On the cusp of becoming a petro-state

Bert Wilkinson | 12/26/2019, new york- amsterdam news

CARICOM’s largest and most resource-rich state is about to become the world’s newest oil producer before the end of 2019 as an international consortium led by American oil titan ExxonMobil prepares to begin producing its first crude barrels from below the seabed.
The Texas-based supermajor said that most of the safety testing systems of underwater piping equipment were completed in the deepwater Atlantic Ocean block amid concerns about high seas and excessive rainfall. Exxon and partners Hess Corporation and Nexen could conspire to give Guyana a rich Christmas gift.

After decades of exploration by a slew of IOCS, commercial quantities of petroleum were discovered in May 2015 sparking a rush by the worldclass petroleum producers to Guyana as Exxon reported substantial quantities of sweet light crude requiring limited refining from its giant Liza 1 field.

Since then, the consortium drilled 15 commercial wells in its Stabroek Block, encountering an extraordinary strike rate with only two dry wells when drillships explored for hydrocarbons. 120 miles north and northeast of the capital, Georgetown, close to the Suriname border. The finds excited global mega firms with offshore concessions east of Guyana but no successful wells have been drilled so far. Currently producing about 16,000 barrels daily onshore, it is only a matter of time before Suriname finds oil offshore.

WIth production, Guyana joins Trinidad, to the northwest, Barbados and Suriname as producers in the 15-nation CARICOM. The Guyana finds stimulated authorities in Jamaica, Grenada, Barbados and The Bahamas who have boosted offshore exploration or offered exploratory permits. Jamaica reported surface sea oil seeps off its southern coast and seepages of crude from areas inland. Jamaica may be the next in line to declare success.

Guyana’s Department of Energy arranged face-to-face bidding with global companies to help deal with its first three lifts of its share of the crude. The Exxon consortium, British Petroleum, Chevron, Shell, Total of France and ENI of Italy were invited to the sessions. Energy czar Mark Bynoe reported that their well developed expertise in oil refining and marketing could help inexperienced Guyana .

The de-risking and popularity of the prolific Guyana Basin continued when Tullow Oil of the United Kingdom successfully drilled two wells near Stabroek Block . It plans to sink several more exploratory wells in the new year. Similar plans are in train by Repsol of Spain and CGX Energy of Canada whose concessions are close to the Suriname border.

Commercial fields place Guyana as one of the most exciting places to explore for hydrocarbons. Exxon will produce about 120,000 barrels of oil per day when its early production systems settle down in 2020. That start-up figure will almost triple the daily production of Trinidad, an oil producer for over 100 years. Exxon will store the oil on a massive Floating Production Storage and Offloading vessel (FPSO). Crude will be transported to markets by visiting tankers.

National Petroleum Day

(Bloomberg) – Exxon Mobil and its partners lifted the first commercial crude from Guyana, setting the new producer on a path to potentially vast flows of oil revenues.

Exxon has a 45% share in the Guyana project, while Hess Corp. has 30% and China’s CNOOC Ltd. 25%. Output from the first phase of the offshore Liza field is expected to reach full capacity of 120,000 gross bopd in coming months, with the first cargo to be sold within several weeks.

The caretaker president declared December . 20 “National Petroleum Day,” and hailed a 10-year government plan to create oil-related jobs and boost the economy. “Your government will manage petroleum revenues prudently to ensure fiscal discipline, financial sector stability, sustainable levels of public debt and low inflation,”

At least five FPSOs are expected to produce over 750,000 gross bopd from the Stabroek block by 2025. The amount of oil to be produced means that Guyana, with a population of under 800,000, may end up producing more crude per person than any other country in the world. How it benefits from that wealth is still an open question. While the country established a sovereign wealth fund, it has been slow to develop regulations to govern the sector and has no set plan on how the money will be spent.

Guyana will head to the polls in March for a presidential election that pits the incumbent coalition against the People’s Progressive Party, which held power for 23 years until 2015.

SInce December 20th when ExxonMobil announced its first ‘lift’ from Liza 1 well to December 23 when it reported a fifteenth oil discovery at the Mako-1 Well southeast of the Liza field in Stabroek Block, Guyana led international headlines as never before. The new oil find, was third on the list of news in World Oil, claiming that Guyana is now set “on a path to potentially vast flows of oil revenues.”

Guyana heard that over fourteen oil find reports, so that ‘first oil’ and the fifteenth Exxon oil find created more muted responses, amid a proclamation declaring December 20th National Petroleum Day.

Monday March 2 is of even greater significance. The outcome of the poll will determine whether the ruling regime or the opposition People’s Progressive Party will have the first tilt at managing the oil revenues.

