Payara Field Development Plan

New Minister of Natural Resources, Vickram Bharrat, does not envisage that assessment of Payara Field Development Plan review, due for completion this week, should cause concern to the Exxonmobil consortium.

“Remember, we had said, initially, that we know that it’s a tight timeframe but we will not compromise the integrity of the work that they’re doing.”

The team of international experts led by Canadian Alison Redford, QC was expected to complete the exercise on August 24, 2020. Under the previous regime., the Department of Energy (DE) contracted Bayphase Oil and Gas Consultants to review the Payara Development Plan. The new government decided to scrutinise the work undertaken by the DE to ensure it protects the interest of all stakeholders and adheres to international transparency and accountability standards.

In July, Senior Vice-President, Neil Chapman told ExxonMobil 2020 Annual Shareholders Meeting that if the Payara Development Project was not approved soon to allow for a Final Investment Decision (FID), at least by September 2020, weather conditions may delay the project further by months.

Bharrat said: “They would have mentioned that to me and that’s why we are trying to meet an agreed timeframe. So, we would have actually given ourselves a stricter timeline so that there is always leeway for the consultant to wrap up what they’re doing.”

Esso Exploration and Production Guyana Limited (EEPGL), a subsidiary of ExxonMobil, was initially seeking approval for the Payara Development Project Environmental Impact Assessment (EIA) and Field Development Plan ahead of 2020.

The project, located in the eastern half of the Stabroek Block, includes drilling of up to 45 development wells over five years, initially pegged to begin in 2020 and initial production by early 2023.

Despite the delays, representatives of ExxonMobil Guyana have been cooperating with the international experts and progress is smooth.

“We are in contact with the company as well too because the consultants are working with them. Remember, to review the licence, you need to speak on a regular basis with the company. So, they’ve been engaging the company. I think this afternoon they’re meeting with ExxonMobil again to iron out a few issues. It’s going smoothly, there are just a few issues, environmental issues, and we’re trying to work with the company to find a solution towards same. I don’t see a problem moving forward.”

One of the known environmental issues is offshore flaring. ExxonMobil’s responsibility to the environment was in the spotlight during issues with its gas compressor after it increased production in mid-May. Key specialist technicians were required to repair the units but, due to the pandemic, repairs were initially delayed. Reports that ExxonMobil resorted to flaring billions of cubic feet of natural gas caused concern.

The Environmental Protection Agency (EPA) will be suing ExxonMobil for refusal to pay two fines in relation to a “minor” “non-toxic” spill earlier in the year offshore .

With a five-month 2020 election scandal having delayed approval of the Payara Development Project, Exxon’s Senior Vice-President expressed his confidence that the project will soon receive approval even as he assured stakeholders that the political leaders of Guyana understand the importance of facilitating the work of the oil and gas sector.

UK businesses “more cautious”

August 14, 2020

The five-month-long electoral crisis made British investors more cautious about doing business here, said High Commissioner Greg Quinn.

“It has made them more cautious and they were certainly very cautious in the period of that five months as well. So, in reality, I think we have lost a period of time in which we could have been driving forward some of that economic progression,” he said.
Since the discovery of oil offshore Guyana in 2015, the business-to-business link between the two countries has expanded tremendously, not just with interests in the oil and gas sector. Now that the electoral impasse has been resolved, Quinn said it is time to start recapitalising on the investment opportunities that are available to develop the local economy. Since the installation of the new Government, the diplomat met officials including President Ali and Foreign Affairs Minister Hugh Todd to discuss areas of cooperation.

“Now that we’ve got past this post-election period, we now want to get to a place where all of those businesses that are interested in forming partnerships here and building local capacity…we are now going to get them back in so they can start developing the wider economy.”

Former Jamaican Prime Minister Bruce Golding, Head of the Organisation of American States (OAS) Electoral Observer Mission for Guyana’s Election, had contended that the damage to the country’s image on the world stage will take generations to fix.

Golding informed an OAS Permanent Council Meeting that “the pernicious actions of a few have brought considerable damage to Guyana’s image and reputation. Even if this debacle is soon and satisfactorily resolved, it will perhaps take a generation and significant institutional reform for that damage to be repaired.”

