guyana oil bounty can fuel massive economic diversification, says US Ambassador | OilNOW

Meanwhile, President Ali pointed out that the world must not live in silos, but rather within the construct of the global reality. It is on this premise that he linked the importance of the new and expanded Low Carbon Development Strategy (LCDS) 2030. This national advancement plan, he noted, will position itself to be a global model on how to achieve sustainability in the management of the economy and environment, as well as remove inequality and disparity in society.

“What we want to do is to create a model. We cannot have One World if, in countries, we have divisions. We want to create a model as to what a One Guyana means and what One World should mean,” he said.

In the balanced approach that the world must attain, President Ali also spoke of the importance of achieving energy and food security.

“Our policy mix must be realistic. We have to pursue policy formulation that reflects this balance; policy formulation that ensures we build a country that is resilient to all of these threats whether it is climate, food or water. In our country, the sustainable pathway must be built in a resilient way to confront all these threats,” the Guyanese head of stated said.

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Guyana does not owe Exxon a cent; nonsense passing off as analysis – Vice President

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Dr. Bharrat Jagdeo, Vice President of Guyana.

The contention that Guyana would not be able to reap the benefits of oil production without racking up millions of dollars in debt to Stabroek Block operator ExxonMobil is misleading, said the country’s Vice President, Dr. Bharrat Jagdeo.

During a recent press conference, he sought to denounce claims which were made by a United States based analytics firm, the Institute for Energy Economics and Financial Analysis (IEEFA).

IEEFA said each citizen owes ExxonMobil some GYD$9 million each but, according to the VP, this was only said to confuse the masses.

“The only debts that this country has to repay are debts contracted or guaranteed by the state, and I told you already that is only 16% of Gross Domestic Product (GDP). So, no debt contracted by Exxon or any of these companies are guaranteed, or we are party to. So, the citizens of this country do not have to pay,” Dr. Jagdeo clarified.

The additional claim that Guyana would not reap the benefits of its oil wealth until it repays its debts to the oil companies was also debunked by the Vice President.

Guyana could earn over US$130 billion in the next 20 years, says Rystad Energy

“If you look at even the original agreement that was signed since 1999, you will see that there is a cut-off point for cost recovery from revenue of 75% [so] 75% of revenue goes to cost recovery, including servicing and everything else, and 25% from day one becomes available as profit oil, of which we will get 12.5% and then a 2% as royalty, which gives us about 14.5% from day one.”

The Vice President was pointing out the terms of the agreement between Exxon and Guyana which provides for the South American country to receive half the profits from oil produced and sold, in addition to two percent royalty. Guyana is also not required to plug any money up front for exploration and production operations. This is a risk carried solely by the oil companies operating offshore.

The Vice President pointed out that the current oil vessels operating in Guyana can garner enough revenue – with a share of US$50 per barrel – to clear the country’s debt level.

Guyana’s ‘incredible oil bonanza’ growing, analysts project bigger earnings, flag potential pitfalls | OilNOW

If that share increases, to say, US$100, Guyana’s revenue would be greater; in fact, the VP pointed out further that one year’s revenue in the future would be “twice the size” of the country’s current debt level.

“[So], they are just confusing the heads of people with this nonsense that passes off as analysis,” he added.

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Guyana not being relegated to status of ‘rent collector’; country seeking big gains from oil resources – Ramnarine

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Kevin Ramnarine, former Minister of Energy and Energy Affairs of Trinidad and Tobago.

Guyana’s steadfast drive for local participation in its oil and gas sector is being lauded by former Trinidad and Tobago Minister of Energy, Kevin Ramnarine.

Though private sector leaders of the two Caribbean Community (CARICOM) nations have been at odds in recent times, regarding aspects of Guyana’s Local Content Policy, Ramnarine praised the new oil producing nation for its value capture stance on not being just a “rent collector” – only raking in royalties and taxes from International Oil Companies (IOCs) operating offshore.

Guyana will not be bullied on Local Content Policy – VP Jagdeo | OilNOW

“The undertaking of high-value activities in the host country by companies owned and controlled by nationals is another way to capture the value and, in this regard, the Guyanese Government has taken a firm stance that it will not be relegated to the status of rent collector,” the former Energy Minister wrote in a recent column.

Guyana’s push for local participation in high-value activities in its oil sector, according to Ramnarine, is already beginning to bear fruit and will bring more successes ahead.

IHS Markit applauds local content law, as Guyanese go after billions in oil investments | OilNOW

“And any visible sign of success is the provision of shore base services by Guyanese companies,” he pointed out.

Leading in this regard is the Guyana Shore Base Inc. (GYBSI) a consortium of companies mostly controlled by Guyanese. It is currently the country’s premier shore base, supplying a range of integrated services to the oil sector.

Over the years, GYSBI has enhanced its capacity and expanded its services. This has contributed to ExxonMobil – the operator of the country’s prolific Stabroek Block – moving all supply work from Trinidad to Guyana.

The supply chain capacity in Guyana has been growing exponentially over the years and with the new Local Content law in place, local businesses have been readying themselves to reap the benefits – forming consortia and undergoing the training needed to supply the sector with quality service.

