Guyanese Tanker Workers Undergo Safety Training

(Stabroek News, 18.Jul.2018) – Approximately 35 Guyanese Pritchard-Gordon Tankers (PGT) workers were educated on safety practices as Shell partnered with the company to host a one-day workshop yesterday.

The workshop was hosted at the Pegasus Hotel, where the workers were taken through the rounds by PGT’s Nick Griffith.

“My main focus for this seminar is to improve safety on board of our ships; not that we have a poor safety record but there are always ways of improving safety on board and it has been proven that little incidents, little triggers can show that there’s underperformance and if we have a lot of small and minor incidents then it’s possible that they can result in larger accidents which we definitely want to avoid,” Griffith told Stabroek News.

He stressed that they have not had any serious incidents in a long time but there have been recurrences of minor ones.

According to the company’s website, PGT “specialises in ocean transportation of crude oil and refined petroleum products in environmentally sensitive areas, using purpose built, shallow draft, double hull tankers.”

Griffith said that he hopes that the workers will be even more equipped than they already are to take the necessary safety precautions when they are working and to ensure that they spread the word to the other workers for a more holistic improvement.

He explained that the main topic of yesterday’s seminar was mooring, which he said is a quite dangerous operation.

“You’re using a lot of ropes under pressure and strain and those ropes, if used incorrectly, can break and the rope will snap and it will whiplash and if that rope hits a person’s leg they could lose it. If it hits them around a vital organ they can ultimately die or fall over and bang their head and it has been seen in the past that mooring is a very dangerous operation,” he said.

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FDI in LAC Region Falls for Third Straight Year

(Energy Analytics Institute, Ian Silverman, 12.Jul.2018) – Foreign Direct Investment (FDI) in Latin America and the Caribbean fell for a third straight year in 2017, reported the Economic Commission for Latin America and the Caribbean or CEPAL by its Spanish acronym.

The details were revealed in CEPAL’s annual report titled “FDI in Latin America and the Caribbean 2018.”

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ExxonMobil says Not Funding Political Party in Guyana

(Stabroek News, Marcelle Thomas, 8.Jul.2018) – Facing questions from a parliamentary committee, ExxonMobil yesterday denied that it was funding any political party or political initiatives in Guyana.

A meeting between the Parliamentary Sectoral Committee on Natural Resources and the US oil giant became testy when allegations of possible funding of political initiatives were put to the company by opposition members.

In the Parliament Chamber, ExxonMobil quickly shot down suggestions that it was funding any initiative of the A Partnership for National Unity and Alliance for Change (APNU+AFC) coalition, saying that the company was not politically aligned.

Opposition members of the committee also raised questions about ExxonMobil’s funding of international environmental body, Conservation International (CI), stating that this was a clear conflict of interest for the latter.

Last evening, in response to questions from Stabroek News, Conservation International rejected the assertions by the parliamentary committee members, stating that notwithstanding the funding, the organisation will remain objective and impartial.

“As a science-based organization with over two decades of conservation success in Guyana, Conservation International is in a unique position to help Guyana achieve its green development goals. We carefully deliberated and determined that this effort will achieve its goals while also maintaining our independence and objectivity,” Global representative Salma Balramy said in response to the questions from this newspaper.

“We’ve worked with Guyana’s government and people in over 50 communities to help protect nearly three million acres of indigenous lands while improving livelihoods. As long-time partners of Guyana’s commitment to its people and ecosystems, Conservation International is confident this is a necessary step at this critical time in Guyana’s development,” she added.

Government representative on the committee Ronald Bulkan also rebuffed the line of questioning by the opposition MPs, lamenting that it was “a shame” that the meeting had descended to allegations against the company and CI, and members did not use the opportunity to grill the company on how Guyana’s citizenry were benefiting from its presence and works here.

“Sorry ma’am, I have to stop you. ExxonMobil is not involved with politics in Guyana. We don’t choose sides, we’re apolitical. We’re not funding any political party, any political side, any political initiatives, none, just full stop,” ExxonMobil’s Country Director Rod Henson said as he interrupted People’s Progressive Party/Civic (PPP/C) member Pauline Sukhai during her questioning about political funding here by the company.

ExxonMobil, according to a letter dispatched to it by the committee, was to “provide an update” on the “company’s operations and answer questions of concern to members.”

But while Henson had replied saying that he “welcomed the opportunity…to provide an update on EEPGL’s (ExxonMobil’s subsidiary) operations,” he explained yesterday that the communication was bungled as he believed that he would only be updating on the local content aspect of EEPGL’s operations and thus only came prepared to deal with that subject.

Nonetheless, he said that he would answer questions outside of his prepared subject as best as he could but provided no answers on who initiated the controversial US$18 million signing bonus between EEPGL and the government or what were short and long-term cost projections of work by his company.

Present at yesterday’s meeting were committee Chairman Odinga Lumumba and fellow opposition PPP/C MPs Neil Kumar, Pauline Sukhai and Yvonne Pearson. For the government side, Audwin Rutherford, Jermaine Figueira and Bulkan were present. The Committee was informed that Minister of Finance Winston Jordan was out of the country and Minister of State Joseph Harmon was meeting with residents in the flooded areas of Region Nine.

Tempering expectations

Henson made a presentation on general operations of the company, with a focus on local content, where he echoed earlier positions of tempering expectations that the footprint for many direct related oil and gas jobs would be met. He said again that there is only room for a few hundred direct jobs.

Highlights and highpoints were given as Henson also declared that for the first quarter of this year the company paid out US$21 million for products and services from which 227 Guyanese companies benefitted.

Then came the question and answer segment of the hearing, which focused heavily on local content and the grant given to CI.

Sukhai said that she was concerned about word in the public that the company was helping to fund government’s Green State Development Strategy (GSDS) though its partnership with CI.

Earlier this week, the philanthropic arm of ExxonMobil, the ExxonMobil Foundation, announced US$10 million ($2 billion) in funding for CI and the University of Guyana to train Guyanese for sustainable job openings and to expand community-supported conservation.

A statement from the Foundation had said that the investment is also aimed at supporting Guyana’s Green State Development Plan, the country’s 15-year development plan that, among other things, intends to diversify Guyana’s economy and balance economic growth with sustainable management and conservation of the country’s ecosystems.

This was pounced upon by Sukhai.

“The Green State Development Strategy is not in its totality or comprehensively documented and consulted upon as yet. In fact, that strategy has not even reached the Parliament for its debate or for its approval or to be laid as government’s main focal point strategy. There is a line of thought out in the public that ExxonMobil is actually funding a political initiative that is not yet established and approved by the National Assembly and that is, as I mentioned before, the Green State Development Strategy,” Sukhai said before she was quickly stopped by Henson from going further.

“I would like to say that there are concerns out there, which is speaking to the fact –two lines of thought and two lines of criticism-and that is CI is an international NGO and CI is considered to be an international watchdog on environment, nature and all the things that go with conservation, preservation of our environment and so on. Don’t you think that CI being a grantee of ten million US dollars is actually in a conflict of interest because they should be monitoring?” she nevertheless pressed.

She said that that while Henson may want to stop her questions, answers were needed as, “we have to stop the concern in the public domain, because that is what is circulating and that’s why I chose to raise it here with you, so you can have a chance to clarify.”

A seemingly shocked and perturbed Henson replied, “I can’t control every individual’s thoughts and opinions, but I appreciate your opportunity to allow me to say that’s complete hogwash.”

Henson would later be asked by the Chairman to withdraw the “hogwash” remark and he did but he stressed that he still wanted to dissuade any views that his company was political.

Further probing came from Chairman Lumumba, who wanted to know if when ExxonMobil signed the agreement with CI, whether “there was government input or government approval” and why the company does not see its funding as a conflict given CI’s watchdog role here.

“This is our ExxonMobil initiative. This was not directed by the government. This is a good thing. ExxonMobil partners with this organisation around the world. It is not just Conservation International, this is an excellent partnership with the University of Guyana,” Henson said.

“Chair, I think Conservation International would disagree with you and I disagree with you, respectfully. I don’t think this impedes Conservation International’s role in anyway in the country. We made the government aware but again this is an ExxonMobil initiative, something we chose to do,” he added.

Sugar

Questions were also posited by Sukhai and Kumar on if ExxonMobil had a role in the recent announcement that 100 sugar workers were getting skills training though a programme with the Ministry of Natural Resources.

“Is Exxon funding any of that training?” Sukhai asked, to which Henson replied, “No, we are not funding that.”

Questions were asked about the 227 companies which ExxonMobil said benefited in the first quarter and the Chairman asked for the list and services provided to be made available to the Committee so that it could be analysed to determine if the country was getting value for money. He pointed out also that since the list was publicly released there had been many criticisms and questions linger on if the list met the definition of what local content should be.

A puzzled Henson said that he had given the list to government and questioned if the bipartisan committee was not part of government.  “Aren’t you the government?” Henson asked, to which Lumumba replied “No, we are the opposition.” The ExxonMobil head said that he was prepared to go over the list with the committee if it desired.

Kumar also spoke of sugar workers being “on the breadline” and of “closed sugar estates” and wanted to also know if the company was helping government with legislation crafting as it pertained to local content. Henson said that the Guyana was a sovereign country and the company had no role in how its government spends money and could not be a part of law crafting.

Bulkan zoomed in on the opposition’s posture and told the Chairman that it was regrettable that the meeting yesterday seemed to stray from the focus of ExxonMobil’s operations.

“I would like to take strong objection to the [statement that the] government in one instance has placed persons on the breadline and that the government has closed sugar estates. I think we are in danger of being sidetracked from the purpose of this meeting,” Bulkan said.

“We have also heard, and I think it is it is regrettable, that the GSDS, as initiated by this administration, is political. It is not a political initiative, it is a government initiative and I think it is unfair for us to come and say here that it is not fully developed and to suggest that the activities of the company’s  funding to CI, to suggest it has an impact on the GSDS. I think it is unhelpful…,” he added.

Following the meeting, Henson told reporters that it was his error about the meeting’s overall focus as he came only to deal with local content. He said he welcomed the opportunity to talk and would take up another invite if extended.

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Could Guyana’s Oil Fortunes Curse Country?

(Energy Analytics Institute, Pietro D. Pitts, 8.Jul.2018) – Recent success in Guyana’s oil sector could be a wolf in sheep’s clothing.

Guyana doesn’t yet produce oil but in coming years its oil output is expected to surpass that of Peru and Trinidad and Tobago and could approach that of Ecuador, one of two lone OPEC producing countries in South America.

Having the world’s largest oil reserves, the first LNG export terminal in the Americas, or large gas reserves doesn’t mean all a country’s political, economic and social problems will be solved. Just ask Venezuela, Trinidad and Tobago, and Bolivia, respectively. Case studies of these three countries have shown that not just countries in Africa, such as Nigeria, are vulnerable to the Dutch Disease even in the 21st Century.