With oil production launched, numbers become paramount.. Exxon has a 45% share in the Guyana project, while Hess Corp. has 30% and CNOOC Ltd. 25%. Output from the first phase of Liza-1 field is expected to reach full capacity of 120,000 gross barrels per day (bpd) in the coming months, with the first cargo to be sold within weeks.

Isolated from updates on oil production, the public feel entitled to a more continuous flow of news on the sale of first oil, the returns and management of the sector. With production over 750,000 barrels of oil per day (bopd) by 2025, the key issue is how the country will benefit from oil wealth. While it has a sovereign wealth fund, it has few regulations to govern the sector and no plan on how the money will be spent. Government has taken steps to safeguard the national interest, “government will manage petroleum resources prudently………following a balanced approach, prioritizing investment inhealth, infrastructure, security, social protection and other social services… “supporting the private sector.”

The political opposition, and particularly the PPP continue to challenge its ability to prudently manage the oil and gas sector between now and the outcome of the general elections.

The private sector stepped up its lobby for “an enabling environment” in which local businesses can take advantage of significant Local Content opportunities derived from the new oil and gas sector. The poorer populace clamour for immediate poverty-alleviation response from government. Both major political parties are reluctant to commit to the idea.

International exposure for the vast oil resources grew when World Oil reported yet another major oil discovery offshore Guyana at the Mako 1 well, southeast of the Liza field, “marking the 15th discovery in the Stabroek block. The discovery adds to the previous estimated recoverable resource of over 6 billion oil-equivalent barrels on the Stabroek Block. ExxonMobil said that “new discoveries in this world class basin have the potential to support additional developments.” Pending government approvals and project sanctioning of a third development, production from the Payara field north of the Liza discoveries could commence as early as 2023.

Guyana is already reaping booming benefits from local, regional and international investors in supporting companies, tax revenues, foreign aid, donations for education, grants, services and tourism.

The first priority of government is to focus on law and order to curb crime and a murder rate above the national average.

Guyana gains final payment as Norway releases $9.1B

December 24, 2019

THE Kingdom of Norway released $393.4M Norwegian Kroner or G$9.1B to the Guyana REDD+ Investment Fund, administered by the World Bank, is used to finance developmental projects in Guyana.

The Project Management Office confirmed that the final disbursement by the Kingdom of Norway was made. According to him, the funds were released to the World Bank which issued a confirmation that the funds had been received.

Funds will be used for projects in renewable energy, ‘green’ tourism, biodiversity, strengthening of indigenous mechanisms, and the European Union- FLEGT Voluntary Partnership Agreement (VPA) Partnership, a legally-binding trade agreement between the European Union and a timber-producing country outside the EU.

Guyana will also enter a new round of talks with the Norwegians to support the Green State Development Strategy (GSDS) and especially those environmental safeguards that can realise a ‘green’ economy.

“These fruitful developments are possible owing to the hard work of several ministers and especially the Minister of State under whose purview the Guyana REDD+ Investment (GRIF) falls under; other government agencies, Non-Governmental Organisations (NGOs), Indigenous Peoples’ representation among others. A special thank you as well to you to the Kingdom of Norway. Project development can now move ahead assiduously for the full realisation of long-awaited benefits to the Guyanese people. From a slow start and a past of penalty to the tune of USD$15M before this government took office, the Guyana Norway Agreement can now boast of satisfactory results.”

The transfer was made possible following a meeting between Minister of State, Dawn Hastings-Williams, and Norway’s Minister for Climate and Environment, Ola Elvestuen, in September on the margins of the United Nations Climate Summit in New York.

Norway had agreed to pay over the $393.4 Norwegian Kroner or approximately US$50M of climate funds to Guyana, which represents the remainder of the pledge made by that country in 2009.

In accordance with the bilateral agreement between the two countries, the two ministers had agreed that Guyana stood by its commitments and Norway should disburse all final payments. Minister Hastings-Williams acknowledged that at this juncture, both countries would have met their responsibilities with the final release.

In signing a Memorandum of Understanding (MoU) with the Government of Guyana on November 9, 2009, the Government of Norway committed to providing financial support of up to USD$250M until 2015 for results achieved by Guyana in limiting emissions from deforestation and forest degradation, which will support the implementation of the country’s then Low Carbon Development Strategy (LCDS). As part of the agreement, the two countries agreed to establish the GRIF as the financial intermediary mechanism for the performance-based payments from contributors to Guyana.

The Guyana REDD+ Investment Fund (GRIF) represents an effort to create an innovative climate finance mechanism which balances national sovereignty over investment priorities, while ensuring that REDD+ funds adhere to the Partner Entities financial, environmental and social safeguards.

