Exxon coventurers to invest $4 trillion over next five years

June 17, 2023

Phillip Rietema, Vice President and Business Service Manager of ESSO Exploration and Production Guyana Limited, ExxonMobil’s local subsidiary, told media that EEPGL and coventurers in offshore blocks, are committed to investing $4 trillion over the next five years. The company provided reporters with its audited financial statements. at its Kingston, Georgetown headquarters.

Rietema said that the company’s assets in 2022 increased by G$1 trillion which in the financial statements signify a rise of around 80 per cent. The company does not have projections for the year 2023 in relation to the expected increase in assets.

“As I said, we’re committed over the next five years as a CoV (Coventurer) group to invest another four trillion Guyanese dollars. So, you would expect as Payara comes online in the future… yellowtail, the assets will increase over time.”

The financial statements indicate total assets are in the range of some US $20 billion.

“Those assets reflect all the investments we’ve made to date and are generating as you see significant cash flow for Guyana and for the CoVs and those assets and the cash flow that they generate could be used to deal with any expenses in the future.”

Rietema revealed that the company has been in Guyana for many years and investing since 1999 and these investments are reflected on the financial statements. There have been investments of around G$2 trillion even as the profits to date are cumulative to around $600 billion. The investments are over three times their accumulated earnings

 

ExxonMobil Annual Report 2022

June 18, 2023

IN a first-of-its-kind Annual Report, ExxonMobil Guyana announced that, along with its co-venturers, it invested G$570 billion in Guyana in 2022. The report is replete with indications that ExxonMobil is, reinvesting nearly all of the cash it earns from oil production to invest heavily in additional exploration and development for the long term in Guyana

The company presented key facts and figures that show the impact of less than a decade of oil operations. In 2022 alone, the Government of Guyana lifted approximately 13 million profit-oil barrels, earned approximately 200 per cent increase in royalty payments and contributed a record G$240 billion to the Natural Resource Fund (NRF).

At this stage, the Stabroek Block partners ExxonMobil Guyana, Hess Corp, and CNOOC have been ploughing essentially all of their profits back into exploration, development and the local economy. To date they have invested roughly GY$4 trillion to develop projects offshore and committed to another GY$8 trillion through 2027. With cash flows of GY$440 billion since 2020, the companies invested GY $1.5 trillion more than they have made to-date.

Combined spending on local content amounted to GY$83 billion (US$400 million) in 2022, with more than 1,500 Guyanese businesses providing goods and services and over 5,000 Guyanese workers employed by the company and its contractors and sub-contractors.

Analyst Joel Bhagwandin found that Guyana’s net take, including local content spending and government revenues, amounted to G$697.7 billion (US$3.34 billion) from 2019 to 2022. These numbers paint a clear picture of the financial upside with Guyana rapidly developing as an oil and gas producer without risking any of its own money in the expensive and costly exploration.

President of ExxonMobil Guyana, Alistair Routledge, recently said, “We believe that the true measure of our success lies not only in the barrels produced but also in the positive impact we create for our people and the communities in which we operate. By prioritising local talent, partnerships, and investments, we aim to cultivate a thriving and sustainable environment that benefits everyone,”

The financial strength of these investments helps assuage concerns about liability coverage in the unlikely case of an accident. Disclosures from ExxonMobil emphasise that prevention is its main priority but that they have more than sufficient assets on hand in case the worst happens, including a US $600 million per incident insurance policy, US$19 billion in local assets, $12 billion in equity, and an additional US$2 billion affiliate guarantee. While the “unlimited insurance” policies that some have called for do not actually exist on global markets, compensation for an accident would be covered by the sizeable assets and policies already in place.

ExxonMobil Guyana has maintained that increased production and environmental stewardship can accompany numerous processes and controls in place to operate safely and prevent potential incidents. The focus on prevention in Guyana is about both insurance and assurance. The financial positions outlined in the disclosures have been established to ensure that in the unlikely event of an oil spill incident, the company is in the best position to respond, handle, and mitigate the impact.

ExxonMobil was clear about ambitions for Guyana over the coming decades with steady investment planned and more exploration and production efforts for projects on the horizon. Guyana has proven itself to be a worthy and reliable new exploration frontier. Companies like ExxonMobil and its partners seek attractive geology and stable government and political conditions in a country, according to ExxonMobil’s Exploration Chief John Ardill.