A look just at Guyana’s poor Corruption Perceptions Index ranking from Transparency International, much lower than the average for the Americas indicates the government is failing in efforts to tackle corruption.

It is hardly likely that Guyana’s faith will change by 2020 when the oil starts flowing and revenues start to climb. What will happen then is almost predictable unless a miracle happens between now and then.

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Guyana Pre-2020 Investment Boom

(Energy Analytics Institute, Piero Stewart, 6.Jul.2018) – Oil production will begin in 2020, and the boom in investment beforehand will continue to drive activity, writes Caribbean Economist Marla Dukharan in her “Caribbean Monthly Economic Report.”

Guyana, located in the northeastern region of South America, is readying for an oil boom to come soon from commercialization of recent oil discoveries. Exxon Mobil and partners have to date found recoverable resources estimated at more than 3.2 billion oil-equivalent barrels on the Stabroek Block offshore Guyana. Three of ExxonMobil’s developments will produce more than 500,000 barrels per day, and initial oil flows are slated for 2020.

The economist also said Guyana’s reserves, which amounted to $507 million in April 2018, where down $77 million or 13% compared to December 2017.

“The IMF revised its growth estimate for 2017 down to 2.1% from 3.5%. Growth is then expected to ramp up to 3.5% in 2018, 3.7% in 2019, and with the impact of oil production, 27.8% by 2023. Nope this is not a typo,” wrote Dukharan in her July report.

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National Oil Co for Guyana Would Be Disaster

(Stabroek News, 3.Jun.2018) – The creation of a National Oil Company (NOC) will be “a disaster” for this country warns former Government Advisor on Petroleum, Dr. Jan Mangal who says that Guyana should learn from the experiences of sister Caribbean countries, Trinidad and Tobago and Jamaica.

However, the government says that it has been advised by a number of international organizations, including Chatham House of the UK, that a NOC would be beneficial to this country.

“Here we go again with national oil companies in the Caribbean. Both Petrotrin (Trinidad) and Petrojam (Jamaica) are in the news because of corruption,” Mangal said as he urged Guyanese to not support a call for the establishment of one here.

“Guyanese: Please remember these two nations have much larger and better run economies than ours, and much stronger institutions. Hence imagine what will happen in Guyana, with our weaker capacity, if elements in our government and their private sector cohorts are allowed to create a national oil company with access to our oil. It will be a disaster,” he added, pointing to recent scandals in Jamaica and neighbouring Trinidad and Tobago.

Recently, Jamaica’s Petrojam, which supplies a range of domestic, transportation and industrial petroleum products in that country, was hit with a number of allegations of corruption and victimisation. It saw questions surrounding the use of public funds snowballing in recent weeks during which there has been an outcry for Prime Minister Andrew Holness to act, the Jamaica Gleaner newspaper has reported.

Over in Trinidad and Tobago, a forensic audit report by the Canada-based Kroll Consulting Canada found that the state-owned Petrotrin paid a company, A&V, for oil produced between January and June of 2017, which it did not receive. In September, Petrotrin announced that it had launched an investigation into the reports of inconsistencies in the volumes reported from its exploration and production fields.

Mangal, whose contract as an Advisor to President David Granger ended in March of this year, has said that he will, “Outline the mechanism used by some oil companies and their local friends (in government and in the private sector) to defraud needy people in countries around the world, like in Guyana.”

But government says that although the establishment of a NOC is not in its immediate plans, there will be one formed sometime in the future and that it has been advised by several international organizations that it was the way to go.

“Government has been advised by several international organizations, foremost amongst which is Chatham House though Dr. Valerie Marcel, that the NOC is the direction we would be headed. We believe we will get there one day but it is not a matter that is on our list of immediate,” Minister of Natural Resources Raphael Trotman told Stabroek News when contacted.

Further, he added, “The rationale for a NOC is always that countries get a greater share of the revenue and at the same time gain valuable experience. We are keeping the idea alive but there is no discussion when.”

Other experts have also said that they believe that an NOC, if properly equipped with needed regulations and insulated from politics, would serve beneficially to the people of Guyana.

“State controlled oil major, is an absolute must! And the sooner, the better. NOCs control approximately 75% of the world’s oil market and 90% of the world’s oil reserves, evidence that having NOCs have become a normalcy. The advantages of an NOC are unlimited.  In recent years, NOCs have developed global reach and influence,” a former United States Department of Energy Manager, Dr. Vincent Adams had told this newspaper, in an interview earlier this year.

“With the proper contract arrangement with the NOC representing  the Government’s interest, the arrangement allows for personnel from the NOC working alongside their IOC counterparts and `learning by doing’, ultimately acquiring the ability to operate both within its own jurisdiction and abroad; thus, bringing revenues back to their home countries,” he added.

Vehicle

Most significantly, Adams believes, is that NOCs provide a vehicle for state participation and the ability to drive greater local content and capacity building in terms of directing the purchase of local goods and services. “The lessons learned from bauxite was that we were not ready for nationalization, since we failed to build the capacity to manage on our own upon nationalization. An NOC will give us that capability and strengthen our position in negotiations,” he asserted.

Using his country’s experience as a model, former Minister of Energy of Trinidad and Tobago, Kevin Ramnarine had also this year advised on an NOC but stressed that it must be insulated from political interference.

“This company’s board and management must be insulated from politics as is the case with Statoil (Norway) because if it is not, you will get a call to hire somebody’s nephew,” Ramnarine said.

“I would recommend that whatever state companies you form, it doesn’t have to be all, put part of the equity on the stock exchange,” he added.

He pointed to Norway’s Statoil and Russia’s Gazprom among other companies saying that Guyana can earn needed revenue through the establishment of such companies.

Pointing to the detriment of a state company influenced by politicians, as witnessed in his home country, he emphasized that before such a decision be taken here the companies must be removed from politics. “There is also the whole issue of political influence in state enterprises in Trinidad. When we look at the Norwegian company Statoil, their Board of Directors are independent, and for example the workers of Statoil get to vote on who should be a director…you begin to dilute the political influence in the company,” he posited.

The former People’s Partnership Energy Minister recommended that Guyana set up three state-owned companies. “I am going to recommend that Guyana sets up three state enterprises, one to participate in the upstream, alongside with companies like Exxon, one to focus on infrastructural development and one to focus on marketing of products… our new production-sharing contracts in Trinidad allow the ministry to market their own hydrocarbons,” he said.

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Trinidad, Guyana and Suriname: Challenges

(AIPN, 27.Jun.2018) – Petroleum consultants and other energy sector experts will discuss the challenges and opportunities in Trinidad & Tobago, Guyana and Suriname during a discussion in London.

The select group will consist of Kevin Ramnarine, former Trinidad & Tobago Energy Minister (2014-15); Energy Strategic Advisor and Lecturer Carlos Bellorin, Principal Consultant, IHS Markit; Lecturer, Queen Mary University and SciencesPo Ekpen Omondude, former Senior Economic Adviser, The Commonwealth Secretariat (2008-2018); Director, Bargate Advisory Limited.

DISCUSSION BRIEF

With the discovery of Liza-1 within the Stabroek Block by ExxonMobil and its partners in 2015 – and after years of frustrating exploratory results – all eyes have been on the Southern Caribbean. After Liza-1 and the seven discoveries that followed (including Longtail-1 announced on 20 June 2018), the Guyana-Suriname Basin has all but confirmed its massive potential. On neighbouring sides of Guyana, the E&P outlook has also changed after 2015.

To the east in Trinidad & Tobago – one of the more mature producers in the region – successive governments have tried to bring the island’s hydrocarbons industry to the attention of investors with limited success. Without any significant recent discoveries, Trinidad & Tobago will need to improve its performance and hydrocarbons regime. This will be necessary to replace reserves and increase production if it is to maintain its gas-linked economy and leadership as a gas producer.

To the west lies Suriname. After recent wells have come up dry, it needs (at least) a commercial discovery to finally confirm its long-coveted potential. Venezuela also plays a pivotal role in regards these two, smaller, nations: an embattled Venezuela is currently engaged in a high-profile boundary dispute with Guyana and could enter into a strategic partnership with Trinidad & Tobago over two key gas fields.

During this session, we will touch on the most critical issues from these three countries, including comments on their legal-fiscal regimes and political risk while looking forward to their challenges and opportunities. We will offer an on-the-ground view of one the hottest new deepwater provinces in the world.

WHEN: Thursday, June 28, 2018 (5pm – 8:30pm Europe/London)
COORDINATOR: Akin Gump
VENUE: Bishops Square
WHERE: London E1 6EG United Kingdom

Registration will be from 5:00 – 5:30 p.m., followed by the presentations and Q&A until 7:00 p.m. A networking reception with drinks and canapes will follow from 7:00 – 8:30 p.m.

Online registration has been closed. On-site registration will be on a space available basis and is complimentary for all members and non-members. If you have any questions, please contact Carlos Bellorin at Carlos.Bellorin@ihsmarkit.com

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ExxonMobil, Partners Spent $24 Mln in Guyana

(Energy Analytics Institute, Piero Stewart, 22.Jun.2018) – US-based ExxonMobil Corporation and partners continue to invest in small-to-medium sized enterprises in Guyana.

Irving, Texas-based ExxonMobil and project partners spent $24 million with more than 300 local suppliers in 2017 and opened the Centre for Local Business Development in the capital city of Georgetown to promote the establishment and growth of small- and medium-sized local businesses, the oil giant announced in an official statement.

Guyanese businesses, contractors and employees continue to play an important role in ExxonMobil’s operations in the country. ExxonMobil’s priorities in Guyana are focused on enabling local workforce and supplier development and collaborating with government to support the growth and success of its economy, both in the energy and non-energy sectors.
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ExxonMobil Announces 8th Find Offshore Guyana

(Energy Analytics Institute, Piero Stewart, 20.Jun.2018) – Irving, Texas-based Exxon Mobil Corporation’s good luck continues in Guyana.

The oil giant announced it has made its eighth oil discovery offshore Guyana at the Longtail-1 well, creating the potential for additional resource development in the southeast area of the Stabroek Block, Exxon announced in an official statement.

ExxonMobil encountered approximately 256 feet (78 meters) of high-quality, oil-bearing sandstone reservoir. The well was safely drilled to 18,057 feet (5,504 meters) depth in 6,365 feet (1,940 meters) of water. The Stena Carron drillship commenced drilling on May 25, 2018.

“The Longtail discovery is in close proximity to the Turbot discovery southeast of the Liza field,” said ExxonMobil Exploration Company President Steve Greenlee, in the company statement. “Longtail drilling results are under evaluation. However, the combined estimated recoverable resources of Turbot and Longtail will exceed 500 million barrels of oil equivalent, and will contribute to the evaluation of development options in this eastern portion of the block.”

Second Exploration Vessel

ExxonMobil is currently making plans to add a second exploration vessel offshore Guyana in addition to the Stena Carron drillship, bringing its total number of drillships on the Stabroek Block to three. The new vessel will operate in parallel to the Stena Carron to explore the block’s numerous high-value prospects.