Quinn explained that “British businesses are resilient” and with a legitimate Government in place and stability in the economy, they will continue to be interested in Guyana. There is no question about the legitimacy of the current Government and therefore, as far as the foreign businesses are concerned, there is a safe business environment. Adding to the welcoming business climate is Guyana’s improved standing on the Corruption Perception Index and the Ease of Doing Business Index. The improved standing is a step in the right direction in making the country more attractive to foreign investors since those perception guides give foreign businesses an insight into what it would be like investing in another country.
Another issue is that of clarity on what is required. With the Local Content Policy, such a strategy needs to be clear on the expectations and realistic in terms of timescale. In the case of the burgeoning oil and gas industry, there is hardly any skilled labour locally, and therefore, the country must depend on outside expertise to develop. If a company comes to Guyana, there can be an arrangement in place whereby they are required to partner with a local firm and train a certain number of locals in a certain amount of time.

“And I think a lot of British companies would welcome the clarity of what is required.”

Therefore, with such an arrangement in place, Guyana can benefit from foreign training, which will eventually advance its local labour force. Foreign companies, including from the United Kingdom, actually prefer to employ locals because it is simply just easier.
Apart from oil and gas, British companies can partner with Guyanese firms or the Government in the area of infrastructure with regards to building or designing roads and structures like the new Demerara Harbour Bridge.

He mentioned opportunities for partnership in the renewables industry, with expertise in this field in Scotland.
Guyana and Aberdeen committed to working together. In March 2019, Lord Provost of Aberdeen Barney Crockett visited Guyana where the foundation was set and the two sides signed a Memorandum of Understanding to cement their commitment of partnership in oil and gas, energy, skills development, healthcare, solid waste management and green open spaces.
Quinn noted that as oil wealth trickles down – and he urged that measures are put in place to ensure this happens – Guyanese will have more spending power, and therefore greater investment opportunities will become available in the provision of goods and services.

(Devina Samaroo)

Learn from UK oil & gas experience August 13, 2020

The United Kingdom still has heightened investment interests in Guyana’s oil & gas sector says High Commissioner Quinn who hopes that this country maximises the support given to the sector from UK’s oil & gas capital, Aberdeen, in Scotland.

As the new government works to develop a sustainable and renewable economy from the proceeds of the oil & gas sector, he urged that there be realistic goals set along with sensible regulations instituted that would address the country’s needs.

When Quinn met new Minister of Foreign Affairs Hugh Todd, Downing Street expressed to Takuba Lodge, its hopes of developing a “twinning” relationship in the oil & gas sector, among other areas.

UK to free up stalled aid

August 12, 2020

With monies for infrastructural and other projects stalled since the December 2018 No Confidence Motion against the last government was upheld, the UK is swiftly pursuing measures to have those disbursed to the new government to recommence the process, even as it looks at other areas to lend its continued support.

“Assistance that was on pause, we are very keen for that to restart. I am due to see the Minister of Public Infrastructure in the next couple of days because we are very keen to have that process restarted,” British High Commissioner Greg Quinn said as he wraps up his tour of duty , which lasted five years instead of three.

He was referring to projects which fell under the United Kingdom Caribbean Infrastructure Fund (UKCIF). Under the Fund, the UK’s Department for International Development provided up to £300 million in grant financing from January 2016 to March 2020, to Caribbean countries. Guyana is to benefit from £53.2 million (around $16 billion) with the funds to be applied to six major infrastructure programmes, including waterfront development, water supply improvement and solid waste management. The CDB has been designated by the UK government to design, develop and implement the programme in collaboration with Guyana.

‘
‘Never before seen such blatant attempt to fix election results’ -UK envoy

August 11, 2020

British High Commissioner to Guyana, Greg Quinn said that Guyana’s five-month wait for an election declaration and the blatant attempt to fix the results was one he had never seen in his 25-year career as a diplomat.

“I have never seen anything like it,” Quinn said as he prepares to return home after serving five-plus years as High Commissioner .

He said that when he watched the District 4 results being read from a spreadsheet by Returning Officer Clairmont Mingo, he was stunned and thought, “This is definitely wrong and just not credible”.