Impressed with the government’s 2025 energy-mix proposal, the country’s deforestation rate of 0.05 – one of the lowest and its role in championing sustainable development – Norway unlocked billions of dollars under the Norway Forest Agreement.

The funds would be directed towards intensified efforts to achieving 100 per cent renewable energy use, which includes the construction of solar farms totalling 100 megawatts. These farms will be located in Bartica, Lethem, Mabaruma, Mahdia and several interior locations.
In the past, the funds were used to finance projects such as the ICT Access and e-Services for Hinterland, Poor and Remote Communities Project. Guyana’s Green State Development Strategy underscores the importance of fostering sustainable development in the hinterland regions and a key component in achieving such outcome is the linking of public services and information flows to the deployment and use of new Information and Communications Technologies (ICTs).

It was against that backdrop that the ICT Access and e-Services project was initiated in December, 2017 to the tune of US$17M funded by the Guyana REDD+ Investment Fund (GRIF).

Vacancy for Vice-Chancellor of University of Guyana

Submitted by Maggie Reece on Tue, 12/10/2019 – 16:08

Vacancy for Vice-Chancellor/Principal
The University of Guyana is seeking submissions for the following vacancy: Vice-Chancellor/Principal.

Please see attachment for official information, below is the text.

The University of Guyana is seeking submissions for the following vacancy: Vice-Chancellor/

The University of Guyana is a State Institution founded in 1963 with a current enrolment of 8000+ students in seven faculties and one school on two campuses. It is financed through government subventions, tuition fees and some grant funding. The University is on the verge of a change process towards a revised regulatory framework, diversification of funding sources, and curriculum review in the interest of deeper national development and student engagement.

Requirements
Candidates must be of high academic standing and have considerable experience in university administration. He/she should have the credibility to lead an academic community and to work effectively with the University’s many stakeholders. He/she should demonstrate knowledge of the issues pertinent to higher education in a developing country such as Guyana and should evince capability of providing leadership in the development and delivery of tertiary level curricula relevant to the needs of the national, regional and international community.

Role of the Vice-Chancellor

The Vice-Chancellor is responsible for leading and managing the University’s academic, operational and external affairs – shaping, articulating, and implementing the University’s strategic objectives in research, education, and contribution to public policy development.
The Vice-Chancellor is appointed by the University Council, is responsible through the Chancellor and Chairman of the Council for the leadership and management of the University and works closely with the Council in the exercise of its governance roles of strategic oversight, ensuring effective overall management and ensuring responsible financial management. The Vice-Chancellor is therefore accountable to the Council for the implementation of all its decisions.
The Vice-Chancellor must be able to clearly articulate the vision of the University of Guyana as Guyana’s national University, focusing on achieving critical mass and concentration in research disciplines of national importance. He/she must lead the University in providing the highest quality teaching and learning environment, responding innovatively to the changing needs of students and equipping them with the skills to be the leaders of tomorrow, nationally, regionally and internationally.
The Vice-Chancellor is responsible for leading a large and diverse organisation in such a manner as:

1. To develop and manage the human, financial, and physical resources of the University to meet its strategic goals;
2. To ensure the r1sk management and compliance programmes across the University’s diverse functions, activities and entities meet the highest standards of ethics, financial probity and corporate governance;
3. To ensure that the critical relationships with key stakeholders within the University community – including statutory officers, staff and students, unions and alunmi – are enhanced and maintained and are always in accordance with the provisions of the University Act, Statutes, and Policy Directions of the University Council.
4. To ensure that the University meets all requirements for national registi·ation;
5. To ensure that the University meets all requirements for relevant accreditation and maintains such accreditation where necessary.
6. The Vice-Chancellor is responsible for leading effective engagement with government at all levels, and with other external stakeholders in the political, business, education, philanthropic, and national communities.
7. He/she is responsible for maintaining and enhancing the University’s reputation through effective communication and advocacy, directly and through the media, to all relevant stakeholders and the general public.
8. He/she must foster and develop strategic alliances and partnerships both nationally and internationally, including sti·engthening key alliances with selected universities.

Submissions
Applications are invited from suitably qualified persons. Salary is negotiable. A package of additional benefits is offered. Applicants should provide a full curriculum vitae and the names of and contact information of (3) three referees with whom he/she has interacted with over the past 3-5 years.