The Noble Bob Douglas is completing initial stages of development drilling for Liza Phase 1, for which ExxonMobil announced a funding decision in 2017. Phase 1 will consist of 17 wells connected to a floating production, storage and offloading (FPSO) vessel designed to produce up to 120,000 barrels per day (b/d) of oil. First oil is expected in early 2020. Phase 2 concepts are similar to Phase 1 and involve a second FPSO with production capacity of 220,000 b/d. A third development, Payara, is planned to follow Liza Phase 2, according to ExxonMobil

The Stabroek Block is 6.6 million acres (26,800 square kilometers). Partners in the Stabroek Block include ExxonMobil affiliate Esso Exploration and Production Guyana Limited (Operator, WI 45%. Hess Guyana Exploration Ltd. (WI 30%) and CNOOC Nexen Petroleum Guyana Limited (WI 25%).
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ExxonMobil Reconfirms March 2020 for First Guyana Oil

(Denis Chabrol, DemeraraWaves, 12.Jun.2018) – ExxonMobil on Tuesday reconfirmed that Guyana will pump up its first barrel of oil in March 2020, even as the Guyana government continued to fend off criticisms of the 2016 production sharing agreement.

Vice President of ExxonMobil Development Company, Lisa Walters said work was well advanced by several companies in Singapore, Brazil and the United States Gulf Coast to ensure that commercial oil production begins in less than two years. “We are on track for first oil in March of 2020,” she said. “In just a little over a year and a half, the Liza Destiny will deliver its first oil to its first tanker offshore,” she added.

ExxonMobil estimates that oil discoveries at Liza, Payara, Snoek and Turbot offshore Guyana total 3.2 billion barrels and would eventually lead to daily production of 500,000 barrels. ExxonMobil estimates that Liza Phase 1 will generate over US$7 billion in royalty and profit oil revenues for Guyana over the life of the project.

Walters said the drill-ship, Noble Bob Douglas, recently started drilling the production wells located at Liza more than 125 miles off the Demerara Coast. She said “all of the design work on the project is nearing completion” and “construction is well-underway worldwide” for the Floating Storage, Production, Storage and Offloading (FPSO) vessel named “Liza Destiny”. SBM Offshore has won the contract to construct that vessel, while TechnicFMC, and Saipem have been hired for sub-sea construction of the umbilical cords and flow-lines. Guyana Shorebase Inc was awarded the contract in June, 2017 for shore-base services and in August, 2017 the Noble Bob Douglas was hired for drilling services.

ExxonMobil’s Country Manager, Rod Henson also used the opportunity of the official start of the Liza Phase 1 Development Programme to show off that in the first quarter of 2018, over US$14 million were spent with Guyanese suppliers; together with its contractors ExxonMobil utilized 262 Guyanese registered suppliers, 227 of which are Guyanese owned.

Minister of Natural Resources, Raphael Trotman reiterated that the revised ExxonMobil Production Sharing Agreement has “the same or very similar contractual terms” as those Guyana has signed with other companies such as Anadarko Petroleum, Ratio, CGX, REPSOL, Ratio, Eco-Atlantic and Mid Atlantic.

“In that regard, they will enjoy the same rights and obligations as every other company that has been contracted by the government to explore and develop our hydrocarbons.

That they were the first to find a large deposit should no redefine their contractual terms or place them in any position less than that enjoyed prior to discovery. For government to do otherwise is not how responsible or how well-organised and governed States function,” she said.

The Minister of Natural Resources said the proceeds of Guyana’s oil production would be fairly shared among all Guyanese without discrimination as part of a process that would eventually lead to the removal of negative labels such as Third World, backwards, underdeveloped and developing from Guyana. “With the blessings that have been revealed, and are within our grasp, we purpose to develop a modern, peaceful and cohesive State-one in which every man, woman and child, without exception, reservation, and/or discrimination of any kind, is able to enjoy the full and equal benefits of the bounty we are about to be bestowed,” he said.
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ExxonMobil Advances Offshore Guyana Liza Development

(ExxonMobil, 12.Jun.2018) – The Liza Phase 1 development continues to rapidly progress, with the commencement of development drilling offshore Guyana, ExxonMobil said.

Development drilling began in May for the first of 17 wells planned for Phase 1, laying the foundation for production startup in 2020. The company and its co-venturers have so far discovered estimated recoverable resources of more than 3.2 billion oil-equivalent barrels on the Stabroek Block.

“The work our teams have done in Guyana is remarkable,” said Liam Mallon, president of ExxonMobil Development Company. “We are well on our way to producing oil less than five years after our first discovery, which is well ahead of the industry average for similar projects. The Liza development and future projects will provide significant economic benefits to Guyana.”

Liza Phase 1 is expected to generate over $7 billion in royalty and profit oil revenues for Guyana over the life of the project. Additional benefits will accrue from other development projects now being planned. Liza Phase 1 involves the conversion of an oil tanker into a floating, production, storage and offloading (FPSO) vessel named Liza Destiny, along with four undersea drill centers with 17 production wells. Construction of the FPSO and subsea equipment is under way in more than a dozen countries.

Liza Destiny will have a production capacity of 120,000 barrels of oil per day. A second FPSO with a capacity of 220,000 barrels per day is being planned as part of the Liza Phase 2 development, and a third is under consideration for the Payara development. Together, these three developments will produce more than 500,000 barrels of oil per day.

“Guyanese businesses, contractors and employees have been an essential element of our exploration, drilling and development progress,” Mallon said. “Our focus is on enabling local workforce and supplier development, and collaborating with the government to support the growth and success of Guyana’s new energy industry.”

About 50 percent of ExxonMobil’s employees, contractors and subcontractors are Guyanese, a number that will continue to grow as operations progress. ExxonMobil spent about $24 million with more than 300 local suppliers in 2017, and opened the Centre for Local Business Development in Georgetown, Guyana, to promote the establishment and growth of small- and medium-sized local businesses. The centre has enabled access to training and capacity-building support for more than 275 local businesses.

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

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Critchlow Labour College Working with T&T Cos

(Stabroek News, 8.Jun.2018) – Having long established itself as a significant contributor to tertiary education in Guyana, the Critchlow Labour College is seeking to embrace the demand for training in the various disciplines associated with the country’s emerging oil and gas industry to rebuild its reputation as a major contributor to education delivery in Guyana.

Principal of the College, Ivor English told Stabroek Business on Monday that the two-day preliminary Oil and Gas Course Seminar delivered late in May in collaboration with two Trinidad and Tobago companies Apollo Global Vision Ltd and Kaizen Environmental Services was intended to serve as an introduction to a wider ambition of creating a high-level Centre for Oil and Gas that will seek to offer courses that will equip graduates for rewarding jobs in the sector.

Towards this end the College has already signed a Memorandum of Understanding with Kaizen and Apollo under which the two specialist companies will be intimately involved in both the design and delivery of courses run by the local Centre for Oil and Gas.

English told Stabroek Business that the decision by the College to move in the direction of establishing an institution specializing in the training of Guyanese in oil and gas-related fields had to be seen within the context of the importance which the institution places on remaining relevant. Reminding of the period some years ago when the Critchlow Labour College’s certification in Industrial Relations was recognized as a vehicle for University of Guyana admission, English said that the MOU with the two Trinidad and Tobago companies was aimed at a “long-term relationship that would see the Centre for Oil and Gas transform into and Oil and Gas Academy located off the Critchlow campus. At that stage we will be taking our training in the various oil and gas-related disciplines to diploma and degree levels,” English told Stabroek Business.

At the same time English disclosed that the College intended to engage ExxonMobil and its various oil exploitation partners to discuss a role for the Academy in meeting some of the specialized needs associated with the oil and gas recovery programme. “We are in the process of opening communication with these entities with a view to assuring them that we have the skills to deliver their requirements,” English said.

Conceding that the decision to create an off-campus facility was informed by the reality of a lack of space on the Woolford Avenue campus to accommodate all of the materiel associated with the delivery of oil and gas programmes English said that in the short term the CLC will create the faculty space and administer the programmes for which it will receive a facilities fee.

Asserting that the growth of the College’s curriculum will have to take place against the backdrop of the modernization of the institution, English said that as funds are garnered from courses which are expected to become operational over time, “revenue will be set aside for physical upgrading, computerizing etc. Our focus is to create job readiness for oil and gas. In a way we are uniquely positioned to provide these services since we are already accommodating the operations of the MATPAL Marine Institute.

English told the Stabroek Business, meanwhile, that the need to garner funding to develop the infrastructure for delivery of an oil and gas curriculum depended on significant funding. He said that much of the momentum of the institution had been reduced on account of the previous  administration’s decision to put an end to the granting of an annual subvention amounting to more than $30 million annually. Two years ago the current administration restored a $15 million subvention which the College said was inadequate to meet its needs. A lack of resources has meant that sections of the Critchlow campus had fallen into disrepair and English told Stabroek Business  that the institution was determined to create a modern complex.

Secretary to the Board of the College and General Secretary of the Guyana Trades Union Congress (GTUC), Lincoln Lewis told the Stabroek Business that over the years the institution had “more than justified benefitting from a state subvention and that the current state of affairs as far as the subvention was concerned was reflective of “an insensitivity to the contribution which the Critchlow Labour College has made over the years to improving the skills and enhancing the formal qualifications of the workers of Guyana”.

English told Stabroek Business, meanwhile, the Oil and Gas Academy would be seeking to provide support to both the public and private sectors as the country seeks to build capacity in the oil and gas field.

***

Regional Deepwater Industry in Southern Caribbean

(Energy Analytics Institute, Aaron Simonsky, 7.Jun.2018) – Kevin Ramnarine discusses the regional deep-water industry in the southern Caribbean during a technical speech in Trinidad on the emerging regional deep-water province of Suriname, Trinidad and Tobago and Guyana, which was hosted by the Geological Society of Trinidad and Tobago and streamed live.

Deepwater Projects Breakeven at $42/bbl, Ramnarine Says

(Energy Analytics Institute, Aaron Simonsky, 7.Jun.2018) –That’s according to comments by former Trinidad and Tobago Energy Minister Kevin Ramnarine.

“On average, deep-water projects need an oil price of US$42 per barrel to break even at an NPV10. Assuming a 15% internal rate of return hurdle (NPV15), 5 billion barrels of pre-sanction deep-water reserves now breakeven at US$50/boe or lower. This triples to 15 billion boe at US$60/boe,” said Ramnarine, speaking in Trinidad during a technical talk on the emerging regional deep-water province of Suriname, Trinidad and Tobago and Guyana, which was hosted by the Geological Society of Trinidad and Tobago and streamed live.

Ramnarine — a strategy energy advisor — also highlighted that during the period of 2012-2014, there were 510 deep-water exploration wells drilled in 55 countries, while during 2015-2017, there were 231 deep-water exploration wells drilled in 37 countries.