Adding to the envoy’s disbelief on March 5th was then Minister of Foreign Affairs warning observers of their role and possible pulling their accreditations. He knew at that moment he had to say something and was the first to object to her assertions in the GECOM District Four office

Quinn hopes that electoral and other reforms are put in place so that there is not a repeat come 2025 and that Guyanese will hold the government and the current opposition parties accountable to ensure that they are not put through that agony again.

Outgoing UK envoy urges reforms, reconciliation
-to avoid repeat of unprecedented elections crisis

August 12, 2020

British High Commissioner to Guyana, Greg Quinn yesterday said that the five-month wait for a final declaration from Guyana’s March 2 elections and the blatant attempt to fix the results were both firsts for him in his 25-year career as a diplomat.

“I have been around in this business for 25 years and I have never seen a post-elections process like I have seen here in those 25 years, anywhere,” Quinn told Stabroek News in an exclusive interview yesterday as he continued his preparation to return home after serving five-plus years as High Commissioner here.

Quinn observed that there are fundamental issues that have emerged, including the need for constitutional and electoral reforms, for which he said Guyana’s citizenry has to hold the Irfaan Ali government and all its leaders accountable to ensure that there is no recurrence in 2025. “I like to think more about having the reform process launched now, to ensure that come 2025 you don’t end up in the same situation as you did this time,” he added, while saying that a reconciliation process also needs to be undertaken in the period ahead of the next polls.

Fitch Solutions

Political uncertainty will have limited impact on ongoing oil and gas development projects

July 22, 2020

Fitch Solutions, one of the industry’s leading providers of analytical oil and gas data, ,recently conducted an assessment of the political uncertainty that has gripped Guyana and the likely implications for the relatively young petroleum sector. At the conclusion of its evaluation, the consultancy group which is based in the United Kingdom found that ongoing projects are going to be impacted but not to a significant degree.

Fitch Solutions specifically stated, “In our view, the elevated electoral uncertainty in Guyana will not impact the ongoing development projects carried out by ExxonMobil to a great extent given low risk of potential changes to contracts between the government and the company.”

The UK firm was also keen to note that even if there are potential changes to contracts awarded for Guyana’s offshore concessions, they are likely to exclude the Production Sharing Agreement Guyana signed in 2016 with ExxonMobil and its partners, Hess Corporation and CNOOC/NEXEN.

Fitch Solutions was keen to remind that ExxonMobil, partnering with Hess and China National Offshore Oil Corporation, is continuing developing works in the Stabroek Block’s Liza field. It was keen to note that ExxonMobil which is the operator of the block has restored the average daily output of 80,000-90,000 barrels of oil per day (b/d) after a reduction of production to 27,500b/d caused by a technical glitch with the natural gas reinjection equipment for the Liza Destiny vessel.

Furthermore, Fitch said that the recovery in the output supports its short term crude oil production forecast for Guyana in which it expects the country to deliver the average of 55,000b/d in 2020. Fitch also said it will maintain its forecast given ExxonMobil’s commitment to pursue Liza-One and Liza-Two as initially planned, despite the substantial cuts to its capital expenditure plan for 2020.

 

Annual Aberdeen-Guyana Gateway 19 – 20 August

The Digital event was the first online Webinar, held in cooperation with the British High Commission in Guyana. The event sparked overwhelming interest from UK and overseas delegates, with a record 210 people registering over 2 days. Sessions examined opportunities for the Scottish and UK supply chain to gain a foothold in this emerging market which produced its first crude oil within the past year.

Led by His Excellency Mr Greg Quinn, High Commissioner for T Guyana and Suriname and The Lord Provost of Aberdeen, Barney Crockett, a host of eminent speakers delivered presentations. Scottish contributors included E. Neilson- Stromachs, F. Kiernan, ABIS and A. Gibson, OES. Guyana speakers were N. Boyer, O. Vervey and G. Gossai.

High Commissioner Greg Quinn said: “The burgeoning relationship between Aberdeen and Guyana is testimony to the support and assistance Aberdeen can give to Guyana. But this is a relationship based on partnerships designed to benefit all. It is a pleasure to support these partnerships and to encourage them going forward.”