Applications should be addressed to:

Vacancy for Vice-Chancellor
c/o Registrar for the University of Guyana
P.O. Box 101110
Greater Georgetown
Guyana

or via email at vc.jobapplications@uog.edu.gy
to arrive no later than January 31, 2020

Stabroek oil will be priced against Brent benchmark

Dec 08, 2019

Stabroek oil will be priced against an oil price benchmark based on oil from the North Sea basin, a prolific hydrocarbon province in Northwestern Europe. A workshop hosted by ExxonMobil and the Guyana Press Association (GPA), to train local media on reporting on the Petroleum sector heard that oil found on the Stabroek Block is characteristically similar to North Sea Crude.

The price of a barrel of North Sea crude is calculated based on a competitive set of crudes extracted from fields in the North Sea. West Texas Intermediate comes from onshore US oilfields. Typically, oil in the West is compared against the two major benchmarks, North Sea Brent and West Texas Intermediate. These are needed by producers and traders because crude oil has differing quality and availability.

Both benchmarks are based on light and sweet oil, meaning that they have low density and relatively low sulphur content.
While West Texas Intermediate is slightly lighter and sweeter than North Sea Brent, an advantage to the latter is that it is extracted offshore and is therefore easier to transport, while West Texas Intermediate’s onshore location makes transportation more costly.
North Sea Brent’s location therefore makes it easier for producers to meet rising demand.
North Sea Brent is the leading global price benchmark for Atlantic Basin oils, and its price is higher than West Texas Intermediate. Oil prices are affected by many variables, such as political uncertainty. The difference between Brent and West Texas Intermediate could widen or shrink due with those variables.

Exxon victory in climate claim

Dec. 10, 2019 10:17 AM ET|By: Carl Surran, SA News Editor

Exxon Mobil emerged victorious in the securities fraud trial that examined its internal accounting for the financial risks of climate change, in a striking rejection of claims by the New York attorney general that the company misled investors for years.

Finding XOM not guilty of fraud, New York Supreme Court Justice Ostrager writes that “the office of the Attorney General failed to prove, by a preponderance of the evidence, that Exxon Mobil made any material misstatements or omissions about its practices and procedures that misled any reasonable investor.”

XOM’s victory was foreshadowed when the AG dropped two of its four claims on the final day of the trail; the abandoned claims had been important to the state’s case because they held that XOM’s misstatements were part of a scheme to mislead and that investors had relied on them when buying the company’s stock.

New York Loses Climate Change Fraud Case

New York Times. Dec. 10, 2019

New York state judge Barry Ostrager handed Exxon Mobil a victory
in the civil case brought by the state’s attorney general that argued the company had engaged in fraud through its statements about how it accounted for the costs of climate change regulation.

After four years of investigation and millions of pages of documents produced by the company, the judge said attorney general Letitia James and her staff “failed to establish by a preponderance of the evidence” that Exxon violated the Martin Act, New York’s powerful legal tool against shareholder fraud.

Hailing the victory, Exxon said the suit was politically motivated.

“Today’s ruling affirms the position Exxon Mobil has held throughout the .. baseless investigation. We provided our investors with accurate information on the risks of climate change.

“Lawsuits that waste millions of dollars of taxpayer money do nothing to advance meaningful actions that reduce the risks of climate change. Exxon Mobil will continue to invest in researching breakthrough technologies to reduce emissions while meeting society’s growing demand for energy.”

Throughout the 12 days of hearings, there were indications that the judge might rule against the state. He seemed impatient with the presentation by the attorney general’s staff, and was fully engaged in the testimony from the company’s former chairman, Rex Tillerson.

In the lawsuit against the company, filed last year the state argued that Exxon had erected “a Potemkin village to create the illusion that it had fully considered the risks of climate change regulation and it had factored those risks into its business operations.”

The state argued that Exxon was essentially keeping two sets of books in regard to climate change: one presented to the public that accounted for the potential future costs and another internal set in which those costs were disregarded. The state was asking for as much as $1.6 billion to be paid in restitution to shareholders.

Ms. James said, “For the first time in history, Exxon Mobil was compelled to answer publicly for their internal decisions that misled investors.”Acknowledging the loss, she said, “Despite this decision, we will continue to fight to ensure companies are held responsible for actions that undermine and jeopardize the financial health and safety of Americans across our country, and we will continue to fight to end climate change.”

Exxon’s lead attorney, Ted Wells, Jr., countered that the company had developed a “robust” system for dealing with future climate costs, and that its statements about its accounting for such costs were not misleading.

.The judge, who called the attorney general’s lawsuit “hyperbolic” in his decision, accepted Exxon’s argument that its internal practices to evaluate the possible costs of regulations of greenhouse gases on future projects “do not impact the company’s financial statements and other corporate books and records” at issue in the shareholder fraud charges. The state had presented no testimony that any shareholder had been misled and a company report that the state had argued was misleading was, based on evidence presented at trial, “essentially ignored by the investment community.” As a result, , the company had not made “any material misrepresentations” that would have misled a reasonable investor.