“We have four drill ships simultaneously working in this part of the world [Guyana and Suriname]. Five years ago that was probably something we couldn’t conceive of,” he said.

***

Ramnarine Talks About Southern Caribbean Deepwater Industry

(Energy Analytics Institute, Ian Silverman, 31.May.2018) – Former Trinidad and Tobago Energy Minister Kevin Ramnarine will speak in Port of Spain about the regional deepwater industry in the Southern Caribbean.

An abstract from his technical talk about the regional deepwater industry in the Southern Caribbean, and the case of Guyana, Suriname & Trinidad and Tobago, follows:

“The 2015 discovery by ExxonMobil of oil in Guyana’s Stabroek Block, the discovery of natural gas by BHP Billiton in Trinidad and Tobago’s Block TTDAA 5 in 2017 and ongoing exploration in both countries and in Suriname have set the stage for a major deepwater oil industry in the Southern Caribbean which could potentially extend to Barbados. Such an industry will have a transformative effect on the practice of geoscience and all aspects of petroleum engineering. In addition, deepwater oil and natural gas commercialization require different skills and technologies different to what obtains on the shallow and average depth waters of continental shelf.”

For more details contact The Geological Society of Trinidad & Tobago at thegstt@gmail.com
***

Guyana’s Energy Agency Responds in Q&A about Fuel Smuggling

(Energy Analytics Institute, Piero Stewart, 30.May.2018) – Fuel smuggling from countries neighbouring Guyana is a major issue. The small South American country has developed the Fuel Marking Programme to address the issue.

 What follows here within are questions from Guyana’s Stabroek News directed at the Guyana Energy Agency (GEA) and the answers from the latter.

1. Stabroek News (SN): SN has received numerous reports that fuel is being smuggled into Guyana from Venezuela. Is the GEA aware of this?

Guyana Energy Agency (GEA): Arising from complaints about 2004 that there was significant smuggling of fuel into Guyana, with about one third of the fuel used in Guyana believed to have been smuggled, the Fuel Marking Programme was established.

From 2006 to 2013, the percentage of sites found with significant dilution in at least one tank has progressively decreased from 34% in 2006 to 3% in 2013.  

GEA has achieved 29 convictions since the commencement of Prosecutions for illegal fuel.

While we are unsure of the source of this illegal fuel, one may presume that it originates from neighbouring countries such as Suriname, Trinidad and Tobago and/or Venezuela.

The success of the Fuel Marking programme, and the fact that since its implementation there has been a significant drop in fuel smuggling, is testament to the fact that GEA has always strategized about where their presence is needed. 

The Agency continuously monitors and reassesses their strategy to ascertain whether an impact is being made, or whether there is need for change with the aim of ensuring that Fuel Smuggling is curtailed.

2. Stabroek News: Has there been any dialogue between officials of the GEA and the police or the mining association or the Ministry of Natural Resources on the presence of illegal fuel in areas such as the North West and the Essequibo Coast. If so when last where any dialogues held and what were some of the recommendations made?

Guyana Energy Agency: In 2007, a Task Force on Fuel Smuggling and Contraband was convened under the auspices of the Ministry of Home Affairs to coordinate the efforts of the different law enforcement agencies in the fight against fuel smuggling and contraband. The resulting cooperation between the Guyana Police Force, Guyana Revenue Authority, Guyana Energy Agency, Guyana Defence Force Coast Guard and Customs Anti-Narcotics Unit (CANU) aided in several interdictions of illegal fuel and assistance in capturing, escorting and securing various transport vessels (both land and water). Cooperation from the Guyana Police Force in the detention of suspects and the GDF Coast Guard and Guyana Revenue Authority (GRA) in joint operations have proven invaluable in combating the illegal fuel trade.

The GEA is also part of the Hinterland Intelligence Committee (HIC), which was organized by the Guyana Police Force (GPF) and is chaired by the Commissioner of Police. Members of this committee include the Guyana Defence force (GDF), Civil Aviation Authority, Guyana Geology and Mines Commission (GGMC), Guyana Gold and Diamond Miners Association, Guyana Revenue Authority (GRA), Guyana Police Force, Association of Aircraft Owners, Ministry of Health, Ministry of Local Government, Guyana Forestry Commission and the Guyana Women Miners Organization, among others.

Many issues are discussed at monthly meetings of both the Task Force and HIC, including the issue of fuel smuggling. 

Additionally, the GPF is usually consulted when there is an emergency or if a tip is received. GEA usually solicits the support of other enforcement Agencies as required. 

3. Stabroek News: Are there any GEA officers present in Port Kaituma, any other part of the North West and the Essequibo Coast to check for illegal fuel? If so can you give a total figure or an average of the number of officers present in the Northwest and Essequibo and the locations where they are based. For example two are based at Port Kaituma and one close to the Venezuela border.

Guyana Energy Agency: GEA has permanent bases at Georgetown, Linden and Essequibo.

The GEA has more than 20 Field Officers tasked with testing fuel across the country.  

To ensure operational integrity and security, the Agency cannot disclose the number of staff present at these locations.

4. Stabroek News: Is there a process in place by the GEA to (a) check fuel boats in the North West to ensure that they are meeting the required standards and if so how often is this done (b) to ascertain where the GEA’s presence is mostly needed for example in the case of the North West whether it would be more beneficial to have officers based near the Guyana/Venezuela border at points where it is known that illegal fuel passes through?

Guyana Energy Agency: Government, recognizing the challenges in supplying border areas has allowed “border trade” along border areas to the west as long as the materials being brought into Guyana are being utilized within the border area. For fuel, for the time being, this applies to all of Region 1; down the Cuyuni to below Aranka in Region 7, and sub-Region 1 of Region 8. At this time, fuel supplied from our coast to Region 9 is generally less costly from fuel coming across the Brazilian border. Government does not consider fuel traded across the border as illegal in the areas mentioned.

5. Stabroek News: In relation to the recent explosion at Port Kaituma, is the GEA conducting any investigations to ascertain whether the boat that exploded and the others which were burnt were carry illegal fuel?

Guyana Energy Agency: Fires and explosions fall under the purview/responsibility of the Guyana Fire Service and the Guyana Police Force. 

In fact, the Guyana Fire Service is preparing a report which will be the basis for discussions amongst relevant Government Agencies and other stakeholders.

6. Stabroek News: Has GEA officials gone around the community to persons who are selling fuel to ascertain whether it is legal or illegal?

Guyana Energy Agency: Officers of the GEA visit the area at least twice per year to learn about what is happening in the area.

The Task Force on Fuel Smuggling and Contraband has, in the past, visited the communities.

7. Stabroek News: Have complaints ever been made to the GEA about the presence of illegal fuel at Port Kaituma and if so what has been done about it?

Guyana Energy Agency: See response at 4. above.

8. Stabroek News: On a general note how big an issue is illegal fuel in Guyana and where does the bulk if it comes from?

Guyana Energy Agency: Illegal fuel causes loss of revenue from related tax losses and also has a negative effect on legitimate businesses. Prior to 2003 Guyana was facing a large number of fuel smuggling and associated tax losses. Non-taxed fuel was being smuggled into the country and sold illegally to retail sites while taxed road fuels were being adulterated with untaxed kerosene. With no means of identifying which fuels were legally imported and which were smuggled, and recognizing the ruinous effect of fuel smuggling on legitimate businesses, the Government of Guyana implemented the Fuel Marking Programme (FMP) in 2003.  

With the technology being new to Guyana and the region at the time of its introduction, there was need for specialised legislation. The Guyana Energy Agency Act 1997 was therefore amended in 2004 to provide specifically for licensing of the different classes of fuel dealers and for the marking of all legitimately imported fuel. Subsidiary legislation in the form of the Petroleum and Petroleum Products Regulations 2004 was also created to regularize fuel operations.

The Fuel Marking Programme was charged with the responsibility of ensuring that all gasoline, diesel and kerosene were properly ‘marked’ at a known concentration at all legitimate import points and also collecting and testing samples of fuel from various parts of the country including wholesalers, retailers, distributors, transporters, commercial consumers and any person in possession of fuel for the relevant marker(s).

The constant monitoring and maintenance of the Fuel Marking System’s integrity is absolutely necessary for its continued success.

While we are unsure of the source of this illegal fuel, one may presume that it originates from neighbouring countries such as Suriname, Trinidad and Tobago and/or Venezuela. 

9. Stabroek News: Why do you think persons insist on transporting and using illegal fuel as oppose to legal fuel?

Guyana Energy Agency: GEA too would like to know.

10. Stabroek News: What are some of the dangers attached to having illegal fuel in one’s possession?

Guyana Energy Agency: Persons found with illegal fuel can be prosecuted. 

Illegal fuel can also affect consumers owing to the fact that usually, the illegal fuel that comes into the country is of a lower quality than the legal one.  We have found that often the illegal fuel is smuggled in dirty containers and it is exposed to salt water (sea water) which causes it to become contaminated.  The use of contaminated fuel damages equipment. Contaminated fuel can cause damage to fuel pumps, cause injectors to become blocked, damage fuel filters and spark plugs.

There are also safety concerns attached to having illegal fuel in one’s possession. In trying to hide an illegal operation a person may compromise safety to conceal the said operation. 

11. Stabroek News: In addition to marking fuel, does the GEA’s work also entail ensuring that the boats meet the required standards for transporting and storing fuel?

Guyana Energy Agency: A Bulk transportation Licence from the GEA if a person is transporting an aggregate quantity of 2000 litres of petroleum and petroleum products in a vehicle, vessel or boat.

As part of its licensing process for the Bulk Transportation of fuel in boats/vessels, GEA’s Officers conduct an Inspection of the facilities and operators are required to submit: a) Petroleum License from the Guyana Fire Service (GFS) b) Maritime Administration Department (MARAD) Inspection Certificate c) Captain’s License d) Vessel License (MARAD).

GEA continuously monitors and evaluates its strategies and procedures. In 2013 GEA conducted research on Fuel handling Standards used in India, USA, Canada and Europe for Vessels, Trucks and Tankers transporting Fuel and petroleum products. 

GEA subsequently collaborated with the Guyana National Bureau of Standards (GNBS) and Guyana Fire Service (GFS) to research and formulate draft guidelines for the transportation of fuel using approved containers and drums. During this process Regulations and Guidelines from Trinidad and Tobago, USA and Canada, for transporting fuel by Tanker Wagons and other vessels were examined. Precedents were also obtained, and best practices extracted and reviewed, to ensure practicality and applicability to Guyana.

Two standards were then drafted, and submitted to GNBS and GFS, by the Guyana Energy Agency. A Technical Committee has been convened by GNBS with representation from relevant stakeholders. This committee is currently reviewing the standards with the aim of having it approved and published. 

12. Stabroek News: Does the GEA have a list of persons in the Northwest who transport fuel and if one wants to enter into such a business what is the process in place for doing so?