Guyana to conduct national year-end capacity assessment to update local content law – Bharrat | OilNOW

Additionally, the state-of-the-art Port of Vreed-en-Hoop,  a facility operated by a majority-controlled local consortium, is being constructed on the west bank corridor. Already, a major contract has been signed between Exxon and the Vreed-en-Hoop Shore Base Inc., operating at the facility.

Guyana’s Local Content Act contains 40 areas with targets to ensure that local businesses are given first preference to participate in the country’s oil wealth. These services include the supply of goods and the provision of services like food supply, insurance, accounting, and legal services.

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IDB expands funding for capacity building efforts in Guyana as oil operations surge

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Pipe loading operations at a shore base facility in Georgetown, Guyana. (OilNOW photo)

The accelerated pace of oil and gas operations in Guyana is demanding more from supporting institutions. The economic context is changing so quickly that the Inter-American Development Bank (IDB) has had cause to restructure and expand a multi-million-dollar loan for the Guyana National Bureau of Standards (GNBS), to reflect the new order of the day. Guyana is set to benefit from US$17 million under the program.

In November 2016, the Bank had approved the operation of a project titled “Enhancing the National Quality Infrastructure (NQI) for Economic Diversification and Trade Promotion” for US$9 million, with the objective of supporting economic diversification and export in the new oil-based economy.

The specific objectives at the time the loan was approved are as follows: enhance the capacity of the NQI, improve facilities for the NQI, and enhance the capability of the Guyana Office for Investment for export and investment promotion. The US$9 million programme had three subcomponents: modernisation of the institutional framework of the NQI; improvement of laboratory facilities and equipment; and implementation of a national export and investment strategy.

American Petroleum Institute to help Guyana boost standards in growing oil and gas industry | OilNOW

Under the rapidly expanding economic context for oil and gas between 2016 and 2021, the IDB said the demand for services from the GNBS increased significantly, thus the need to increase the physical scope of the original laboratory facility, for example, was necessary.

In order to align the government priorities of a more diversified and productive base, the Ministry of Finance on September 6, 2021, requested additional financing of up to US$3 million. This is to cater for new services required of GNBS in the area of business development and training in ISO Standards for Guyanese firms.

Guyana regulators internationally trained to measure crude lifts | OilNOW

The Bureau’s functions have also expanded to ensure the integration of small and medium-sized enterprises (SMEs) into new value chains (tourism, hospitality, construction, agribusiness, health, oil among others) and additional requirements for legal metrology.

In addition, the expansion of construction, manufacturing, agriculture, law enforcement and health services, as well as the modernisation of environmental and climate regulations to align with the Low Carbon Development Strategy 2030, require more legal metrology services. In light of this, the IDB said the request for the loan was updated on May 11, 2022, adjusting to the increase in construction costs in Guyana for additional financing up to US$8 million.

The Guyana National Bureau of Standards (GNBS) which has grown from 65 to 130 employees since the emergence of oil, operates under the Ministry of Tourism, Industry and Commerce (MTIC) and holds responsibility for standardisation, formulation and application of standards, technical regulations, conformity assessment procedures and metrology.

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Guyana to lead Latin America, Caribbean with highest 2022 growth rate – World Bank Report

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A section of Guyana's capital city, Georgetown

While the war in Ukraine is having substantial effects on the Latin America and Caribbean Region via higher commodity prices and weaker global growth, Guyana on account of its oil industry is projected to lead the pack this year with the highest forecast for Gross Domestic Product (GDP) growth.

This was noted in the World Bank’s latest Global Economic Prospects report released on Tuesday.

With respect to global growth, the World Bank said this is expected to slump from 5.7% in 2021 to 2.9% in 2022— significantly lower than 4.1% that was anticipated in January. It is expected to hover around that pace over 2023-24.

Turning to Latin America and the Caribbean Region, the World Bank said growth is expected to slow sharply to 2.5% in 2022, following a post-pandemic rebound of 6.7% in 2021.

Guyana to benefit most from rising oil price in Latin America region – AMI analysis | OilNOW

Furthermore, growth is set to decelerate further in 2023, to just 1.9%, before picking up slightly to 2.4% in 2024. OilNOW understands that the regional slowdown reflects tightening financial conditions, weakening external demand growth, rapid inflation, and high policy uncertainty in some countries.

Additionally, Central America’s economy is forecast to expand 3.9% in 2022 and 3.5% in 2023. This moderate slowdown tracks activity in the United States, the main source of export demand and remittances.

Growth in the Caribbean is projected at 6.9% in 2022 and 6.5% in 2023, helped by recovering tourism.

For Guyana, the World Bank said the oil producing nation remains on track for a 47.9% growth rate followed by 34.3% the following year, still representing the highest growth forecast for the region.

High energy prices could lead to ‘stagflation’ in Latin America – Arthur Deakin | OilNOW

As for Suriname, the CARICOM state is projected to see a modest 1.8% growth rate for 2022.

Guyana currently has two floating, production, storage and offloading (FPSO) vessels operating at the Liza Phase 1 and Liza Phase 2 Projects in the Stabroek Block which spans 6.6 million acres (26,800 square kilometers). Two other oil projects are set to come on stream by 2025.

ExxonMobil affiliate Esso Exploration and Production Guyana Limited is the operator of the oil-rich block with a 45% working interest. Hess Guyana Exploration Ltd. holds 30% interest, and CNOOC Petroleum Guyana Limited holds 25% interest.