The success of the oil and gas industry and pace of development in Guyana is so influential, that his company “uses Guyana as a benchmark for exploration in Africa. Guyana is a model for other countries both in its Caribbean region and globally.”

Exxon liability insurance :

Appeal Court grants stay of High Court decision

 Sanjeev Datadin
June 9, 2023

JUSTICE of Appeal Rishi Persaud, granted a stay of a High Court order that required Esso Exploration and Production (Guyana) Limited (EEGPL), a local affiliate of ExxonMobil, to provide an unlimited parent company guarantee for its offshore oil operations.

He also mandated the company to lodge a US$2 billion guarantee, while the appeal against the lower court’s decision is being heard and determined.

During the delivery of his judgment regarding the merits of the appeal filed by the Environmental Protection Agency (EPA), Justice Persaud highlighted that the EPA’s appeal has a good chance of success. He emphasised that his order for Esso to provide the guarantee, aims to alleviate any concerns or worries about potential adverse consequences.

Justice Persaud’s decision seeks to strike a balance by granting a temporary stay on the requirement for an unlimited parent company guarantee while still ensuring that a substantial guarantee is in place to address any potential risks associated with the ongoing oil operations. Justice Persaud said that the court had the jurisdiction to hear the appeal.

In his ruling, the judge stressed that it seems on the face of the case that Justice Kissoon misconstrued the processes in relation to the acquisition of insurance here. In this particular case, the judge said that the EPA can be considered an expert body which ought to have prompted judicial restraint since the body is better placed to evaluate such complex legal matters within its expertise. Having considered all the evidence, the judge conceded that the appeal has the prospect of success.

Considering the interest of justice, the judge placed weight on Exxon’s submission that the revenue loss to the permit holder and more importantly Guyana, may have serious implications and devastating consequences in the event of a permit suspension. To allay any anxiety as to impending doom, as conceived by some and moreover, in the interest of justice, Justice Persaud ordered Esso to provide the guarantee in the sum of US$2 billion within 10 days or the stay would be dismissed.

On May 3, Justice Kissoon found that the oil giant “engaged in a disingenuous attempt” to dilute its obligations under its environmental permit for its Liza One project, by not fully meeting insurance requirements relating to environmental protections.

Attorney Sanjeev Datadin had moved to the Appellate Court arguing that Justice Kissoon made an error in interpreting and applying two legal provisions related to an environmental permit issued to Esso Exploration and Production Guyana Ltd.

The first provision is Clause 14 of the Environmental Permit, which is a condition the company must comply with to operate in Guyana.

The second provision is Section 31(2) of the Environmental Protection Act, which sets out requirements for financial assurances that companies must provide in relation to environmental permits.

“This is a simple issue of interpretation. The existence of insurance has never prevented something from happening. Insurance is to compensate when the event occurs. The insurance will only be applicable whenever the ill befall. All that the guarantee will try to do is make it right after the fact.”

Justice Kissoon made a mistake by considering “extraneous matters” in his decision, specifically referring to the “unlimited guarantee” requirement.

The permit only mentions a “fixed sum” and not an unlimited guarantee, and considering the guarantee as a protector of potential events is incorrect.

Additionally, the respondents’ reliance on the contract imbalance between Exxon and the government is irrelevant to the current matter. If someone is unhappy with the contract, there are other actions that can be taken and it does not affect the issue at hand. The lower court made an error by implying an unlimited guarantee that does not exist in the permit or the Environmental Protection Act.

He claimed that the court invented the concept of an unlimited guarantee and used it as a weapon against the defendants. Justice Kissoon overstepped the functions of the EPA, bypassing other available options by issuing a coercive order.

Esso attorney, Senior Counsel Edward Luckhoo, submitted that Condition 14 of the Environmental Permit does not require an unlimited guarantee. Justice Kissoon misinterpreted the clear language of the condition and it only provides for an estimate of a finite sum based on a formula outlined in the permit.

Luckhoo rejected the characterisation of the absence of an unlimited guarantee as “self-serving” and emphasised that the interpretation of Condition 14 is solely a matter of law.

No evidence was presented to support Justice Kissoon’s conclusion that Esso is an asset-less subsidiary of ExxonMobil. The 2017 permit did not include a requirement for financial assurance, and it was only introduced when the permit was renewed in 2022.