Judge Ostrager was careful to point out that the decision did not touch on the fossil fuel company’s possible role in global warming. “Nothing in this opinion is intended to absolve Exxon Mobil from responsibility for contributing to climate change in the production of its fossil fuel products,” he wrote. “But Exxon Mobil is in the business of producing energy, and this is a securities fraud case, not a climate change case.”

Merritt B. Fox, a professor of securities law at Columbia Law School, said that statement from the judge was “the gist of the decision,” because “the Martin Act is about securities fraud, not about evildoing by large corporations generally.” The Martin Act gives attorneys general enormous power to launch investigations, and in many cases the investigations reveal embarrassing details that lead the target company to agree to a broad settlement with promises to alter their behavior in some way unrelated to securities. “This time, Exxon Mobil stuck to its guns, and the judge applied what the statute and law require: a demonstration of securities fraud by a preponderance of the evidence.”

The Martin Act was, ultimately, not right for this case, said Michael Gerrard, director of the Sabin Center for Climate Change Law at Columbia.

This is not the end of legal entanglements for Exxon Mobil and other fossil fuel companies over climate change.

While regulators monitor the industry, overpopulation is the key challenge and main environmental polluter.

SURVIVAL OF THE FITTEST

As Exxon Mobil becomes more active in the Permian with its fleet of 55 rigs and others, especially suppliers, benefit from its deep pockets, long-term steady hand, high safety standards and environmental focus, the company can surmount PTSD from bruising legal battles for which it was targeted as representative of all hydrocarbon producers, shake off excess caution and learn more nimbleness from fellow Permian operators.

Economic planning

The new oil producer will gain more attention from other states, investors and institutions as ‘Cinderella ’ enters oil “Royalty” earning significant incomes.

Development will be easier through systematic and proper economic, social and physical planning. The most important implication of ‘first oil’ is the promise or hope that it brings. First, is the prospect of a dramatic increase in the country’s total annual income, its ability to export and capacity to import to increase state income to enhance the wellbeing of citizens and to improve their standard of living by purchasing more and better goods and services.

With the income for the treasury managed by the Sovereign Wealth Fund (SWF), government will gain more leeway to focus on employment, training, health, education and production improvement.
Key aspects to be addressed include skill level improvement in all sectors, public infrastructure development, improvements to public services and security and safety in public life. Guyana has grappled with the challenge of emigration over the years and low levels of productivity in existing industries but with greater resources, the educational curricula, which include vocational and technical training, can be made more relevant.

Diversification requires investment “…the main constraint on investment – and foreign investment in particular – is poor and insufficient infrastructure such as roads, electricity, pure water supply and physical infrastructure such as transport facilities. Part of the problem is also low consumer incomes. Enhanced incomes can assist in the setting of higher standards of packaging and health standards …”

The greatest priority is physical planning which includes strategic road-building and traffic control which is consistent with the growth of pedestrian traffic and motor vehicles. Economic planning will ensure consistency in the activities of state agencies and those of the private sector, including banking, export promotion in line with export market opportunities and processing facilities consistent with health standards. Priorities for expenditure of the funds received ought to support main priorities in line with breaking the bottlenecks. None of this is magic…attention will need to be paid to many of the areas currently neglected if the petroleum sector is to prosper.

One Minister looks forward to oil production leading to a modern Guyana which affords equal access to the same services. First oil is one of the best things that has happened since the three counties were merged in July 21, 1832. This generation is fortunate to have the privilege of transforming Guyana into a developed equitable society in which all of its citizens will be afforded a genuine equal opportunity at development.

Thousands of residents from hinterland communities have been connected to the Internet through means such as the Information and Communications Technology (ICT) access and e-services for Hinterland, Poor and Remote Communities (HPRCs) pilot project.
Through other projects, tertiary institutions, government ministries and agencies have been connected with free Internet.

From a technological development perspective, increased revenues to this industry will not only reduce the technological deficit between hinterland and coastal communities, develop and expand other sectors, but offers to catapult Guyana into a modern advanced state-of-the-art country with the opportunity to realise the potential generations have dreamed of with this glorious gift.

British High Commissioner, Greg Quinn stated that while it will take some time to begin to see the real benefits, Guyana stands to benefit largely from oil.
“First oil is a wonderful thing and a good thing for this country but the important thing is that everybody from Guyana, down to the smallest village in the Deep South, from the west to the east, everybody needs to benefit from oil. What oil will do is provide the funding for the building of the infrastructure facilities, hospitals, social services, and that’s where we all need to be looking up going forward…I certainly believe that with the amount of money that will come into this country with the amount of oil, everybody should and everybody will feel the positive benefits.”