Brett Jackson, Founder/MD of Granite PR and creator of the Gateway series added: “The move to digital for our Gateway series has proved that, even although we are not bringing people together in person, we are still able to fulfil our event’s principles of facilitating international networking and knowledge sharing in a safe and appropriate way. The support this Gateway has received from delegates in a range of locations gives us confidence and optimism as we look ahead to the shape and delivery of future events in our growing portfolio.”

The Aberdeen-Guyana Gateway was supported by ABIS Energy UK/Guyana, Askaris Limited, Energy Industries Council, Energy Voice, Georgetown Chamber of Commerce & Industry, Guyana Office for Investment, OES Oilfield Services (UK) Ltd, Scottish Development International, Stronachs.

ECO congratulates the Granite City for this timely forum, with the industry in peril as companies nurse massive losses and write-down assets. Guyana must resist agitators urging renegotiation of Stabroek Block contract which is comparable to terms in similar petroliferous regions.

If Guyana is to prosper, government must focus on healthcare, education, law and order to support the fledgling industry. WIth its remarkable record in creating prosperity, this international industry can unite the fractured country, laid low by venal villains in a discredited regime that looted the treasury and depleted reserves in courts as it clung to undemocratic de facto rule.

August 2, 2020

NRF to be repealed or amended

Vice President of Guyana, Hon. Dr. Bharrat Jagdeo, stated that the Natural Resources Fund (NRF) will either be amended or revised. The new PPP/C Government found several discrepancies with the bill.

“The Natural Resources Fund will be very soon either… repealed or amended… through a Bill. Clearly, we have a number of issues with the Natural Resources Fund, and one of which is the overwhelming dominance of the influence of the Minister of Finance on the sector and the use of the funds. [We] want a more arm’s length relationship in terms of management of these funds. That was our fundamental problem with the Bill and the Act that was passed.”

Minister of Natural Resources, Hon. Vickram Bharrat, explained that to ensure there is no political interference with the NRF the new administration removed ministerial powers and allowed for more involvement of stakeholders including the private sector. In January 2019, the NRF was signed into law.   Guyana commenced oil production in December 2019 and has since received over $19,866,269,579.49 (US$94,921,803.00) in royalties and other payments from crude sales, held in an account at the Federal Reserve Bank of New York.

Red Year

40% projected growth depends on having legitimate Government, Parliament

Five months since elections were held and over eight months since Parliament was dissolved, the installation of a legitimate Government and the convening of Parliament save Guyana from disaster.

Economist and Executive Director of the Guyana Budget and Policy Institute, Dhanraj Singh warned that the more than 40 per cent growth rate quoted by de facto Finance Minister to defend his handling of the economy is misleading. He noted that this 40 per cent does not translate to creating jobs in job retentive economic sectors or reducing poverty, but rather is dependent on the value of oil. Singh explained that these growth estimates depended on a number of things such as a legitimate Government and budget.

According to Singh, the 40 per cent growth is almost entirely the value of oil that will be produced this year. “…has almost nothing to do with the rest of the economic sectors, job creation, household income, and poverty reduction. Both the World Bank and the IMF (International Monetary Fund) forecast economic growth of about 50 per cent because of oil and gas production.”

These estimates, however, are based on many assumptions including the existence of a legitimate Government, a Parliament, and a national budget. Absence of these institutions not only undermine these projections, but it also spells unimaginable economic disaster and hardship for the country.
Inter-American Development Bank (IDB) , which previously estimated 86 per cent growth, is now projecting that Guyana’s oil exports could lose as much as half of its expected US$2.4 billion value and a sizeable chunk of its Gross Domestic Product (GDP) growth with it.

Previously, the IDB had projected 2020 oil exports worth US$2.4 billion and US$230 million in Government revenue. However, in its recent Caribbean region quarterly bulletin, the IDB drastically slashed these projections.
The IDB used the assumption of oil prices remaining between US$20 and US$35 a barrel for their calculations. New numbers estimate the value of oil exports will drop by 40 to 60 per cent or approximately $1.2 billion.
Government earnings are expected to decline by 15 per cent to US$195.5 million. This is expected to affect GDP, with the bank projecting much lower growth than the original 86 per cent it expected.
Singh contended that it is disingenuous for persons to cite total imported consumption goods as proof that consumption spending is not in jeopardy. Singh instead referenced total private consumption to show that all is indeed not well.