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Regional Oil and Gas Bonanza and the 25×2025 Food Import Reduction Imperative

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Dr. H. Arlington Chesney

Dr. H Arlington D Chesney – OilNOW

The Government of Guyana, in association with the CARICOM Secretariat, held an Agri-Investment Forum and Expo: investing in Vision 25×2025 from May 19 to 21, 2022. This initiative is consistent with the position of this Guyanese administration, starting with Dr. Bharrat Jagdeo when he was President as lead Head in CARICOM for agriculture.

COVID-19 decimated the logistics of the region’s food availability primarily because of uncertainty of supply. Since the start of the war between Russia and Ukraine, supply by these two countries of wheat, barley and maize to the world has reduced significantly. Previously, they supplied 28%, 29% and 15%, respectively, of these commodities. World supply was further reduced when China and India banned exports of key food commodities. The end results are limited availability of food, high prices of food and production inputs and unpredictable transport. These are exacerbated by the ever-present negative impacts of climate change on the regional community.

Food insecurity, recently reported to have increased by 72% in the past two years, would most likely further increase. This situation underscores the importance of the lead position that the Guyana government has resumed under President Dr. Mohamed Irfaan Ali to achieve a large measure of CARICOM food security. Indeed, Guyana’s strong leadership for this vision at the time when its financial strength and capacity have dramatically improved, enhances the possibilities of this vision now being embraced by regional governments. This dedicated approach may be linked to the desire of the Guyana government to minimise the possibility of its economy suffering from the “resource curse” by meaningfully investing oil and gas revenues in its other productive sectors, particularly agriculture and food, and, by extension, that of its regional partners.

The event was attended by a Group of CARICOM Heads of Government (Group) from Antigua and Barbuda, Barbados, Belize, Dominica, Guyana, Montserrat and Trinidad and Tobago, as well as high-level representatives from The Bahamas, Grenada, Jamaica, St. Vincent and the Grenadines, Suriname and regional and international institutions. There was also a plethora of potential financiers, investors and Agri-entrepreneurs.

The Group unanimously welcomed and endorsed President Ali’s “Vision of the Agricultural Development Plan- [aligned with advancing the CARICOM Agri-Food Systems Agenda: Prioritising Food and Nutrition Security and the 25 x 2025 Plan.]”  This Vision is aimed at reducing food imports, enhancing investment in the agriculture and food value chain, introduction of practical solutions to support intra-regional trade and strengthen economic integration.

However, a number of crosscutting issues were also identified. These included enhancing and re-engineering human capital; promoting advocacy to realign public mindsets to accept that “local/regional is good”; increasing absolute and relative allocations to agriculture within national budgets; enhancing efficiency of intra-regional transport and port facilities, including customisation; improving availability of financial, including insurance, systems; and establishing systems for single registration of companies.

Because of the importance of these cross-cutting issues and recognition of the negative consequences of the “lack of action in implementing the Jagdeo Initiative”, there was acceptance that the leadership of this Programme at national level must reside with Heads. Further, four priority areas were recommended to the Conference of Heads of Government (Heads): Food Insecurity, Regional Transportation, Trade Barriers and Women and Youth, “to address food security urgently and sustainably, through the speedy implementation of decisions”. Plans and/or studies, along with implementation schedules, in these areas were recommended for “urgent consideration by the Heads”.

Some suggestions are now provided to significantly contribute to the successful implementation of current and future actions, as well as the very critical role of regional oil and gas revenues in their achievement. These suggestions should be read with those articulated in my previous article “The Implementation Deficit and the Regional Food Import Bill”.

The context for these suggestions are: firstly, there are only 3.5 years left to achieve the set target (COVID-19 delayed action by 2.5 years); secondly, with food imports now estimated at US$6 billion, to achieve 25% reduction in food imports, the region must produce an additional US$1.5 billion more food by end 2025; thirdly, food insecurity, with possibility of hunger, may escalate. It is evident that “business as usual” cannot continue.

The prevailing CARICOM management system was not designed for this new and urgent situation. As such, the Group agreed that Heads must be directly involved. This can be affected by each Head appointing an “Agricultural Development Plan Manager” in his/her Office. Together, they will form an Agricultural Plan Implementation Review Group akin to the effective Summit Implementation Review Group of the Americas. It will be responsible for monitoring, reviewing and reporting on progress of implementation of the programme, including the many bilateral MOUs. The Ministerial Task Force (MTF) on Food Security should maintain responsibility for developing and finalising plans, including indicative national and Sub-Regional commodity targets and schedules. The details, such as, Terms of Reference and relationships within this arrangement, must be determined. However, the MTF will be the “engine room” and the Heads’ representatives, collectively, will be the “enforcer”.

There must be commodity focus. Based on (1) magnitude of imports, (2) available production knowledge and market intelligence, and (3) dietary importance, the CARICOM Private Sector Organisation in 2019/2020 gained acceptance of Heads of the following priority commodities: poultry meat, hatching eggs, animal feed (corn), meat (mainly of sheep and goats) products, niche vegetables, cassava, and coconuts. These provide an acceptable start. However, the following crops should be added: Rice (for human consumption and animal feed), soya beans (for animal feed) and root crops (to expand the range of starches). Wheat, which has recently received a lot of discussion, isn’t included as no commercial trials are reported.