Start of Lands and Surveys Commission’s US$18M remapping project delayed

December 10, 2019

The Guyana Lands and Surveys Commission (GLSC) is embarking on a national remapping exercise after more than half a century but the scheduled start was delayed after a laptop was allegedly stolen from the company contracted to execute the project.

The laptop has since been replaced and the project is expected to commence soon in regions One and Four. The mapping exercise is part of a US$18 million project that will aid the commission in determining how much land is available and consequently guide decision-making when considering development projects.

At the end-of-year press conference, GLSC said that the laptop, which belongs to North West Geomatics Ltd of Canada,y, was “illegally removed” from a company plane. After the contractors arrived in Guyana with the intention of starting the mapping exercise but were unable to do so after the alleged theft.

Four GLSC employees were fired this year for corruption.

Tullow Oil CEO quits

(Bloomberg) – Tullow Oil’s CEO and exploration director quit after the company cut its production outlook and suspended the dividend. The shares tumbled, deepening their loss for the year to over 60%.

CEO Paul McDade and exploration chief Angus McCoss resigned with immediate effect, marking the exit of Tullow’s old guard after founder Aidan Heavey departed last year. Both had been stalwarts at the company for over a decade, presiding over discoveries from West Africa to Guyana, but also a slew of recent operational setbacks.

“Whilst financial performance has been solid, production performance has been significantly below expectations from the group’s main producing assets, the TEN and Jubilee fields in Ghana,” London-based Tullow said . Group output next year is forecast at 70,000 to 80,000 bpd — down from the 87,000 bpd expected for this year — and production for the following three years will hover around the bottom of that range.

RBC Europe Ltd said “This is likely to have a negative impact on the valuations of Tullow’s key assets. We expect the pace of exploration activity, and therefore news flow, to be reined in.”

The executive departures come after a year of disappointments at Tullow, where technical difficulties have hampered output in Ghana, projects in Uganda and Kenya have faced delays, and results from wells in Guyana missed expectations. The company reduced its 2019 production forecast several times as the glitches in Ghana dragged on.

The shares sank 57% to 60.64 pence as of 10:28 a.m. London time, the biggest decline since they started trading in the city 30 years ago. The stock has dropped 66% this year and more than 90% since 2012. Tullow’s dollar notes due 2025 declined the most since they were issued in March 2018.

“There is a risk that the market will lose sight of the true value of our underlying assets,” interim Chairman Dorothy Thompson said. Jubilee development and Uganda reserves remain world-class oil fields. The company is conducting a review “to create a sustainable business, which we believe we can do,” She declined to comment on whether Tullow is actively seeking buyers, but reiterated the standard position that the company would always be open to any offers that were attractive to shareholders.

The surprise CEO resignation, dividend suspension and revision of production guidance cast a “dark shadow over the company’s outlook,” while the start of a strategic review “increases the likelihood of an eventual sale of the company,” said Bloomberg

Mark MacFarlane, executive vice president of East Africa and non-operated, has been appointed chief operating officer in a non-board role. Les Wood continues as chief financial officer. The board has started a process to find a new CEO and is talking to internal and external candidates.

Board changes and 2020 guidance

Published on: 09 DECEMBER 2019

Tullow Oil plc (Tullow) provided a forward-looking production and financial update and announces a number of changes to the Board that take effect immediately.

GH_press release_FPSO-onboardl_713x476

BOARD CHANGES

Paul McDade, Chief Executive Officer, and Angus McCoss, Exploration Director, have resigned from the Board of Tullow by mutual agreement and with immediate effect. Dorothy Thompson has been appointed Executive Chair on a temporary basis and Mark MacFarlane, Executive Vice-President, East Africa and Non-Operated, has been appointed as Chief Operating Officer in a non-Board role. Les Wood continues as an Executive Director and Chief Financial Officer. The Board has initiated a process to find a new Group Chief Executive.

GROUP GUIDANCE
PRODUCTION AND RESERVES
As disclosed in Tullow’s Trading Update on 13 November 2019, the Group expects 2019 full year net production to average c.87,000 bopd. The Group also expects to deliver free cash flow of c.$350 million, has liquidity headroom in excess of $1 billion and no near-term debt maturities. Whilst financial performance has been solid, production performance has been significantly below expectations from the Group’s main producing assets, the TEN and Jubilee fields in Ghana.