Guyana Energy Agency: Answer: See response in 4 above.

A link to the original PDF on the Guyana Energy Agency (GEA) website follows:

http://www.gea.gov.gy/index.php?option=com_content&view=article&id=3&Itemid=107

***

Energy, Education, and Learning Through NRG ED

(Energy Analytics Institute, Aaron Simonsky, 24.May.2018) – Energy Analytics Institute, formerly LatinPetroleum Inc., continues to promote its “Energy Education Initiative” in the Americas, also known as “NRG ED.”

NRG ED is structured to work with K-12 schools, community colleges, four-year colleges and universities, workforce training programs, communities and businesses, and aims to promote reduction of non-renewable energy usage in favor of renewable energies. However, the core of the initiative is education, without which the NRG ED initiative would not be.

“At its core the initiative is really focused on education,” said Chad Archey, Editor-in-Chief at Energy Analytics Institute from Atlanta, Georgia.

EAI views basic education as most important in the overall learning process and also promotes educational initiatives and research from grade school to the professional level related to the energy sector. EAI aims to foment constructive dialogue regarding energy usage as well as ways to reduce the carbon footprint left by non-renewable energy resources through the following: 1) educational consultancy, 2) development and distribution of educational and training materials, and 3) promotion of debate and discussion regarding renewable energy alternatives.

Energy Analytics Institute (EAI), formerly LatinPetroleum Inc. (dba LatinPetroleum.com), is a Houston-based independent company focused on producing non-biased news, updates and special reports for investors interested in the Latin America and Caribbean petroleum sectors.
***

Exxon Defends Guyana Deal Amid Criticism, Seeks Quick Production

(Seeking Alpha, Carl Surran, 1.May.2018) – Exxon Mobil defends its oil production contract with Guyana after the International Monetary Fund recommended the country rewrite its tax laws to increase its share of profitable oil and close out loopholes.

“We wouldn’t see any need to renegotiate,” says Erik Oswald, XOM’s VP for exploration in the Americas. ‘The experts are saying there’s nothing unusual or strange about the 2016 contract. [It’s a] middle of the road average contract” for a frontier country, citing studies by Wood Mackenzie and Rystad Energy.

Guyana has become a critical area for XOM, which is struggling to stem production declines across its global business; the company’s deepwater discoveries there are enormous and highly profitable, as breakeven costs including taxes are only ~$26/bbl vs. current Brent prices of ~$75/bbl.

Oswald says a dry hole drilled recently, only the second among seven successes, hasn’t dimmed XOM’s view of Guyana’s potential, as plenty of “headroom” remains for the discovery to increase beyond the 3.2B barrels already found.

“The most important thing… is this is production coming out super quickly,” Oswald says. “We’re going to get real high quality, extremely profitably production, early 2020. That’s a reasonable target.”
***

ECLAC Ssays Venezuela’s Economic Activity to Fall 8.5% in 2018

(Energy Analytics Institute, Aaron Simonsky, 1.May.2018) – The United Nations Economic Commission for Latin America and the Caribbean, also known as ECLAC or CEPAL by its Spanish acronym, projects economic activity in troubled Venezuela will contract 8.5% in 2018.

Gross domestic product or (GDP) estimates for other important countries and regions follows:

TABLE 1: ECLAC GDP ESTIMATES FOR 2018

Country/Region —————————- GDP (Est.)

Argentina ———————————— 2.5%
Bolivia ————————————— 4.0%
Brazil —————————————- 2.2%
Chile —————————————– 3.3%
Colombia ———————————— 2.6%
Ecuador ————————————– 2.0%
Paraguay ————————————- 4.0%
Uruguay ————————————– 3.0%
Venezuela ———————————– (8.5%)

Latin America and Caribbean (LAC) —- 2.2%
South America —————————— 2.0%
Central America and Mexico ————- 2.6%
Central America —————————- 3.6%
Latin America ——————————- 2.2%
Caribbean ———————————— 1.4%

Source: ECLAC, April 2018
***

Hess Acquires Interest in New Acreage Offshore Guyana

(World Oil, 30.Apr.2018) – Hess Corporation has announced that its subsidiary, Hess Guyana (Block B) Exploration Limited, had reached agreement with Esso Exploration and Production Guyana Limited (ExxonMobil) to acquire a 15% participating interest in the Kaieteur Block, offshore Guyana. The Cooperative Republic of Guyana has provided Hess and ExxonMobil an instrument detailing the transfer of interest, which has been completed.

The Kaieteur block is located approximately 155 mi (approximately 250 km) offshore the coast of Guyana, adjacent to the Stabroek Block. The Kaieteur Block is approximately 3.3 million acres (approximately 13,535 km2), which is equivalent in size to more than 580 deepwater blocks in the Gulf of Mexico. The work program in 2018 will include processing and interpretation of approximately 5,700 km2 of 3D seismic data and evaluation of a future drilling program.

Significantly, the Kaieteur Block lies in the same geological basin as the Stabroek Block, where total recoverable resources of more than 3.2 Bboe have been discovered to date. Hess has a 30% working interest in the Stabroek Block.
***

Exxon Mobil: Second Well has no Commercial Quantities of Oil

(Asianet-Pakistan, 28.Apr.2018) – ‘Unfortunately, the well did not encounter commercial quantities of hydrocarbons. Exploration wells come with a certain amount of risk and this is particularly true in frontier areas like Guyana. Success is not guaranteed,’ the local office of ExxonMobil said in a statement.

The well is the second one to turn up dry out of the eight wells that were drilled in the Stabroek Block area so far.

ExxonMobil’s Vice President and Secretary, Jeff Woodbury, who made the announcement, said ‘the Soribrum well reached total depth this week but failed to encounter commercial quantities of hyrdrocarbons’.

The company said that it began drilling the Sorubim well on April 3 and that the drill ship, Bob Douglas, will complete this well and then move to begin drilling the Liza Phase 1 wells.

Woodbury said additional drilling is planned later this year as ‘we continue to explore the full potential of the Stabroek Block’.

The company said the Stena Carron drill ship will continue to explore and evaluate other areas of the block. The Stena Carron is currently drilling the Liza 5 well, which will likely be followed by a new prospect, called Long Tail.
***

Expert from UG Not Sanguine About ‘Up Front’ Cash

(Stabroek News, 23.Mar.2018) – “While the front-loading of contracts and the securing of large contracts might be politically popular it might prove to be economically disastrous, University of Guyana Business Professor Leyland Lucas has said in an article that seeks, in part, to respond to the popular argument touting the virtue of so-called front-loading, that is, the drawing down of significant cash amounts of as yet unearned income from the oil and gas industry.

Lucas, who is serving as Visiting Professor at UG’s School of Entrepreneurship and Business Innovation (SEBI) says in his article that there could be pitfalls associated with the popular “up-front” or front-loading argument that has been steadily gaining traction among ordinary Guyanese.

The link to the full article follows.

Head of UG’s School of Business not sanguine about ‘up front’ cash from oil and gas industry

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Guyana: The Oil Contract Debate

(By Lakhram Bhagirat and Leyland M. Lucas, Stabroek News, 23.Mar.2018) – In the late 1990s, Guyana signed an Oil and Gas exploration agreement with Exxon’s subsidiary, EEPGL. That agreement not only permitted significant activity by Exxon, but also provided Guyana with a small subsumed royalty of no more than 1%. The agreement was also in clear contravention of Guyana’s laws, which stipulated the number of blocks that could be offered to a single entity. Though there were clear violations in law, Guyana has chosen to honour that obligation rather than raise it in other forums or attempt to invalidate it. As a nation, our word has been our bond.

Fast forward to our current situation where we find much being discussed regarding the current contract, and whether or not the nation’s best interests have been considered. In fact, in the past few months, we have been privy to an ongoing debate around the contracts signed by the Government of Guyana and Exxon. This debate has gotten so intense that some have even questioned the integrity and negotiating ability of governments in other developing countries, where the exploration of oil and gas is ongoing. Yes, in the case of Guyana, there is a great deal of evidence to suggest that better could have been done. But, who are we to question the outcome, when we were absent from the process? As my grandmother would often say when a family member chose to criticize others ‘make sure that your house is clean before telling someone else that theirs is dirty.’

In an earlier article on local content, I made the point that oil is no longer a critical commodity. There is an abundance of oil in the global market, prices are highly volatile, and the world has begun a gradual process of shifting from fossil fuels to renewable sources of energy. These are realities that cannot be ignored. For example, within our hemisphere, we see significant declines in oil and gas production, yet very little evidence of a major impact in the global marketplace. Likewise, the Kingdom of Saudi Arabia, a major oil producer with one-fifths of the world’s reserves, has also begun the process of delinking its economy from oil-dependency and looking for newer ways to stimulate growth and development.

The link to the full article follows.

The Oil Contract Debate

***

CGX Energy Appoints Engineer For Corentyne Well in Guyana

(CGX, 2.Mar.2018) – CGX Energy Inc. announced appointment of Drilling Engineer Michael (Mike) P. Stockinger as Project Operations Manager, who will be in charge of designing the company’s next offshore exploration well on the Corentyne Block offshore Guyana.

“We are delighted that Mike Stockinger has rejoined the company as our Drilling Engineer. Mike brings 40 years of experience in the oil and gas business specializing in drilling, completions, and production engineering and operations,” said Executive Chairman, Professor Suresh Narine. “He is also no stranger to CGX and the Guyana Basin, having designed and drilled the company’s 100% interest Eagle Shallow well on its Corentyne Block and participated integrally in the design and drilling of the company’s 25% interest Jaguar well on the former Georgetown block.”

Stockinger graduated from Stevens Institute of Technology in Hoboken, New Jersey, with a BS in civil engineering and has significant experience in onshore and offshore drilling and completions operations, including direct involvement in spars, TLP’s, FPSO’s, subsea “smart wells, and drilling deep subsalt wells. Stockinger started his career with Texaco in Morgan City, La, as a drilling engineer. He then joined Conoco and worked for 18 years in various positions in drilling and completions both onshore and offshore US and international, including as Drilling Manager for Gulf of Mexico. Subsequently he joined Kerr-McGee and worked for 12 years in various positions including GOM Regional E&P Manager and Vice President for Worldwide Drilling and Completions. During this period Mr. Stockinger was involved in numerous deepwater exploration wells and was responsible for drilling and completions on six spars. In 2006, after Kerr-McGee was acquired by Anadarko, Stockinger became a consultant and worked as Project Drilling Manager for Remora in Columbia, for Murphy in Australia and Suriname, and for CGX Energy in Guyana.
***

ExxonMobil Announces Seventh Oil Discovery Offshore Guyana

(Exxon Mobil, 28.Feb.2018) – Exxon Mobil Corporation announced its seventh oil discovery offshore Guyana, following drilling at the Pacora-1 exploration well.