Current and future challenges/constraints will be “commodified” to enable specificity of decisions thus facilitating appropriate, product specific and timely actions.

The production of an additional US$1.5 billion of food in the region could require US$7.5 billion of expenditure depending on an empirically anticipated rate of return of 20%. Assuming 50% of the required financially dependent infrastructure exists, the amount will approximate US$3.75 billion. A large amount to be provided by both the public and private sectors, especially those experiencing an oil and gas bonanza. The Exxon-led group operating in Guyana has estimated a recoverable resource of 11 billion barrels of oil equivalent with a total value in the hundreds of billions. Hence the special role of participants in this sector.

The rationale for the intervention of the governments of Guyana and Suriname in their agriculture and food sectors is primarily to minimise the possibility of the “resource curse”. However, since for political reasons, they cannot produce all of the additional regional food requirements, they should support their partners: cash strapped because of the Pandemic, the Russia/Ukraine war and, in some cases, ravaging natural disasters.

Without such support, there could be inequitable intra-regional economic development with potential immigration waves, possibly associated with national security concerns, such as, human, gun and drug trafficking. The region has experienced similar waves previously. During its oil and gas bonanza period, Trinidad and Tobago established a Petroleum Fund to assist in financing development activities within the Region. Therefore, there’s a precedent from which to learn.

The private sector has already announced initiatives to become directly or indirectly involved in food production and utilisation activities. However, these initiatives must be more focused to contribute significantly to the achievement of the Agricultural Plan. Some areas for this specific support have been provided in my previous article, “The Implementation Deficit and the Regional Food Import Bill”.

The implementation of these suggestions – modified or expanded – in these three key areas could contribute to the region moving into the action phase and enhancing the possibility of achievement of the 25×2025 Vision.

About the Author

Dr. H. Arlington Chesney is a leading Caribbean Agricultural professional who has served his country, the Caribbean and the hemisphere. He is a Professional Emeritus of IICA and in 2011, was awarded Guyana’s Golden Arrow of Achievement for his contribution to agricultural development in Guyana and the Caribbean.

Demerara_Guy

Big volumes at 18,000 ft could see standalone FPSO for new Stabroek Block development

By OilNOW 0 -- Source -- OilNOW

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

The Fangtooth discovery which was announced by ExxonMobil back in January 2022 holds enough oil deposits to underpin its own floating, production, storage and offloading (FPSO) vessel. This was disclosed by Hess Corporation which has a 30% working interest in the Stabroek Block.

Chief Executive Officer and President of the company, John Hess said the majority of the Stabroek Block’s oil has been at 15,000 feet. This depth is referred to as the Upper Campanian or the Cretaceous age. Hess was speaking at the time at the Bernstein’s 38th Annual Strategic Decisions Conference.

“But what we are finding now is at 18,000 feet, there are sand channels that are actually starting to trap the oil that is also being trapped at 15,000 feet. When we drilled to 18,000 feet, it was never optimally located to drill the biggest prospects,” he said. “This year, however, we drilled a well called Fangtooth that was optimally located at 18,000 feet and we found material oil deposits that, in and of itself, could underpin another FPSO and it is very high-quality oil.”

Guyana on track to become second largest deepwater producer in the world, says Rystad Energy | OilNOW

He added, “Now that we have correlated the wells that we are drilling for, not only at 15,000 but 18,000 feet, we are starting to find other attractive deep prospects so there is a lot of potential in the deep for either tiebacks into the 15,000 feet and to an FPSO or to be a standalone project. So clearly, we are still in the early innings.”

The Fangtooth well was one of the first two discoveries made in the Stabroek Block earlier this year. The well encountered approximately 164 feet (50 meters) of high-quality oil-bearing sandstone reservoirs. It was drilled in 6,030 feet (1,838 meters) of water and is located approximately 11 miles (18 kilometers) northwest of the Liza field.

In an interview with OilNOW, Schreiner Parker, Rystad Energy’s Vice President for Latin America and the Caribbean, said the Norway-based independent energy research and business intelligence company estimates that Fangtooth holds approximately 230 million barrels of oil equivalent.

Guyana scores big again as Exxon hits two more discoveries | OilNOW

The Stabroek block is 6.6 million acres (26,800 square kilometers). ExxonMobil affiliate Esso Exploration and Production Guyana Limited is operator and holds 45% interest. Hess Guyana Exploration Ltd. holds 30% interest and CNOOC Petroleum Guyana Limited holds 25% interest.

Demerara_Guy

Production from first three Guyana projects could hit 624,000 bpd

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The hull for the Guyana-bound Prosperity FPSO, under construction by SBM Offshore.

ExxonMobil, operator of Guyana’s Stabroek Block, is well positioned to optimise its offshore projects, thereby delivering hundreds of millions in additional annual revenues. Liza Phase 2 and Payara, ExxonMobil’s second and third Stabroek Block projects, each have the capacity to be debottlenecked by 10%.

Chief Executive Officer of Hess Corporation, John Hess recently stated this during Bernstein’s 38th Annual Strategic Decisions Conference in New York.

Debottlenecking is a process that provides for adjustments to an operation’s physical infrastructure to increase its efficiency.