A review of the production performance issues in 2019 and its implications for the longer-term outlook of the fields has been undertaken and has shown that the Group needs to reset its forward-looking guidance. 2020 Group production is forecast to average between 70,000 and 80,000 bopd. Group production for the following three years is expected to average around 70,000 bopd. A breakdown of 2019 and 2020 Group production guidance is provided at the end of this release.

A number of factors have been identified that have caused this reduction in production guidance. On the Jubilee field, these factors include significantly reduced offtake of gas by the Ghana National Gas Company which Tullow makes available at no cost, increased water cut on some wells, and lower facility uptime. At Enyenra (one of the TEN fields) mechanical issues on two new wells have limited the well stock available and there is faster than anticipated decline on this field. The non-operated portfolio is performing well, and production is expected to be sustained for the medium term.

Independent reserves audits carried out during the year indicate that oil reserves are likely to remain broadly flat at year-end 2019 compared to the previous year-end (excluding the impact of 2019 production). The audits show increased oil reserves for Jubilee, Ntomme (one of the TEN fields) and the non-operated fields which are largely offset by a c.30% decrease in Enyenra reserves.

TAKING ACTION TO UNDERPIN CASH FLOW GENERATION
In light of these new production forecasts, there will be a thorough reassessment of the Group’s cost base and future investment plans in order to allocate appropriate capital to the Group’s core production assets, development projects and continued exploration.
The Board believes that a series of actions will help deliver sustainable free cash flow. These actions include reducing capital expenditure, operating costs and corporate overheads. In 2020, the Board expects the Group to generate underlying free cash flow of at least $150 million at $60/bbl after a Group capital investment of c.$350 million. Considering this level of expected free cash flow, the Board has decided to suspend the dividend.

Dorothy Thompson, Executive Chair, commented today:
“I would like to thank Paul and Angus for all their hard work and dedication to Tullow over many years. They leave behind a business that has delivered two major offshore developments in Ghana, made significant oil discoveries in Kenya and Uganda and has a high-impact exploration portfolio. These remain the key building blocks of our business today.

“The Board has, however, been disappointed by the performance of Tullow’s business and now needs time to complete its thorough review of operations. A full financial and operational update will be provided at Tullow’s Full Year Results on 12 February 2020, with an update on progress to be given in the Group’s Trading Statement on 15 January 2020.

“Despite today’s announcement, the Board strongly believes that Tullow has good assets and excellent people capable of delivering value for shareholders. We are taking decisive action to restore performance, reduce our cost base and deliver sustainable free cash flow.”

2019 & 2020 PRODUCTION

ADDITIONAL INFORMATION
The drilling of the Carapa-1 well on the Kanuku Block in Guyana continues, with a result expected before the year-end. Carapa-1, operated by Repsol, is the first well to test the deeper Cretaceous play in Tullow’s Guyana acreage.

Set out below is a summary of the terms relating to Mr McDade’s and Mr McCoss’ departure from Tullow. These terms are in line with Tullow’s shareholder-approved 2017 Remuneration Policy. Save as set out below, Mr McDade and Mr McCoss will not receive any compensation or payment for the termination of their employment agreements or for their ceasing to be directors.

• In connection with the termination of their employment, Mr McDade and Mr McCoss will receive a payment for salary and pension contributions in lieu of their contractual notice period; continued private healthcare insurance coverage for up to 12 months; and capped contributions towards both their legal fees and the provision of outplacement services.
• Neither Mr McDade nor Mr McCoss will receive any cash or share-based awards under the Tullow Incentive Plan (the TIP) in respect of the financial years ending 31 December 2019 or 31 December 2020.
• In respect of the TIP, the Remuneration Committee has determined (in accordance with the good leaver provisions of the TIP) that Mr McDade’s and Mr McCoss’ unvested awards may continue to vest on their scheduled vesting dates, subject to the terms of the TIP. In respect of the Tullow Share Incentive Plan (the SIP), the shares which Mr McDade and Mr McCoss hold already pursuant to the SIP will be released on termination of employment.

Further details of the remuneration payments to be made to Mr McDade and Mr McCoss, in accordance with s430(2B) Companies Act 2006, can be found on Tullow’s website (www.tullowoil.com).

This announcement includes inside information as defined in Article 7 of the Market Abuse Regulation No. 596/2014 and is being released on behalf of Tullow by Adam Holland, Company Secretary.

118 staff to protect revenue

Dec 07, 2019

Guyana Revenue Authority (GRA) trained 118 officials in Oil and Gas audit techniques, Crude Lifting Agreements, Oil and Gas accounting, Customs Documentation and Associated Processes; and Crude Lifting Measurements. The Oil and Gas Department will deal with both customs and revenue related to the industry. The Petroleum Revenue Audit Unit (PRAU) and the Customs Petroleum Unit (CPU) will be led by Deputy Commissioners.