ExxonMobil encountered approximately 65 feet (20 meters) of high-quality, oil-bearing sandstone reservoir. The well was safely drilled to 18,363 feet (5,597 meters) depth in 6,781 feet (2,067 meters) of water. Drilling commenced on Jan. 29, 2018.

“This latest discovery further increases our confidence in developing this key area of the Stabroek Block,” said Steve Greenlee, president of ExxonMobil Exploration Company. “Pacora will be developed in conjunction with the giant Payara field, and along with other phases, will help bring Guyana production to more than 500,000 barrels per day.”

The Pacora-1 well is located approximately four miles west of the Payara-1 well, and follows previous discoveries on the Stabroek Block at Liza, Payara, Liza Deep, Snoek, Turbot and Ranger.

Following completion of the Pacora-1 well, the Stena Carron drillship will move to the Liza field to drill the Liza-5 well and complete a well test, which will be used to assess concepts for the Payara development. ExxonMobil announced project sanctioning for the Liza phase one development in June 2017. Following Liza-5, the Stena Carron will conduct additional exploration and appraisal drilling on the block.

The Stabroek Block is 6.6 million acres (26,800 square kilometers). Esso Exploration and Production Guyana Limited is operator and holds 45 percent interest in the Stabroek Block. Hess Guyana Exploration Ltd. holds 30 percent interest and CNOOC Nexen Petroleum Guyana Limited holds 25 percent interest.
***

Guyana Basin Exploration to Ramp: Wood Mackenzie Says

(Energy Analytics Institute, Ian Silverman, 28.Feb.2018) – The Liza discovery was the largest oil discovery in 2015 and has significantly de-risked the Cretaceous Tertiary play, proving the existence of a working petroleum system in this portion of the basin, according to a “Guyana exploration basin” asset report summary published by Wood Mackenzie on its website.

The firm went on to say, “We expect exploration in this basin to ramp as the potential for material discoveries and material value creation is favourably high. The Guyana Basin is predominantly an offshore basin, stretching across the waters of Guyana, Suriname and French Guiana. The basin shares many similarities with emerging hydrocarbon plays on the Atlantic Margin of West Africa, including offshore Ghana, where the giant Jubilee discovery was made.
***

Guyana Is About to Open Up Pandora’s Barrel

(Mac Margolis, 16.Feb.2018) – Wedged between Brazil and Venezuela, Guyana could easily go unnoticed. It has fewer than 750,000 people and a per capita income of $4,300, half the regional average, qualifying it as the hemisphere’s third-poorest nation.

At the moment, Guyana also might be its luckiest. Having struck big oil offshore starting in 2015, industry experts reckon total reserves at around 2 billion barrels. That bounty could make Guyana immeasurably rich and Latin America’s biggest producer in less than a decade – or just another Trump-hole.

History abounds with tales of raw-material bonanzas turned into, at best, a mixed blessing for poor countries. Dutch disease, corruption (think Venezuela and Nigeria), life support for dictators: The gift of oil comes with many afflictions. A classic International Monetary Fund study found that living conditions in oil-rich nations in sub-Saharan Africa were no better or worse than countries without oil.

“Equatorial Guinea comes to mind,” Rice University energy scholar Francisco Monaldi told me, in reference to the Central African dictatorship which, after striking oil in the 1990s, went in a matter of years from desperately poor to desperately rich.

“We know historically that if you’re poorly managed when you received the windfall, you’ll likely have difficulty capitalizing your bounty for development,” said Monaldi.

The example is not lost on Guyana, which has a vibrant if flawed — “partially free,” according to Freedom House — democracy, but frail institutions and admittedly scarce human capital to manage the coming wealth. “Guyana has almost zero capacity now for dealing with oil and gas,” Jan Mangal, petroleum adviser to President David Granger, said recently at the University of Guyana.

While officials in Georgetown quickly disavowed Mangal, his comments were hard to ignore. With major oil set to flow as soon as 2020, authorities are bracing both for the shock of wealth and its attendant woes. The bounty will not come all at once: Exxon and other producers will use most of the early oil to pay down startup costs. But that will only delay the impact. “It’s like drinking from a fire hose right now,” Vincent Adams, a Guyanese engineer who recently retired from the U.S. Department of Energy, told me.

One of the biggest challenges is who will manage the gusher. Guyana is a nation of emigrants. Some 463,000 Guyanese, or 60 percent of its population, live abroad, and the outflow continues apace. What’s worse, the leavers have included roughly nine of every 10 graduates with higher education — energy experts and oil engineers among them — according to the World Bank. “The cream of the crop migrated,” said Adams. “In terms of local capacity, we are at a serious disadvantage.”

Guyana could attenuate the brain drain by reaching out to its diaspora. There are more than 100 reported expatriate organizations, and as a group overseas Guyanese consistently send more money back home than foreign investors plow into the economy every year, according to a recent study by Hisakhana Pahoona Corbin and Luis Eduardo Aragon of the Center for Advanced Amazonian Studies. “We have a repository of knowledge outside of Guyana which is amazing,” said Adams.

The government belatedly began to tap this talent pool, launching an official Guyana Diaspora Project in late 2012, but the effort has been criticized as timid. “In spite of this potential, few institutional arrangements have been put in place to better engage the diaspora or to unlock their potentials as an alternative for accelerating development,” Corbin and Aragon wrote last year.
Granted, Guyana will have some help. The Extractive Industries Transparency Initiative is counseling officials on how to avert corruption. Multilateral lenders are training Guyanese to develop an investment plan and mitigate the fiscal risk of the oil boom. “The sudden inflow of wealth could become a tsunami, and if it’s not managed well, could leave a dire situation,” Ramon Espinasa, general coordinator of the Extractive Sector Initiative at the Inter-American Development Bank, said in an interview.

Big Oil also knows the stakes. Despite the familiar criticisms — “Dem know wha Exxon do to govt all over de world,” one marquee local columnist warned in a mock patois — drillers have every reason to make sure their investment is safe.

The hardest part will be down to the host country, of course. “Until recently, small countries like ours were sheltered by benefactors in the east or west. Now the Berlin Wall is gone and the protectors have become our competitors, and we’re left to deal with the world markets,” said Adams.

That’s the challenge the country’s emigrants faced when they remade their careers abroad. Now Guyana must reach out to its diaspora ringers and bring that lesson home.
***

CGX Announces Resignation of its Chief Executive Officer

(CGX, 10.Jan.2018) – CGX Energy accepted Mr. Dewi Jones’ resignation as Chief Executive Officer of the company, effective January 8, 2018.

“The xompany would like to thank Mr. Jones for his contribution over the years and wish him success in his future endeavours,” said Professor Suresh Narine, Chairman and Executive Director (Guyana).

Professor Narine will act in the capacity of Executive Chairman of the company for the foreseeable future.
***

ExxonMobil Announces Sixth Oil Discovery Offshore Guyana

(Exxon Mobil, 5.Jan.2018) – Exxon Mobil Corporation announced positive results from its Ranger-1 exploration well, marking ExxonMobil’s sixth oil discovery offshore Guyana since 2015.
The Ranger-1 well discovery adds to previous world-class discoveries at Liza, Payara, Snoek, Liza Deep and Turbot, which are estimated to total more than 3.2 billion recoverable oil-equivalent barrels.

ExxonMobil affiliate Esso Exploration and Production Guyana Ltd. began drilling the Ranger-1 well on Nov. 5, 2017 and encountered approximately 230 feet (70 meters) of high-quality, oil-bearing carbonate reservoir. The well was safely drilled to 21,161 feet (6,450 meters) depth in 8,973 feet (2,735 meters) of water.

“This latest success operating in Guyana’s significant water depths illustrates our ultra deepwater and carbonate exploration capabilities,” said Steve Greenlee, president of ExxonMobil Exploration Company. “This discovery proves a new play concept for the 6.6 million acre Stabroek Block, and adds further value to our growing Guyana portfolio.”

Following completion of the Ranger-1 well, the Stena Carron drillship will move to the Pacora prospect, 4 miles from the Payara discovery. Additional exploration drilling is planned on the Stabroek Block for 2018, including potential appraisal drilling at the Ranger discovery.

The Stabroek Block is 6.6 million acres (26,800 square kilometers). Esso Exploration and Production Guyana Limited is operator and holds 45 percent interest in the Stabroek Block. Hess Guyana Exploration Ltd. holds 30 percent interest and CNOOC Nexen Petroleum Guyana Limited holds 25 percent interest.
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ExxonMobil Announces Fifth Discovery Offshore Guyana

(Exxon Mobil, 5.Oct.2017) – Exxon Mobil Corporation announced it made a fifth new oil discovery after drilling the Turbot-1 well offshore Guyana.

Turbot is ExxonMobil’s latest discovery to date in the country, adding to previous discoveries at Liza, Payara, Snoek and Liza Deep. Following completion of the Turbot-1 well, the Stena Carron drillship will move to the Ranger prospect. An additional well on the Turbot discovery is being planned for 2018.

ExxonMobil affiliate Esso Exploration and Production Guyana Ltd. began drilling the Turbot-1 well on Aug. 14, 2017 and encountered a reservoir of 75 feet (23 meters) of high-quality, oil-bearing sandstone in the primary objective. The well was safely drilled to 18,445 feet (5,622 meters) in 5,912 feet (1,802 meters) of water on Sept. 29, 2017. The Turbot-1 well is located in the southeastern portion of the Stabroek Block, approximately 30 miles (50 kilometers) to the southeast of the Liza phase one project.

“The results from this latest well further illustrate the tremendous potential we see from our exploration activities offshore Guyana,” said Steve Greenlee, president of ExxonMobil Exploration Company. “ExxonMobil, along with its partners, will continue to further evaluate opportunities on the Stabroek Block.”

The Stabroek Block is 6.6 million acres (26,800 square kilometers). Esso Exploration and Production Guyana Limited is operator and holds 45 percent interest in the Stabroek Block. Hess Guyana Exploration Ltd. holds 30 percent interest and CNOOC Nexen Petroleum Guyana Limited holds 25 percent interest.
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ExxonMobil Announces Successful Payara-2 Well Offshore Guyana

(Exxon Mobil, 25.Jul.2017) – Exxon Mobil Corporation announced it has discovered additional oil in the Payara reservoir offshore Guyana, increasing the total Payara discovery to approximately 500 million oil-equivalent barrels.

These positive well results increase the estimated gross recoverable resource for the Stabroek Block to between 2.25 billion oil-equivalent barrels and 2.75 billion oil-equivalent barrels.

The well was successfully drilled by ExxonMobil affiliate Esso Exploration and Production Guyana Limited and encountered 59 feet (18 meters) of high-quality, oil-bearing sandstone in the Payara field.

It was safely drilled to 19,068 feet (5,812 meters) in approximately 7,000 feet (2,135 meters) of water. The well is only 12 miles (20 kilometers) northwest of the recently funded Liza phase 1 project on the Stabroek Block, which is approximately 130 miles offshore Guyana.