Both the Liza Phase Two and Payara projects have nameplate oil production capacity of 220,000 barrels per day (bpd). Debottlenecking of 10% would add about 22,000 extra bpd to each project. Collectively, this amounts to 44,000 bpd in debottlenecked capacity.

ExxonMobil recently successfully undertook debottlenecking at the Liza Phase 1 project which had started out with nameplate capacity of 120,000 barrels per day. It now has oil production capacity of around 140,000 barrels per day – about 16% higher.

Exxon hikes capacity at Liza Destiny, schedules Payara for early startup | OilNOW

Debottlenecking of all three projects would therefore collectively add about 64,000 bpd to production offshore Guyana.

So, while production for these projects, based on combined nameplates, amounts to 560,000 barrels per day, debottlenecking would take that number to 624,000 bpd.

The value of debottlenecking is significant. With the example of Liza Phase 1, 20,000 extra bpd results in US$30 million in additional revenues in the duration of one month. With the price of oil sustained over US$100 a barrel over the last three months, this means that 20,000 extra bpd resulted in more than US$60 million in additional revenues for the month of May alone. With all three projects debottlenecked, that number would be somewhere over US$180 million in one month.

Guyana not the only region with aggressive oil agenda | OilNOW

The government has urged the Stabroek Block partners to tailor their operations to be consistent with its goal of aggressively producing oil to ensure Guyana benefits from its petroleum resources as the world transitions.

In addition to Liza Phases 1 and 2, and Payara, ExxonMobil has received approval for the Yellowtail project, on track for first oil in 2025. It also plans to move forward with the proposed Uaru development, which it could startup as early as 2026, pending government approval.

ExxonMobil intends to have six FPSOs operating offshore by 2027, with oil production totaling 1.2 million barrels per day. The partners see potential for 10 floaters to develop the discovered resource at the Stabroek Block.

Demerara_Guy

Exxon unrivalled in the deep; developing Guyana oil fields at record pace

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The SBM Offshore built and operated Liza Destiny FPSO offshore Guyana.

With four sanctioned projects in Guyana since the first oil discovery in 2015, of which two are currently in production at industry-leading timelines, ExxonMobil has proven itself “an unmatched project manager of deepwater projects.”

This point was recently made by Chief Executive Officer of Hess Corporation, John Hess. The company is a 30% stakeholder in the Stabroek Block where ExxonMobil Guyana is operator with 45% interest. CNOOC is the third co-venturer in the block with 25% interest.

Hess was keen to note during the Bernstein’s 38th Annual Strategic Decisions Conference that Liza Phase 1 which utilises the Liza Destiny floating, production, storage and offloading (FPSO) vessel started out at a nameplate capacity of 120,000 barrels of oil per day. From the time oil was struck in 2015, the Liza Destiny was on stream and producing oil in four years. Exxon has since debottlenecked the project to produce 140,000 bpd.

Exxon hikes capacity at Liza Destiny, schedules Payara for early startup | OilNOW

Liza Phase 2, Hess said, is using the Liza Unity FPSO and has oil production capacity of 220,000 bpd. “It is ramping up to that number as we speak.”

The third ship for the Payara development, Prosperity, which was supposed to come on stream in 2024, will now come online in the fourth quarter of 2023. The Hess CEO said the second and third ships have the ability to be debottlenecked by 10%, just like Liza Destiny.

As for Yellowtail which was approved on April 1, 2022, Hess said the hull is now being built and it is on stream for 2025 start-up. The Hess boss said, “This is the largest ship we have built to date, and it will produce up to 250,000 bpd with the opportunity to go up and it will cost US$10 billion. We will be developing 900 million barrels of oil resource with this ship.”

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

He noted that the breakevens for these ships are between US$25 and US$35 Brent, while Yellowtail itself “is the best return investment in the industry to date.” Thanks to Exxon’s prudent management, the projects are insulated at this time from cost inflation arising from the effects of the COVID-19 pandemic and the war in Russia.

The creditable cost-efficient approach of the operator will also allow Hess to realise income from the Guyana projects, specifically Liza 1 and Liza 2, totaling US$2.6 billion for 2022.

In this regard, Hess shared, “We have three liftings in Guyana in the first quarter, which is a million barrels per shipment. The second quarter is about 7; the third and fourth quarters will total 8 liftings each. We have over a US$100-barrel Brent price. We are therefore going from US$300 million of incremental cash flow from Guyana to US$700 million in the second quarter, then US$800 million in the third, and US$800 million in the fourth. So, that is a rate of change just for this year.”

He said this rate of change continues to compound at US$1 billion a year in incremental cash flow as each ship comes on. Because of Exxon’s approach, Hess said in no uncertain terms that Guyana’s offshore projects make for “an incredible cash flow story and it is unequaled in the business.”

Demerara_Guy

‘Fully integrated fiscal model’ confirms billions projected in annual oil revenues for Guyana from 2025

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A section of Guyana's Atlantic coastline.

Guyana’s Vice President Dr. Bharrat Jagdeo recently told reporters that Guyana expects to bring in US$2 billion per annum in oil revenue from 2025, based on a US$50 per barrel price of crude. He said if that calculation is done using US$100 per barrel, the annual revenue share jumps to US$4 billion.