The Units are being staffed and given the resources to monitor, audit and ensure compliance by oil companies is optimal at all times, following a Consultant’s report from the United States Overseas Technical Assistance, the UK government, and the International Monetary Fund (IMF).
An in-house Consultant paid by the IMF and another development partner provide constant training in audit techniques to staff of the Revenue Audit Unit.
For the Petroleum Unit, the IMF provided recommendations in a Mission Close-Out Report which is currently being implemented in two phases: an incubator transitional facet and the creation of a permanent Customs Petroleum Unit.
Efforts aimed at fine tuning preparation for an adequate responsive Unit is underway with the IMF guiding the process. Standard Operating Procedures (SOPs) are being developed and fine-tuned in relation to Crude Lifting, which will cover from Notification of Lifting Schedules to reporting formats onshore and offshore, and further alignments for fiscal and revenue collection purposes. GRA officials are working alongside
IHS Markit of the UK awarded the contract to conduct the cost audits being incurred by ExxonMobil and its partners on the Stabroek Block, with the objective of assisting the Authority to develop its capabilities.
GRA is also developing appropriate regimes of Customs Areas and Sufferance Wharves in order to monitor and facilitate imports, exports, transits and transshipment of goods from the designated Shorebase facilities.
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ExxonMobil sponsors STEM

December 3, 2019

ExxonMobil Guyana contributed GYD$20M andjoined the Volunteer Youth Corps (VYC) Inc. to stage the 7th STEM Conference, part of its ongoing commitment to the advancement of science, technology, engineering and mathematics (STEM) education. 400 pupils participated under the theme “Present Innovators, Future Creators,” from 11 Secondary schools implementing the STEM after-school programme facilitated by VYC Inc. expected to run from September 2019 to June 2020.

ExxonMobil Guyana’s Wells Execution Manager Ryan Turton shared his love for STEM and its impact on his career. Turton, who has degrees in Aerospace Technology and Mechanical Engineering, has worked with ExxonMobil for 13 years in four different countries on four continents. When considering a career choice engineering was a natural fit. “Growing up on a farm gave me a very practical view of the world and engineering was a career that allowed me to apply fundamental science and mathematics, coupled with technology to solve real world challenges.”

He spoke of ExxonMobil Guyana’s commitment to the social and economic advancement of Guyana by building capacity through activities such as the STEM conference. “This STEM programme is part of a long standing partnership with the Volunteer Youth Corps, and by investing in joint efforts such as this we are helping students develop the knowledge and skills to succeed in college and future careers.”

A team of engineers from ExxonMobil Guyana joined students throughout the day to participate in exercises and experiments.

ExxonMobil Guyana has partnered with VYC Inc to implement STEM education in schools since 2012. In the after-school programme students are exposed to practical lessons in Physics, Chemistry, Integrated Science and Information Technology. There is also a three-day Science Camp at a local environmental facility.

IMF Enhanced General Data Dissemination System

December 19, 2019

Guyana has implemented the recommendations of the IMF’s Enhanced General Data Dissemination System (e-GDDS) by publishing essential data through the National Summary Data Page (NSDP).

The e-GDDS was established by the IMF in 2015 to support improved data transparency, encourage statistical development, and help create synergies between data dissemination and surveillance. The NSDP is a national “data portal” that serves as a one-stop publication vehicle for essential macroeconomic data on the national accounts, government operations and debt, monetary and financial sector, and balance of payments.

The NSDP is hosted by the Guyana Bureau of Statistics, utilizing the Statistical Data and Metadata Exchange. A link to Guyana’s NSDP is available on the IMF’s Dissemination Standards Bulletin Board. The NSDP contains links to statistics published by the Guyana Bureau of Statistics, the Central Bank and the Ministry of Finance.

Publication of essential macroeconomic data through the NSDP will provide national policy makers and domestic and international stakeholders, including investors and rating agencies, with easy access to information critical for monitoring economic conditions and policies. Making this information easily accessible in both human and machine-readable formats will allow users to have simultaneous access to timely data and bring greater data transparency.

Louis Marc Ducharme, Director of the IMF Statistics Department, welcomed this major milestone in the country’s statistical development: “I am confident that Guyana will benefit from using the e-GDDS as a framework for further development of its statistical system.”

IMF Communications Department
MEDIA RELATIONS
PRESS OFFICER: PEMBA SHERPA

PHONE: +1 202 623-7100EMAIL: MEDIA@IMF.ORG

@IMFSpokesperson