 

 

Court stays order for Exxon to give unlimited guarantee for oil spills

June 8, 2023

As an oil boom unfolds, Guyana lacks capacity to absorb it

GEORGETOWN, June 8 (Reuters)

A Guyana Appellate Court judge temporarily stayed a lower court’s order requiring Exxon Mobil and partners in offshore oil production to provide an unlimited guarantee to cover potential oil spills.The stay lifts a cloud over oil production at the first offshore oil platform.

Exxon had said that if the stay was not granted it could halt output at the facility, costing the partners on the project $350 million per month in lost revenue.

The judge said the group, which includes Hess Corp and CNOOC , must provide a $2 billion guarantee in 10 days, or else his stay would be lifted. Exxon told the court it recently agreed to provide the $2 billion in affiliate guarantees for the offshore operation that goes beyond the original environmental liability coverage.

Justice Rishi Persaud said during the hearing that a “damning picture” of revenue loss and “devastating consequences in the event of a permit suspension” had led him to grant the stay.

A lower court had found in a case brought by residents that the consortium was in breach of insurance obligations for its first offshore oil project. Exxon and the government – which receives royalties from the project and a share of profits – appealed that ruling, arguing there was sufficient protection.

The company welcomed the decision, which was “in the interest of all parties involved. It is a matter of national significance, particularly for thousands of Guyanese workers and hundreds of local businesses who rely on the oil and gas industry.”

Court stays order for Exxon to give unlimited guarantee for oil spills

May 29, 2023

In an interview with S&P Global Commodity Insights, Vice President of Global Exploration at ExxonMobil, John Ardill, applauded the remarkable pace of exploration and production in Guyana, ExxonMobil’s three criteria for investment- attractive geology, stable political conditions and carbon footprint minimization, “all come together” in Guyana.

Meticulous consideration goes into upstream investments, as they have long-lasting implications. “Are they the right molecules in the right place with the right carbon intensity and if those questions are all yes, then they’ll find a path to development. Not, in many cases, very quickly. If there are question marks around those… it’s going to be a harder path.”

ExxonMobil’s expansion in Guyana, is a benchmark against which other basins, including those in Africa, are measured. The rapid revenue generation and the ability to minimize emissions from the production process make oil a vital resource, particularly in regions like Guyana.

Ardill gave insight into Exxon operations in multiple jurisdictions, but indicated he had a particular enthusiasm for developments in Guyana. Since 2015,over 30 discoveries and an extremely generous deal encouraged Exxon to move quickly on the development of 11 billion oil-equivalent barrels. The operator received approval from the government to place five floating production, storage and offloading (FPSO) vessels offshore , to produce over a million barrels of oil per day (bpd), and is likely to pursue as many as 10 in total.

Ardill praised the speed at which development has progressed, stating, “That’s incredibly fast, four and a half years from discovery to first oil is pretty much an industry record. So that oil development, by any measurable standard, in a new country with no hydrocarbons industry, using floating production, storage, and offloading vessels, all of that is world-class pace and skill, and to be running three rigs drilling pure development wells, that’s not happening anywhere else in the world.”

S&P said Exxon is currently producing 360,000-370,000 bpd in Guyana, and has six rigs operating. The Payara project will start later this year, taking production to 600,000 bpd. Yellowtail will come on in 2025 and Uaru will achieve first oil in 2026. The Whiptail project, still to be reviewed and approved, is being targeted for first oil in 2027. By then, current production is expected to triple. Exxon has a 45% working interest in the Stabroek Block, as operator. Hess Corporation has a 30% stake and CNOOC Limited has a 25% stake.

 

Modec awards ExxonMobil FPSO contract to PRC shipyard

First steel cut for Modec’s latest M350 floater scheduled for October at Dalian Shipbuilding Industry Company

15 June 2023
By Xu Yihe in Singapore

Japanese floater specialist Modec finalised a deal with a Chinese yard for the hull of a newbuild floating production, storage and offloading vessel that will serve ExxonMobil’s Uaru field on its prolific Stabroek block offshore Guyana.

 

Dalian Shipbuilding Industry Company (DSIC) is in northern China

 

TechnipFMC subsea contract for ExxonMobil project worth up to $1 billion

World Oil May 03, 2023

TechnipFMC has been awarded a large contract by ExxonMobil Corporation affiliate, Esso Exploration and Production Guyana Limited, to supply the subsea production system for the Uaru project. The contract award is valued between $500 million and $1 billion.