The Vice President explained that these calculations consider sanctioned projects alone at the ExxonMobil-operated Stabroek Block: Liza Phases 1 and 2, Payara and Yellowtail. Combined, these projects would be producing about 830,000 barrels per day at peak.

Guyana’s oil earnings per capita by 2025 could exceed Qatar, Kuwait and Norway – Expert | OilNOW

From this output, Guyana would receive about 12.5%. Dr. Jagdeo explained that this calculation is based on the fiscal terms in the Stabroek block production sharing agreement (PSA). The consortium’s invested costs are recovered up to a ceiling of 75%. The remaining 25% is split equally between the government and the consortium. In addition to this 12.5% government take, the consortium would pay Guyana 2% royalty, amounting to total government take of 14.5%. After the consortium’s costs are substantially recovered, Guyana’s take would increase.

“Guyana has a fully integrated fiscal and economic model that allows for the government to analyse all the producing oil fields,” the Ministry of Natural Resources has said. And this model includes options for the future production of oil and gas.

‘Critics who say we will get nothing from oil sector reckless, uninformed’ – Bharrat

The Ministry said the tools at its disposal allow the government to have a good understanding of the forecasted costs, revenues, and Net Cash Flow (NCF) from the sector for both the government take and contractors’ take.

This model allowed the government to calculate, for example, that in 2022, government revenues into the Natural Resource Fund would amount to US$957.6 million. Given the impact on oil prices of Russia’s invasion of Ukraine, Guyana is now set to gain a lot more than that.

Guyana also projected its expected revenues up to 2025 would be approximately US$5.84 billion, and intends to spend about 60% (approximately US$3.45 billion) on projects to develop the country’s social and physical infrastructure.

Demerara_Guy

World Bank approves US$44M to boost human capital in Guyana as demand for skilled labour increases

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The World Bank’s latest economic assessment has found that the new oil producing country of Guyana is experiencing an increasingly serious shortfall in its labour market, as training offerings have not adapted to the emerging needs of the economy.

The financial institution reasoned that on the one hand, the country has one of the highest emigration rates in the world. It is estimated that 550,000 Guyana nationals reside abroad, many of whom are considered highly skilled. At the same time, the bank said the rapid development of the oil and gas industry has severely increased the demand for skilled workers and technicians, with an estimated 160,000 additional workers needed for Guyana to realise its full growth potential.

While there is no recent comprehensive survey of skills in short supply in Guyana, the bank said it has taken note of the fact that representatives for the oil and gas industry have repeatedly mentioned that the industry suffers from a crucial shortage of skills required.

Guyana’s oil-driven development boom creating huge demand for labour | OilNOW

In light of the foregoing grounds, the World Bank said on Friday that it feels justified in approving US$44M to fund the Guyana Strengthening Human Capital through Education Project. The project will focus on expanding access to quality education at the secondary level, as well as improving technical and vocational training (TVET) to meet the needs of the labour market. The funding also aims to prepare Guyanese citizens to excel in emerging sectors of the economy including climate-resilient agriculture, low-carbon technology, and digital development.

The proposed project would support the Government’s secondary education reform agenda as well as different trajectories and modalities of obtaining an education by incorporating interventions addressing constraints related to access, quality, and relevance. This is expected to help youth in Guyana reach their full potential and participate productively in the economy.

Activities under the project are expected to benefit at least 60,744 students and 2,128 teachers and principals at the secondary level. At the TVET level, a minimum of 600 students and 140 secondary and post-secondary TVET trainers will benefit from professional development activities.

Guyana could hit full employment capacity soon; gov’t may consider active immigration policy – VP | OilNOW

On Friday, Diletta Doretti, World Bank Resident Representative for Guyana and Suriname, said the project complements other education initiatives that the World Bank is supporting, as the government is working to ensure that more people can acquire the needed skills to benefit from the ongoing economic transformation which will span into 2050.

Due to the recent oil and gas discoveries, the World Bank was keen to note that Guyana stands at the threshold of a new economic era. It stressed that the discovery of vast offshore oil and gas reserves is poised to fundamentally transform the structure of the Guyanese economy while generating an influx of fiscal revenue.

It noted that the discovery opens up employment opportunities for both specialised technicians and semi-skilled workers in the associated supply chains, hence the importance and timeliness of the project.

However, for increased income to lead to meaningful gains for the population, it cautioned that Guyana must consistently seek to improve its human capital and reduce poverty levels while maintaining macroeconomic stability and environmental sustainability.

Demerara_Guy

Incredible growth rate makes Guyana number one investment destination in the region – Go-Invest CEO

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Chief Executive Officer of the Guyana Office for Investment, Dr. Peter Ramsaroop.

When the World Bank released its latest global economic forecast, the President of the international institution David Malpass wrote that for many countries, “recession will be hard to avoid.”

In that same report, the World Bank projected that Guyana is anticipated to lead Latin America and the Caribbean with the highest growth in 2022. In fact, when it comes to this country, the World Bank said the oil-producing nation remains on track for a 47.9% growth rate followed by 34.3% the following year – still representing the highest growth forecast for the region. Based on this remarkable growth forecast, Chief Executive Officer of the Guyana Office for Investment (GO-Invest), Dr. Peter Ramsaroop says the South American nation should now be considered as the premier investment destination in the region.