“Since 2015, the last regime spent extravagantly but whether spending led to higher consumption in households is a separate question to which the answer is a resounding no. Total private consumption at the end of 2019 is the second-lowest in almost a decade; it declined by more than $63 billion or 12 per cent from 2015.”

While the Government spent lavishly over the last few years, wealth did not trickle down to ordinary families. The impact of the pandemic and the election crisis would undoubtedly make the situation worse in the months, quarters, and years ahead.

SIngh made an urgent call for statesmanship to prevail and for the Government to do the right thing after the de facto regime brought the economic problems the country now faces. The antics of cutting allocations and starving the economy combined to sabotage it.

“I will end .. by sounding the alarm, an immediate end to this democratic siege, followed by the swift installation of a Parliament and a legitimate Government is the only path to avoid the.. disaster that is rapidly advancing. With each passing day, the window of opportunity to help the economy and save families is closing while the pain and hardship are becoming unbearable. History will account for the decisions we make at this moment .

With five months elapsed since Elections were held, a recount showed that the opposition People’s Progressive Party (PPP) won the elections. The incumbent made a concerted effort to delay the transition of Government.
During this time, the country was in a standby mode amid the pandemic. Government provided no stimulus package for the economy and little help for those who lost their jobs.
The situation is compounded by the fact that since there is no Parliament or fully functional Government, oil monies held offshore in the United States (US) Federal Reserve cannot be accessed. The US led the push for sanctions on the de facto regime for ignoring the will of the people.“

ExxonMobil readies drillbit for latest exploration well in prolific basin

Drilling to start ‘imminently” with the drillship now on location at the Kaieteur Block

11 August 2020
By Josh Lewis in Perth

US giant ExxonMobil is preparing to spin the bit at the Tanager prospect on the Kaieteur Block.

Westmount Energy confirmed the Stena Carron drillship is on location and set to spud the Tanager prospect

11 August 2020

StockMarketWire.com – Westmount Energy welcomed news that a drillship had arrived at a well site on the Kaieteur Block offshore Guyana.

The arrival of the Stena Carron drillship was announced by Ratio Petroleum Energy, with drilling operations expected to commence imminently.

Westmount held an indirect interest in the Kaieteur Block as a result of its around 0.7% interest in Ratio Petroleum and its around 5.4% interest in Cataleya Energy.

 

Opposition candidate declared victor in Guyana
Irfaan Ali finally sworn in as president of Guyana

3 August 2020 14:09 GMT
By Gareth Chetwynd in London

Irfaan Ali was finally sworn in as president of Guyana on Sunday after the country’s electoral commission (GECOM) formally declared him winner of a disputed election held on 2 March.

Irfaan Ali, a former housing minister who was standing as opposition candidate, named former Guyanese president Bharrat Jagdeo as his vice president and former chief of staff of the Guyana Defence Force Mark Phillips as prime minister.

Jagdeo is a general secretary of the Peoples Progressive Party (PPP), which held power in Guyana between 1992 and 2015.

Guyana has been living in a state of limbo since the elections.

Outgoing president David Granger was initially declared winner, but allegations of vote-rigging on both sides led to a judicially enforced recount.

Preliminary recount results released in June showed the PPP had won the election, and Granger came under pressure from several international organisations to concede defeat.

The apparent end of the political impasse will be good news for the ExxonMobil-led consortium that began producing oil from the Liza field in December and has several additional floating production, storage and offloading projects in the pipeline for multiple discoveries on the Stabroek block.

Payara delay
The consortium has suffered delays in obtaining government approvals for future projects, ultimately affecting the start-up schedule for the Payara field development, on the same block.

Expectations about soaring revenues from the Stabroek fields have raised the political stakes of an impoverished country where party politics are traditionally divided on ethnic lines.