Frontera, CGX

Offshore staff 06.14.2023

TORONTO, Canada – Wei-1BP1 exploration and appraisal well on the offshore Corentyne block reached TD of 20,450 ft, after encountering oil in Maastrichtian and Campanian reservoirs.

These were secondary targets, drilled by the initial Wei-1 wellbore which delivered around original 71 ft of net oil pay.

A bypass wellbore (Wei-1BP1) was drilled from 18,757 ft to TD, intersecting the primary Santonian targets in the western complex in the northern part of the Corentyne block.

LWD data and cuttings suggest multiple hydrocarbon shows in the Santonian interval.

CGX sees the results as encouraging and in line with pre-drill expectations, with the well confirming its geological and geophysical assessment of the block.

The revised cost estimate for the program, including completing the logging runs, finish well operations and release the rig, is $190-195 million.

 

 

Well results ‘encouraging’ as total cost estimates rise again

June 13, 2023, by Melisa Cavcic

Partners in the Corentyne block – Canada’s CGX Energy and Frontera Energy – drilled to a total depth an exploration well offshore , which recently found petroliferous intervals. Total cost estimates for this well have been revised.

Frontera Energy revealed on 13 June 2023, that the Wei-1BP1 (Wei-1 bypass exploration and appraisal well) had reached a total depth (TD) of 20,450 feet while the original Wei-1 wellbore reached a depth of 19,142 feet. This bypass well was drilled from 18,757 feet to total depth (TD) and penetrated the primary Santonian targets of the well in the western complex in the northern portion of the Corentyne block.

Prior to the bypass, the well encountered an aggregate of approximately 71 feet of net oil pay in the secondary target reservoirs in the Maastrichtian and Campanian. According to Frontera, data collected following the bypass from Logging While Drilling (LWD) and cuttings indicate multiple hydrocarbon shows in the primary target Santonian reservoirs.

While results from the well are ”encouraging,” data acquisition is ongoing via wireline logging, MDT’s and side wall core sampling. The results from this well are consistent with pre-drill expectations, confirming geologic and geophysical assessment of the block.

As operations continue, the Guyana partners revised total Wei-1BP1 cost estimates to approximately $190-$195 million from the previous increase to $175-$190 million to complete the logging runs, finish well operations, and release the rig. Frontera noted that additional costs are primarily due to the lost sampling tool and drilling of the bypass well.

Originally, Frontera and CGX disclosed a plan to spend up to $130 million in February 2022 on their second exploration well on the Corentyne block, called Wei-1 with the spudding of the well slated for October 2022, using the Maersk Discoverer (now called Noble Discoverer) semi-submersible rig.

In November 2022 , the two players revised the spud window for the Wei-1 well after the Noble Discoverer rig ran into delays on its assignment with Shell in Trinidad and Tobago.

As a result, the start of drilling operations in Guyana was anticipated between December 2022 and late January 2023. In line with this, the Wei-1 well was spudded in January 2023.The Well was drilled by the Joint Venture. CGX holds a 32.00% participating interest with Frontera holding the remaining 68.00% participating interest in the Corentyne block.

 

Corentyne discovery a potential game-changer

Wei-1 well in the Corentyne block encountered 210 feet of petroliferous sandstones

29 June 2023
By Fabio Palmigiani in Rio de Janeiro

Canadian independent CGX Energy has made a potentially transformative discovery offshore , which may pave the way for a commercial development in the South American nation outside the ExxonMobil-operated Stabroek block.

The news of a major find in the Corentyne block could add fresh excitement to Guyana’s highly anticipated competitive round due to take place early in the second half of this year.

CGX and project partner Frontera Energy have completed drilling of the Wei-1 exploration well in Corentyne and encountered 210 feet (64 metres) of hydrocarbon-bearing sandstones in Santonian reservoirs.

 

 

Westmount Energy announces purchase of common shares in Africa Oil Corp

Westmount Energy has purchased 300,000 common shares in Africa Oil Corp. The purchase increases Westmount’s indirect exposure to anticipated exploration drilling on the Canje and Orinduik blocks, offshore Guyana from 2024 and in addition provides liquid exposure to the scheduled 2023, up to 4 well, appraisal drilling and testing program on the giant Venus discovery in the Orange Basin, offshore Namibia.