Fitch ups Guyana’s growth forecast as oil prices remain high | OilNOW

“If you are an investor in the developed world and you start paying attention to the depression you’ll ask, ‘Where do I put my next set of money?’ Then Guyana becomes that next important destination. We are going to keep expanding… The future for Guyana is well-defined for the next few years,” Dr. Ramsaroop relayed when he delivered an address at the launch of the Georgetown Chamber of Commerce and Industry’s Investment Portal last Thursday.

The “well-defined” agenda that the Chief Investment Officer speaks to is one that the Irfaan Ali-led administration has been assiduously pushing since assuming office in August 2020. Along with ensuring that Guyana’s oil and gas industry is prudently managed for the benefit of Guyanese, the government has also been pushing investment in other key areas such as agriculture, energy, forestry and manufacturing – just to name a few.

Guyana oil bounty can fuel massive economic diversification, says US Ambassador | OilNOW

In addition to being a resource-rich country, the Chief Investment Officer outlined multi-sectoral opportunities, fiscal investment and low operation costs as just some of the perks of making Guyana an investors’ destination. Now that the Chamber has launched its Investment Portal, this system now revolutionises, simplifies and expedites how investors and local businesses can partner to build relations.

“It is an exciting time, and this portal makes my job much easier… An investor or a business in Guyana can actually start studying what they want to expand in, and investors on the outside will be looking at how they can get in,” Dr. Ramsaroop stated.

He said with the local businesses putting this information out into the portal, it makes it so much easier to push for consortiums, joint ventures and various partnerships.

“This portal will support the government’s framework in attracting foreign investors,” de declared.

Demerara_Guy

look at the evilness on peter ramsaroop's face, PPP mafia man, was sitting behind Charandaas to make sure he voted as they ordered him to, then he escorted Charan out and scuttled him out of the country before PNC killed him

IA

Guyana delivered largest oil and gas discovery in 20 years, more to come – Hess

By OilNOW 0 -- Source -- OilNOW

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The drillship Noble Bob Douglas.

The nearly 11 billion barrels of oil equivalent found so far at the Stabroek Block offshore Guyana may just be a scratch on the surface of what is emerging as one of South America’s most prolific oil and gas basins.

Chief Executive Officer of Hess Corporation, John Hess, said there is so much more discovery potential in the Stabroek Block that he considers the consortium to still be in the early innings of their exploration operations.

Exxon eyes bigger production facilities, extending current projects – Darren Woods

“We have plenty to say grace over and be thankful for,” Hess stated.

He made the comments earlier this month during Bernstein’s 38th Annual Strategic Decisions Conference in New York.

Hess is a 30% partner in the block, alongside CNOOC (25%) and ExxonMobil, the operator (45%).

“We’re already discovered 11 billion barrels of oil equivalent,” Hess said. “We think there are multi billion barrels remaining on top of it. So, we still think we’re in the early innings of this exploration opportunity… the largest oil and gas discovery in the last 20 years.”

Hess reminded that Senior Vice President at ExxonMobil Corporation, Neil Chapman said during an Exxon investor day event that the potential in the Stabroek Block could see the resource size doubling.

He went on to explain that most of the oil so far found has been at 15,000 feet in depth, in the upper Campanian. Hess said what the partners are seeing now is that there are similar sand channels at 18,000 feet which are starting to trap the oil that is also being trapped at 15,000 feet.

Big volumes at 18,000 ft could see standalone FPSO for new Stabroek Block development

“Now that we’ve correlated the wells that we’re drilling for not only 15000 feet but 18000 feet and correlated it to the well logs that we have, we’re starting to find other attractive deep prospects,” the CEO told the conference.

He said with this comes a lot of potential in the deep for either tiebacks to discoveries at 15,000 feet into a floating production, storage, and offloading (FPSO) vessel, or for standalone projects.

The latter was demonstrated with the Fangtooth discovery which ExxonMobil made earlier this year. Hess said Fangtooth was optimally located at 18,000 feet with material deposits that could underpin another FPSO with high quality oil.

ExxonMobil has thus far made over 30 discoveries at the Stabroek block and plans many more exploration wells there. It also operates the Kaieteur and Canje blocks, where it plans to soon embark on a 12-well exploration campaign at each acreage.

Demerara_Guy

Exxon says Guyana will not be saddled with decommissioning costs for Stabroek Block projects

By OilNOW 0  -- OilNOW Source -- https://oilnow.gy/featured/exx...roek-block-projects/

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The Normand Installer is pictured at the Stabroek Block offshore Guyana undertaking installation of suction piles and mooring lines for the Liza Phase 2 Development.

ExxonMobil affiliate, Esso Exploration and Production Guyana Limited (EEPGL) is making it clear that Guyana will not be left to handle the decommissioning costs associated with the multibillion-dollar Stabroek Block projects. Decommissioning encompasses the safe dismantling of the project infrastructure at the end of the development’s life cycle.

The assurance was provided on Wednesday by EEPGL’s Vice President and Business Services Manager, Phillip Rietema.

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Phillip Rietema

“Decommissioning costs are a very important aspect of our business… They take place 20-30 years from now, so it’s important that we plan for those under the accounting rules. Each year we have to put aside a small amount as we build up to that future value,” he said.