“Payara-2 confirms the second giant field discovered in Guyana,” said Steve Greenlee, president of ExxonMobil Exploration Company. “Payara, Liza and the adjacent satellite discoveries at Snoek and Liza Deep will provide the foundation for world class oil developments and deliver substantial benefits to Guyana. We are committed to continue to evaluate the full potential of the Stabroek Block.”

The Stabroek Block is 6.6 million acres (26,800 square kilometers). Esso Exploration and Production Guyana Limited is operator and holds 45 percent interest in the Stabroek Block. Hess Guyana Exploration Ltd. holds 30 percent interest and CNOOC Nexen Petroleum Guyana Limited holds 25 percent interest.
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ExxonMobil Acquires Interest in Acreage Offshore Suriname

(Exxon Mobil, 13.Jul.2017) – Exxon Mobil Corporation announced that its subsidiary ExxonMobil Exploration and Production Suriname B.V., along with co-venturers Hess and Statoil, signed a production sharing contract for Block 59 with Staatsolie Maatschappij Suriname N.V., the national oil company of Suriname. The block adds significant acreage to ExxonMobil’s operated portfolio in the Guyana-Suriname Basin.

Deepwater Block 59 is in water depths ranging from nearly 2,000 meters to 3,600 meters, located approximately 190 miles (305 kilometers) offshore Suriname’s capital city, Paramaribo. The block is 2.8 million acres, or 4,430 square miles, and shares a maritime border with Guyana, where ExxonMobil is the operator of three offshore blocks, including the world-class Liza field discovered by ExxonMobil in 2015.

“We look forward to working with Staatsolie and our co-venturers to evaluate the potential of this new acreage,” said Steve Greenlee, president of ExxonMobil Exploration Company. “Adding this block enhances our leading global deepwater portfolio.”

Suriname represents a new country for ExxonMobil’s upstream business. The company has investments throughout South America. Following contract signing, the co-venturers are preparing to begin exploration activities, including acquisition and analysis of seismic data.

ExxonMobil and consortium partners Hess and Statoil each hold a third of the interest in the block. ExxonMobil is the operator.
***

ExxonMobil Makes Final Decision Regarding Liza Development

(Exxon Mobil, 16.Jun.2017) – Exxon Mobil Corporation said it has made a final investment decision to proceed with the first phase of development for the Liza field, one of the largest oil discoveries of the past decade, located offshore Guyana.

The company also announced positive results from the Liza-4 well, which encountered more than 197 feet (60 meters) of high-quality, oil-bearing sandstone reservoirs, which will underpin a potential Liza Phase 2 development. Gross recoverable resources for the Stabroek block are now estimated at 2 billion to 2.5 billion oil-equivalent barrels, which includes Liza and other successful exploration wells on Liza Deep, Payara and Snoek.

The Liza Phase 1 development includes a subsea production system and a floating production, storage and offloading (FPSO) vessel designed to produce up to 120,000 barrels of oil per day. Production is expected to begin by 2020, less than five years after discovery of the field. Phase 1 is expected to cost just over $4.4 billion, which includes a lease capitalization cost of approximately $1.2 billion for the FPSO facility, and will develop approximately 450 million barrels of oil.

“We’re excited about the tremendous potential of the Liza field and accelerating first production through a phased development in this lower cost environment,” said Liam Mallon, president, ExxonMobil Development Company. “We will work closely with the government, our co-venturers and the Guyanese people in developing this world-class resource that will have long-term and meaningful benefits for the country and its citizens.”

The Liza Phase 1 development can provide significant benefits to Guyana, including jobs during installation and operations, workforce training, local supplier development and government revenues to fund infrastructure, social programs and services.

The development received regulatory approval from the government of Guyana.

The Liza field is approximately 190 kilometers offshore in water depths of 1,500 to 1,900 meters. Four drill centers are envisioned with a total of 17 wells, including eight production wells, six water injection wells and three gas injection wells.

The Liza field is part of the Stabroek Block, which measures 6.6 million acres, or 26,800 square kilometers. Esso Exploration and Production Guyana Limited is operator and holds a 45 percent interest in the block.

Hess Guyana Exploration Ltd. holds a 30 percent interest and CNOOC Nexen Petroleum Guyana Limited holds 25 percent.

Esso Exploration and Production Guyana Limited is continuing exploration activities and operates three blocks offshore Guyana – Stabroek, Canje and Kaieteur. Drilling of the Payara-2 well on the Stabroek block is expected to commence in late June and will also test a deeper prospect underlying the Payara oil discovery.
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ExxonMobil Announces New Oil Discovery Offshore Guyana

(Exxon Mobil, 30.Mar.2017) – Exxon Mobil Corporation announced positive results on the Snoek well offshore Guyana, confirming a new discovery on the Stabroek Block. Drilling targeted similar aged reservoirs as encountered in previous discoveries at Liza and Payara.

“The latest discovery at Snoek demonstrates the continued success we have achieved in this technically complex play, which is just part of the significant exploration province offshore Guyana,” said Steve Greenlee, president of ExxonMobil Exploration Company.

ExxonMobil affiliate Esso Exploration and Production Guyana Ltd. commenced drilling of the Snoek well on Feb. 22, 2017 and encountered 82 feet (25 meters) of high-quality, oil-bearing sandstone reservoirs. The well was safely drilled to 16,978 feet (5,175 meters) in 5,128 feet (1,563 meters) of water on March 18. The Snoek well is located in the southern portion of the Stabroek Block, approximately 5 miles (9 km) to the southeast of the 2015 Liza-1 discovery.

Following completion of the Snoek well, the Stena Carron drillship has moved back to the Liza area to drill the Liza-4 well.

“As we continue to evaluate the full potential of the broader Stabroek Block, we are also taking the necessary steps to ensure the safe, cost-efficient and responsible development of this world-class resource, which can provide long-term, sustainable benefits to the people of Guyana,” said Greenlee.

The Stabroek Block is 6.6 million acres (26,800 square kilometers). Esso Exploration and Production Guyana Limited is operator and holds 45 percent interest in the Stabroek Block. Hess Guyana Exploration Ltd. holds 30 percent interest and CNOOC Nexen Petroleum Guyana Limited holds 25 percent interest.
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Guyana’s Initial Oil Output to Surpass Trinidad

(Energy Analytics Institute, Pietro D. Pitts, 2.Mar.2017) – Sleepy Guyana is gearing up to surpass twin-island nation Trinidad and Tobago in terms of oil production.

Production plans by Irving, Texas-based Exxon Mobil Corporation at the promising Stabroek Block offshore Guyana will assist the small country to initially produce more oil than its Caribbean neighbor Trinidad, which has been producing oil for over a century.

Exxon — which plans to make an investment decision later this year regarding finds at the Stabroek Block, including the Liza, Liza deep and Payara wells – expects production of 100,000 barrels per day in 2020 in the initial phase using a Float Production, Storage and Offloading (FPSO) unit, said Jeff Woodbury, Exxon Mobil Vice President of Investor Relations during a conference call on January 31, 2017.

“Guyana is to become the newest petrostate. It has two neighbors from which to learn what to do, Trinidad, and what not to do, Venezuela,” Francisco J. Monaldi, Ph.D. and Fellow in Latin American Energy Policy & Lecturer in Energy Economics at Rice University’s Baker Institute for Public Policy wrote in a twitter post.

The Stabroek Block covers 6.6 million acres (26,800 square kilometers). The operator of the block is Esso Exploration and Production Guyana Limited with a 45 percent interest. Other partners in the block include: Hess Guyana Exploration Ltd. with a 30 percent interest and CNOOC Nexen Petroleum Guyana Limited with a 25 percent interest.

Trinidad produced an average of around 72,000 barrels per day in the eleven months between January and November of 2016, according to data published in a bulletin by the country’s Ministry of Energy and Energy Industries.

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Guyana’s Ministry Continues Engagement with Stakeholders

(Guyana Ministry of Natural Resources, 26.Jan.2017) – As part of the Ministry of Natural Resources’ continuous engagement of stakeholders on preparations of Guyana’s developing oil and gas industry, the Ministry hosted a number of meetings.

Members of the National Assembly including, members of the Parliamentary Sectoral Committee on Natural Resources, have also been engaged in the progress of activities as a part of regular briefs they have been provided from Minister Trotman and team at the Ministry on the progress of preparations for oil and gas production.

Further, efforts are underway to reach out to a wide range of stakeholders and the relevant private sector bodies and civil society groups have already benefited from these engagements. More consultations are scheduled to share the plans and policies that have been developed for the oil and gas sector with an even wider cross-section of Guyanese. These engagements will commence during February 2017.

The Ministry of Natural Resources welcomes opportunities to engage with all stakeholders for the advancement of the Oil and Gas industry in Guyana and encourages discourse that will promote understanding about the sector and transparency in its management.

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Guyana Ministry Clarifies Huffington Article

(Guyana Ministry of Natural Resources, 19.Jan.2017) – The Ministry of Natural Resources would like to clarify for the benefit of the public an article by online media outlet The Huffington Post published on January 17, 2017.

The article, headlined ‘Conflict: Tillerson would Write the Rules for Exxon’s Major Oil Find in Guyana’ inaccurately states that the United States’ Energy Governance and Capacity Initiative (EGCI) is “involved in writing oil and gas regulations for the country of Guyana, where Exxon just announced another major oil find.”

There is no truth to the assertion in the article that the EGCI will be playing any part in writing Guyana’s oil governance laws, or any laws for that matter. The Commonwealth Secretariat is the lead agency supporting Guyana in preparing a suite of legislation for the oil and gas industry.

The opportunity is taken to indicate that while the EGCI has been lending support to Guyana for the past six years in the area of capacity building to manage eventual oil and gas revenues, it is in no way writing oil and gas laws or regulations for this country.

It is important to note that this relationship between Guyana and the EGCI programme in Guyana predates the Ministry of Natural Resources and the current Coalition Administration as it commenced in 2010. Indeed, the Government of Guyana has had many engagements with the officials of the United States’ Department of State as part of the capacity building initiative. However, the EGCI programme has only been partially implemented through a series of scoping studies that were conducted in 2016.

The EGCI can be a useful programme once implemented and is but one in a raft of assistance measures that Guyana is receiving to bolster and in some cases build capacity in oil and gas governance.

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ExxonMobil Success in Guyana Continues

(Energy Analytics Institute, Piero Stewart, 16.Jan.2017) – ExxonMobil’s successful drilling streak continues in Guyana as the Irving, Texas-based company announced positive results from its second offshore well Payara-1, also located on the Stabroek Block.

The well, located just 16 kilometers from the earlier game-changing Liza discovery, encountered over 29 meters of high-quality, oil-bearing sandstone reservoirs.

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ExxonMobil Announces New Oil Discoveries Offshore Guyana

(Exxon Mobil, 12.Jan.2017) – Exxon Mobil Corporation announced positive results from its Payara-1 well offshore Guyana. Payara is ExxonMobil’s second oil discovery on the Stabroek Block and was drilled in a new reservoir. The Payara-1 well targeted similar aged reservoirs that were proven successful at the company’s Liza discovery.