 

Energy independence

June 11, 2023

GUYANA has proven to be a global leader in the future of oil and gas with growing geopolitical influence and oil development could have an impact on everyday life when citizens are struggling with high prices and global inflation.

Oil production is set to lower household energy costs, reduce import dependence, and improve energy independence. As Guyana continues to show robust growth in key areas, this bodes well for all sectors of the economy, not just the oil sector.

Infrastructure investments and social advancement are directly correlated with the rapid advancement of the petroleum sector and offer a highly visible example of how revenues are bringing benefits to society.

Oil and gas revenues fund almost 30 per cent of the 2023 budget, up from 27 per cent in 2022. The overall national budget is G$781.9 billion (US$3.75 billion) for fiscal year 2023, Guyana’s largest ever.

The petroleum sector is estimated to have expanded by 124.8 per cent in 2022, with a total of 101.4 million barrels of oil produced. The better-than-expected performance of the sector allows increased spending on infrastructure, electrification, gas-to-energy, hydropower and solar energy projects that could help bring down costs for households. Importantly, the increase in spending is not a result of new debt or new taxes.

One key project that could play the biggest role in changing the lives of the populace on a day-to-day level is the gas-to-energy (GTE) project for an integrated Natural Gas Liquids (NGL) Plant and a 300-megawatt (MW) combined-cycle gas turbine (CCGT) power plant at Wales, West Bank Demerara, Region Three. The gas project should start lowering household electricity costs by as much as half when it comes on line in 2024 or 2025.

At the contract signing in December, President Irfaan Ali said that the GTE project will unlock the country’s new energy mix, a significant step forward for a nation that has suffered from energy insecurity in the past.

Gas will provide a vital source of reliable and cleaner energy near-term and help renewables like hydropower and solar in the long-term. Rural households will benefit from the development of infrastructure to expand access to electricity.

Guyana was once historically dependent on oil imports, not just for vehicle fuel, but for the Heavy Fuel Oil (HFO) that powers the electric grid. While HFO is not only an expensive and heavily polluting source of electricity, it is also tied to the global price of crude oil.

That has historically made fuel imports for electricity one of the largest expenses and left Guyana’s power grid at the mercy of high global oil prices. Guyana still suffers from some of the highest power prices in the region and the most unstable. Diversifying the energy mix and investing in GTE, will soon change that.

Among experts, there is optimism that Guyana has turned the corner for its energy security by focusing on its domestic production, which allows the country to insulate and protect itself from market shock prices.

Now more than ever, it is critical Guyana becomes self-sufficient, as OPEC+ announced it would make deep cuts to its output in July, likely pushing oil prices higher. This cartel pumps about 40 per cent of world’crude and cutting production directly impacts prices for consumers around the globe.

The NGL plant could produce other key products beyond electricity, like butane and propane, which would create a cheaper domestic supply for household energy like cooking gases. It will also form the hub of what could be a major industrial zone for production of local fertilisers using gas as a feedstock.

Major expansion of new port and road infrastructure funded by oil revenues could also help gradually bring down consumer prices for many goods, as it becomes easier and cheaper to import goods from overseas and Brazil.

Guyana is working to move away from import-dependency by investing in its infrastructure. This approach will help reduce prices and is only possible because of oil revenues flowing into the economy. The future is looking bright for Guyana as it demonstrates to the rest of its region what self-sufficient energy independence and a sustainable future can look like.

 

 

GDP to grow by 25.2 per cent in 2023

June 8, 2023

The World Bank Group Flagship Report in June 2023, titled ‘Global Economic Prospects,’  reveals that Guyana’s real gross domestic product (GDP) is expected to further grow by 25.2 per cent in 2023, while growth in Latin America and the Caribbean (LAC) region is expected to decline from 3.7 per cent in 2022 to 1.5 per cent in 2023,

Table showing Latin America and the Caribbean forecast by the World Bank Group
Guyana is the lone country with projected double-digit growth in 2023.

The country with the second highest GDP growth in the region is Panama with 5.7 per cent in 2023 and 5.8 per cent in 2024, followed by St Vincent and the Grenadines with 5.6 per cent and 4.8 per cent, respectively.