He pointed out that the company estimates what the value will be in 20 or 30-years’ time, using the best information available, and this in turn is reflected in its financial statements.

Exxon finally hits pay; records first profit in Guyana after 23 years

“ExxonMobil and our co-venturers are responsible for those decommissioning costs, and it is important that over time we put the structures in place to ensure that we can pay for those costs,” Rietema stated.

He further pointed out that a Decommissioning Security Agreement is being drafted which will set the principles by which the Stabroek Block co-venturers will set aside the funds to pay for the decommissioning expenditures and to ensure that all the funds are in place to pay for the costs when they are incurred a couple decades from now.

When asked who would carry the cost if unforeseen circumstances led to a halt in operations, thereby requiring decommissioning activities to be undertaken now, Rietema made it clear that Exxon would ultimately be responsible.

Demerara_Guy

“No liability, no debt to Guyana” – Exxon assures

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Phillip Rietema - Vice President and Business Service Manager at ExxonMobil Guyana.

As at year-end 2021, ExxonMobil Guyana’s assets totaled $1.3 trillion, an increase of 30 percent over the previous year which the company says mostly reflects substantial incremental investments in the Stabroek Block.

Significant sums have been invested by Exxon and its co-venturers at the Stabroek Block over the years, representing exploration and development costs for major projects, two of which are already producing and two more under construction. Several more projects are planned in the coming years which are expected to push Guyana’s total output above one million barrels of oil per day.

Speaking to reporters on Wednesday, the company assured that Guyana is in no way liable for these significant investments, and essentially does not owe the company a cent.

Exxon says Guyana will not be saddled with decommissioning costs for Stabroek Block projects

“Now there is no responsibility to Guyana, the Government of Guyana for our investments,” Vice President and Business Service Manager, Phillip Rietema. “The investments are made by our investors in the projects, and it’s the projects themselves that need to pay back the investment.”

Under the Production Sharing Agreement the company has with Guyana, cost is recovered at a ceiling of 75 percent from oil produced and sold.

“If for some reason – and we think this is unlikely – but if for some reason the projects don’t pay back, there will be no liability, no debt to Guyana or the people of Guyana,” Rietema.

United States based analytics firm, Institute for Energy Economics and Financial Analysis (IEEFA), has been quoted in local media as saying each citizen in Guyana owes Exxon some GYD$9 million.

Guyana’s Vice President, Dr. Bharrat Jagdeo, at a recent press conference had also debunked this claim.

“The only debts that this country has to repay are debts contracted or guaranteed by the state, and I told you already that is only 16% of Gross Domestic Product (GDP). So, no debt contracted by Exxon or any of these companies are guaranteed, or we are party to. So, the citizens of this country do not have to pay,” Dr. Jagdeo had stated.

Demerara_Guy

Preparing Guyana for next stage of development calls for heavy spending – VP Jagdeo

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Dr. Bharrat Jagdeo, Vice President of Guyana.

The government of Guyana understands its responsibility to ensure that it does not manage the economy in a manner that will cause it to overheat. However, the government is also aware that it is important to prepare the nation for the next stage of development.

The need to find the delicate balance was recently explained by Vice President Dr. Bharrat Jagdeo.

At his most recent press conference, Dr. Jagdeo reminded that long before the release of recent reports which highlight the importance of avoiding the overheating of the economy, the government was cognizant of its responsibility.

He said, “we stated that we were concerned about two things, the Dutch Disease, that can harm countries like ours that have windfall: and, overheating of the economy. They are separate but people confuse them.”

Overheating economy with oil money a fair concern; but we can manage it – Vice President | OilNOW

The Vice President went on to explain that the Dutch disease has to do with the change in relative prices that structurally makes non-oil or traditional sectors uncompetitive. He said that the government’s focus on diversification, building the non-oil economy, investing in human capability that can help avoid the Dutch disease, are all testimony to the fact that it knows what it is doing in this regard.

On the overheating side of things, Dr. Jagdeo said that the government is aware of all the great global inflationary pressures, “the view is that if you spend too much you also strengthen those inflationary pressures, and it affects poor people.” He said with that in mind, the government is watching its spending. However, while watching its spending, the government cannot neglect key responsibilities.

Guyana planning “paced ramp-up in spending” for oil revenues | OilNOW

Dr. Jagdeo said, “There is a big demand to spend on everything, but we have to also keep the balance. We are trying to keep the economy from overheating but at the same time building the things that would be crucial to the next stage of development. The power plants, the highways, schools, hospitals, sea defence, drainage and irrigation systems, the farm-to-market roads, the service industry, those are crucial investments you have to make which cannot wait forever.”

The Vice President said that all those investments are necessary in preparation for growth and expansion “when the oil goes.”

Guyana expects significant inflows of oil revenues over the next few years. This comes with the ramp-up in oil production in the offshore Stabroek Block, where ExxonMobil has discovered nearly 11 billion oil-equivalent barrels.

Demerara_Guy

The VP commenting as if Guyana controls the oil economy. Guyana only gets what is offered to them. An overheating economy is one that has activities, Guyana do not have an economy, if it has there would employment galore. An economy depending on hotels, malls and housing is depending on remittances. I have not read where some oil money was used for development as yet.

A