“This important discovery further establishes the area as a significant exploration province,” said Steve Greenlee, president of ExxonMobil Exploration Company. “We look forward to working with the government and our co-venturers to continue evaluating broader exploration potential on the block and the greater Liza area.”

The well was drilled by ExxonMobil affiliate Esso Exploration and Production Guyana Limited, and encountered more than 95 feet (29 meters) of high-quality, oil-bearing sandstone reservoirs. It was safely drilled to 18,080 feet (5,512 meters) in 6,660 feet (2,030 meters) of water. The Payara field discovery is about 10 miles (16 km) northwest of the 2015 Liza discovery.

In addition to the Payara discovery, appraisal drilling at Liza-3 has identified an additional high quality, deeper reservoir directly below the Liza field, which is estimated to contain between 100-150 million oil equivalent barrels. This additional resource is currently being evaluated for development in conjunction with the world-class Liza discovery.

“These latest exploration successes are examples of ExxonMobil’s technological capabilities in ultra-deepwater environments, which will enable effective development of the resource for the benefit of the people of Guyana and our shareholders,” Greenlee said.

Drilling on Payara began on Nov. 12 with initial total depth reached on Dec. 2. Two sidetracks have been drilled to rapidly evaluate the discovery, and a well test is underway to further evaluate the successful well results. The well data will be analyzed in the coming months to better determine the full resource potential.

The Stabroek Block is 6.6 million acres (26,800 square kilometers). Esso Exploration and Production Guyana Limited is operator and holds 45 percent interest in the Stabroek Block. Hess Guyana Exploration Ltd. holds 30 percent interest and CNOOC Nexen Petroleum Guyana Limited holds 25 percent interest.
***

ExxonMobil Awards Key Contracts for Liza in Guyana

(Exxon Mobil, 20.Dec.2016) – Exxon Mobil Corporation subsidiary, Esso Exploration and Production Guyana Limited (EEPGL), announced that it has awarded contracts to SBM Offshore for a floating production, storage and offloading (FPSO) vessel, a key step in moving the Liza field toward first production.

Under the contracts, SBM Offshore will perform front end engineering and design for the FPSO, and, subject to a final investment decision on the project in 2017, will construct, install and operate the vessel.

“Liza development activities are steadily progressing, and we’re excited to reach this important milestone,” said Neil Duffin, president of ExxonMobil Development Company. “We look forward to working with the government of Guyana to develop its valuable resources, which have the potential to provide long-term, sustainable benefits to the country.”

ExxonMobil submitted an application for a production license and its initial development plan for the Liza field in early December. The development plan, submitted to the Guyana Ministry of Natural Resources, includes development drilling, operation of the FPSO, and subsea, umbilical, riser and flowline systems.

The Liza field has a potential recoverable resource estimate in excess of 1 billion oil-equivalent barrels and is located in the Stabroek block approximately 120 miles (193 kilometers) offshore Guyana.

The Stabroek block currently comprises 6.6 million acres (26,800 square kilometers). Esso Exploration and Production Guyana Limited is the operator and holds a 45 percent interest in the Stabroek block. Hess Guyana Exploration Ltd. holds a 30 percent interest, and CNOOC Nexen Petroleum Guyana Limited holds a 25 percent interest.
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ExxonMobil’s 2nd Well Offshore Guyana Confirms Oil

(Exxon Mobil, 30.Jun.2016) – Exxon Mobil Corporation said that drilling results from the Liza-2 well, the second exploration well in the Stabroek block offshore Guyana, confirm a world-class discovery with a recoverable resource of between 800 million and 1.4 billion oil-equivalent barrels.

“We are excited by the results of a production test of the Liza-2 well, which confirms the presence of high-quality oil from the same high-porosity sandstone reservoirs that we saw in the Liza-1 well completed in 2015,” said Steve Greenlee, president of Exxon Mobil Exploration Company. “We, along with our co-venturers, look forward to continuing a strong partnership with the government of Guyana to further evaluate the commercial potential for this exciting prospect.”

The Liza wells are located in the Stabroek block approximately 120 miles (193 kilometers) offshore Guyana. Data from the successful Liza-2 well test is being assessed.

The Liza-2 well was drilled by ExxonMobil affiliate Esso Exploration and Production Guyana Ltd., approximately 2 miles (3.3 km) from the Liza-1 well. The Liza-2 well encountered more than 190 feet (58 meters) of oil-bearing sandstone reservoirs in Upper Cretaceous formations. The well was drilled to 17,963 feet (5,475 meters) in 5,551 feet (1,692 meters) of water.

“This exploration success demonstrates the strength of our long-term investment approach, as well as our technology leadership in ultra, deepwater environments,” said Greenlee.

The Stabroek block is 6.6 million acres (26,800 square kilometers). Esso Exploration and Production Guyana Limited is operator and holds 45 percent interest in the Stabroek block. Hess Guyana Exploration Ltd. holds 30 percent interest and CNOOC Nexen Petroleum Guyana Limited holds 25 percent interest.
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ExxonMobil Reports Significant Oil Discovery Offshore Guyana

(Exxon Mobil, 20.May.2016) – Exxon Mobil Corporation announced a significant oil discovery on the Stabroek Block, located approximately 120 miles offshore Guyana.

The well was drilled by ExxonMobil affiliate, Esso Exploration and Production Guyana Ltd., and encountered more than 295 feet (90 meters) of high-quality oil-bearing sandstone reservoirs. It was safely drilled to 17,825 feet (5,433 meters) in 5,719 feet (1,743 meters) of water. Stabroek Block is 6.6 million acres (26,800 square kilometers).

“I am encouraged by the results of the first well on the Stabroek Block,” said Stephen M. Greenlee, president of ExxonMobil Exploration Company. “Over the coming months we will work to determine the commercial viability of the discovered resource, as well as evaluate other resource potential on the block.”

The well was spud on March 5, 2015. The well data will be analyzed in the coming months to better determine the full resource potential.

Esso Exploration and Production Guyana Ltd. holds 45 percent interest. Hess Guyana Exploration Limited holds 30 percent interest and CNOOC Nexen Petroleum Guyana Limited holds 25 percent interest.
***

Guyana Cabinet Briefed on Oil Sector Management

(Guyana Government Information Agency, 4.Sep.2015) – Minister of Governance, Raphael Trotman, has briefed Cabinet on the strategic, legislative, regulatory and institutional arrangements for the management of upstream activities in the Petroleum Sector.

This disclosure was made by Minister of State, Joseph Harmon, who briefed the media on the deliberations of the last meeting of Cabinet. According to Harmon, the policy as explained by Minister Trotman, is geared towards attracting and securing investments in upstream operations activity in the oil and gas sector in Guyana. It relates specifically to activities involving petroleum production, storage, refining, and marketing of these products.

The overall objective of this initiative is to place significant emphasis on ensuring that all the necessary arrangements be put in place for the effective and efficient development of the sector

Minister Harmon further advised that the Commonwealth Secretariat had already provided some assistance in this regard and assistance will be coming from other international agencies.

“It is a matter of for us to now agree on an updating on that policy, the UNDP has also offered technical cooperation and assistance, by providing us with some experts who are likely to come to Guyana in October to assist us in this work,” Harmon said.

Earlier this week, a team from ExxonMobil met with Minister Trotman and provided their continued commitment to proceed from the point of exploration to production of oil and natural gas. Trotman holds ministerial responsibility for natural resources.

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Guyana To Assure No Fuel Shortages

(Guyana Government Information Agency, 4.Sep.2015) – The government of Guyana believes that its responsibility and obligation are to ensure that there will be no shortage of fuel in Guyana, and so must do everything possible to keep the wheels of industry turning. This is according to Minister of State, Joseph Harmon, who stated that is against this background that the agreement to purchase fuel from Trinidad and Tobago was made.

“It is the government’s commitment to ensure that there is a reliable and regular supply of fuel, to drive industry in this country, and we as a government will do what is necessary in the public interest, to ensure that the wheels of industry continue to turn,” Minister Harmon told media operatives, at his post Cabinet press briefing.

According to Harmon, Cabinet was briefed on this matter by the Minister of Public Infrastructure, David Patterson. Guyana has been purchasing fuel from Venezuela under the PetroCaribe arrangement, but there have been occasions when shipments arrived late.

“A few weeks ago, the vessels that had gone to Venezuela to collect fuel, they were not provided with the fuel on time, and this type of ‘on and off’ arrangement, we have to ensure that we have an alternative arrangement put in place, to ensure that this will not lead to a shortage of fuel in Guyana,” Harmon said.

According to Harmon, fuel was already purchased form Trinidad and Tobago. “We have both arrangements in place, a standby arrangement, which we will utilize from Trinidad and Tobago, and the PetroCaribe arrangement, which is in place by contract,” he explained.

Questioned on the feasibility of the new arrangement, Harmon said, “We do not see or feel that this arrangement will put in jeopardy any of the users of petrol/fuel in the country, in fact, it is feasible, the terms are very favourable for us and I believe that we have a commitment from that country for the supply of petrol. The financial arrangement is no less favourable than that which we receive under the PetroCaribe agreement.”     Trinidad and Tobago is aware of Guyana’s arrangement with Venezuela through the PetroCaribe agreement. In the event there is a shortfall or a problem with that agreement, the Trinidad facility will be there to cushion the effect.

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Guyana Pursues Diplomatic Option with Venezuela

(GINA, 9.Jul.2015) – Guyana’s President David Granger reiterated that diplomacy will remain as his country’s first option as it stands resolute against all forms of aggression.

“We have never, as an independent state, provoked or used aggression against any other nation, we have never used our political clout to veto development projects in another country,” said Granger, speaking during an address to the country’s National Assembly about the territorial claims made by Venezuela.

Granger said, Guyana has never discouraged investors willing to invest in another country, never stymied development of another nation state and as such “does not expect and will we condone, any country attempting to do the same to us.”

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Guyana Suggest Venezuela Desist Actions

(Guyana Foreign Affairs Ministry, 28.Feb.2015) – Guyana’s Ministry of Foreign Affairs wishes to inform that consequent upon a communication being sent from the Venezuelan Foreign Minister to the Country Manager of Esso Exploration and Production Guyana Limited objecting to the despatch of a rig to proceed with the exploration of an oil well in the concession granted by the Government of Guyana, the Government of Guyana has despatched a Note Verbale to the Venezuelan Foreign Ministry.

The Ministry of Foreign Affairs has requested that the Government of the Bolivarian Republic of Venezuela desist from taking any actions that could only result in the stymying of the development of Guyana and its people and that would be in contravention of international law.

The Ministry has also informed CARICOM, UNASUR, the OAS, the Commonwealth as well as the United Nations Secretary General about this recent action by Venezuela.

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