According to the International Monetary Fund (IMF), GDP measures the monetary value of final goods and services, that is, those that are bought by the final user produced in a country in a given period. It counts all of the output generated within the borders of a country.

Apart from the oil boom in Guyana, the rest of the Caribbean subregion is expected to grow at an average rate of 3.3 per cent in 2023, boosted by continued recovery in tourism and buoyant remittances. Overall, the Caribbean region is set to expand by 5.1 per cent in 2023

“The subregion’s outlook partly reflects the oil boom in Guyana, where GDP is expected to grow by 25.2 per cent this year and 21.2 per cent in 2024 as production at new oil fields continues to ramp up,” the report states.

 

 

 

Investors reject measure for additional disclosures on Exxon Guyana operations

June 1

Shareholders supported their Board of Directors and voted overwhelmingly to reject a proxy measure for additional disclosures on a worst-case scenario oil-spill response plan for ExxonMobil Guyana operations.

Even as the company highlighted that Guyana has been one of its main revenue earners and its operations here were on target to ensure a solid balance sheet as projected, some 86.7 per cent of shareholders voted against an “Additional Report on Worst-case Spill and Response Plans” resolution.

Shareholders had requested that the Company issue a report evaluating the economic, human, and environmental impacts of a worst-case oil spill from its operations offshore of Guyana. The report should be prepared at reasonable expense, omit proprietary or privileged information and clarify the extent of the Company’s cleanup response commitments given the potential for severe impact on Caribbean economies.

 

 

Majority of Exxon Shareholders reject oil spill proposals

Jun 01, 2023

The majority of ExxonMobil Corporation shareholders voted against two motions seeking a better understanding of oil spill risks and related litigation from the Stabroek Block operations. overwhelmingly rejecting the two proposals from separate groups.

Mercy Investment Services Inc. sought to understand the impacts of a worst case oil spill scenario on Guyana and 12 other Caribbean territories that could be affected from an unmitigated oil spill at the Liza Phase One Project.

Anna Marie Lyles of Princeton, New Jersey 08540, the beneficial owner of 60 shares for at least three years filed her proposal to request an actuarial assessment, omitting confidential information and prepared at a reasonable cost, of the potential cumulative risk to Exxon Mobil Corporation from current environment-related litigation against the company and its affiliates. Her proposal followed on the heels of Justice Sandil Kissoon’s ruling on May 3, 2023 ordering Exxon to provide an unlimited parent and /or affiliate company guarantee for oil spills. The failure to do so by June 10 would see the Liza Phase One Permit being suspended. That project is currently producing 151,000 barrels of oil per day.

The shareholder in her proposal said, “Clearly, ExxonMobil is not immune to risks of environment-related litigation. However, it discloses what we believe is insufficient information on these risks, leaving shareholders with an inadequate means to assess the future value of their investments.” The company should take the steps necessary to provide additional disclosure regarding these risks so that the shareholders are able to properly evaluate potential impact such risks may have on the shareholder value.

The shareholder also argued that environment-related litigation poses an increasing risk to oil and gas investments. BP paid more than US$60bn in criminal and civil penalties and remediation costs following the Macondo blowout, while Shell, another oil major, has been ordered by a Dutch court to reduce its carbon emissions by 45% by 2030.

“We have observed a recent trend of courts cancelling energy production permits (e.g. in Australia, South Africa, Brazil), which poses a particular risk for investments in new production. These cancellations allegedly result from non-compliance with environmental laws and the incompatibility of new production with climate goals.”

The shareholder said it is agreed by many Exxon investors that courts may now use as a point of reference the International Energy Agency’s assessment in its 2021 report Net Zero by 2050 that no new oil, gas, or thermal coal projects can be approved by relevant licensing authorities in order to meet Paris Agreement emissions goals.

She said, “These environment-related lawsuits are often lengthy and we believe that the direct and indirect risks posed to the business and shareholder value in case of losing some of these lawsuits appear substantial, and shareholders deserve proper disclosure of these risks.”

ExxonMobil’s affiliate, Esso Exploration and Production Guyana Limited (EEPGL) and the Government of Guyana have finalised discussions for a US$2B parent/affiliate company guarantee for oil spills. Both have also filed an appeal against Justice Kissoon’s order for unlimited financial coverage. The decision on their application for a stay of the order will be issued before June 7, 2023.