The PPP is mainly backed by Guyanese of South Asian descent, while Granger’s APNU-AFC coalition is mainly backed by Afro-Guyanese.

The terms of the oil contracts governing the Stabroek block developments have come under scrutiny during the election campaign. A 2% royalty and 50% profit-sharing after cost recovery has been seen as too soft on the oil companies.

Both sides of the political divide played a part in setting those terms, however, and neither side has pledged any kind of renegotiation of past contracts

Unity call
In his swearing-in speech, Ali called on both sides to build a united Guyana.

“The future requires every Guyanese to play a part in building our country,” he said.

The neutrality of Guyana’s electoral commission had sometimes come under question during the legal wrangling about the legality of the vote.

A unanimous court of appeal ruling that was favourable to Ali, paved the way for GECOM chairwoman Claudette Singh to recommend validation of the recount results and include them in his final report, leading to the declaration of victory for Ali .

Granger released a statement promising to respect the lawful consequences of the declaration, but maintaining that the report ordered by the court and presented to the election commission” contains significant anomalies and irregularities”.

“The APNU+AFC coalition cannot endorse a flawed report and will continue its campaign to ensure that the votes of all Guyanese are accurately recorded, tallied and reported.”

ExxonMobil cut Guyana crude output to avoid gas flaring

Yellowtail-2 spurs ExxonMobil to seek deeper riches

3 August 2020

Canada looks forward to working with President Ali

By Stabroek News August 4, 2020

Canada’s Minister of Foreign Affairs François-Philippe Champagne said that Ottawa looks forward to working with President Irfaan Ali.

In a statement congratulating Ali, Champagne said “We look forward to working with President Ali and his government to advance our shared priorities. Despite challenges in recent weeks, through these election results, the will of the people of Guyana has been reflected and the democratic process has been upheld”.

Champagne noted that Canada supported Guyana’s elections with technical assistance and also aided the Carter Center’s election observation mission and CARICOM’s High Level Team, which observed the recounting of ballots.

OAS felicitates President Ali

– weaknesses in electoral system must be addressed

August 4, 2020

The Secretary General of the Organization of American States (OAS), Luis Almagro, congratulated the new President of Guyana, Dr. Mohamed Irfaan Ali, on his election.

A statement from the organisation noted that the OAS has closely monitored the situation here since the polls closed on the night of March 2, 2020.

“We are happy that the multiple calls by the General Secretariat, national stakeholders and bilateral and multilateral partners, for the genuine results of the elections to be respected, were heard by GECOM.“

Carter Center urges move on electoral, constitutional reforms

August 3, 2020

Congratulating Irfaan Ali on his election as President, the US-based Carter Center urged the new government to reach across the divide and move swiftly on electoral and constitutional reforms.

The Center- headed by former US President Jimmy Carter – offered plaudits to Ali, the elections commission chair and former President David Granger

“The Carter Center commends the Guyana Elections Commission and Chairperson Claudette Singh for finalizing the results of the 2020 election. It extends its congratulations to President Irfaan Ali as he assumes Guyana’s highest office and applauds former President David Granger’s statesmanship in recognizing GECOM’s declaration of results.”

The Center, which has been associated with electoral reforms here since 1990, called on all political parties to work together to enable a smooth transition from one government to another. It said that the Guyanese people have shown great patience throughout the five-month process, and they “deserve a government that represents all Guyanese and that works collaboratively to move the country forward”. The Center, which has observed several elections here including the seminal one in 1992 but was prevented from returning here to observe the recount of votes in May, said that the March 2nd polls were a true test of Guyana’s democracy.

It said that the elections highlighted the “deep divides that persist in Guyanese society and the ways that the current political and electoral systems reinforce these divisions. It is critical that key leaders in Guyana now reach across the divide and work to ensure that fundamental electoral and constitutional reforms are completed as an urgent priority, well before the next election. Guyana’s political leaders spoke of these ideals during the campaign period, and the Center calls on them now to work together to realize them. An inclusive reform process – with civil society leaders playing a key role, and with strong support from the international community – will be essential”.

The Center urged the new PPP/C government to move quickly to begin this process and said it stands ready to assist in these efforts and advance Guyana’s vast potential.