 

G-Boats Guyana launches tugboats for ExxonMobil FPSO operations

By Cassandra Khan,   June 1, 2023

St. Ignatius and Brickdam Secondary students win naming competition for tugboats

G-BOATS, local subsidiary of Edison Chouest Offshore (ECO), an American company specialising in supplying vessels to global Oil & Gas operators, launched two new tugboats at the Kingston port wharf.

The vessels, A’RINRA and MADAME KALINA, were specifically made by ECO for Guyana.
They will be used to aid ExxonMobil Guyana’s Floating Production Storage and Offloading (FPSO) ships into tankers that will export the oil.

Ross Chouest of G-Boats, noted that the two tugboats took three years to build.
The names A’rinra and Madame Kalina were submitted by a Grade 11 student of St. Ignatius Secondary School, Raymond De Cambra, and a Grade 11 student of the Brickdam Secondary School, Kaylan Duncan, respectively, who entered into a competition to name the boats that was launched in March 2022.

The name A’rinra is a Macushi word for an electric eel which can withstand any storm or weather to get to its destination while the second name Madam Kalina was derived from the Carib tribe. The name was chosen to name one of the tugboats as it brings awareness to the tribe’s existence and contributions to the nation.

The winning schools were rewarded with a donation of US$1,000. The prizes were handed over at the Brickdam Secondary School on June 28, 2022, and at the St. Ignatius Secondary School on June 29, 2022.

Ross Chouest of G-Boats Guyana said that the ceremony celebrates the remarkable achievement of two exceptional individuals who have made their schools and communities proud.

Raymond and Kaylan used their ability to think beyond the ordinary and envisaged names that embody the essence of Guyana. He said that it was through their imaginative minds and creative spirits that the perfect names will forever grace the vessels.

“A ship’s name reflects its character, purpose, and values it represents.”

Alistair Routledge, the President of Esso Exploration and Production Guyana Limited (EEPGL), emphasised that these vessels serve as a representation of the strong partnership and growing bond between the companies and the countries involved.

He recognised that the oil and gas business requires trusted relationships.
“We rely on one another; there is no company or one entity that does everything. We are a series of companies joined together.”

The investment and expertise taken to build the vessels and dedicate them to Guyana by ECO is appreciated.

“They (the tugboats) are going to go and operate 100 miles offshore Guyana…that is where our tanking loading operations take place.”

Routledge said that he hopes the experience of boarding the vessels and meeting the crew, including a Guyanese first mate, would leave them inspired and wanting to become a part of Guyana’s oil and gas industry.

“I hope that inspires you to be a part of this industry which is going to be here in Guyana for decades to come. You can have a full career in your lifetime in the oil and gas industry in Guyana. It is still at the beginning of a multi-decade journey for the country.”

Minister of Education, Priya Manickcand was pleased to have schools involved in the naming process of the vessels.

“…because you involved schools and you did it through the Ministry, that means all schools were involved and that our children, were able to, as representatives of Guyana, to leave a mark on the vessels that will do much more than we can probably predict here, so I thank you for involving Guyana’s schools.”

Minister Manickchand emphasised the ongoing efforts to implement universal secondary education in Guyana, recognising it as a monumental undertaking. She stressed the importance of ensuring that every child in the country has equitable access to high-quality secondary education and noted the government’s dedication to achieving this goal.

They are actively working towards providing every student with the opportunity to receive a high-quality education at the secondary level.
“It does not exist right now because our geography poses a challenge where you have a village with only 40 children across levels. It is difficult to provide secondary education of a high international quality for that village.”
She highlighted that Guyana has achieved universal primary education.

 

 

Sanctity of Exxon contract

Jun 02, 2023

The ‘sanctity of contract’ principle was invoked by the People’s Progressive Party (PPP) administration to avoid renegotiating the lopsided agreement signed with international energy titan, ExxonMobil, who feared it could deter investors. Two weeks ago President of ExxonMobil Guyana, Alistair Routledge told media at its Kingston, Georgetown office, that it would not turn its back easily on the vast resources discovered offshore. Now that the company has essentially said there is room for changes to the deal for Guyana to get more, the government is still not prepared to go after better terms. Vice President Bharrat Jagdeo told media that seeking renegotiation at this point would affect the pace government has worked to build to extract the resources.

“My concern has been about the killing of the momentum and this is where we have a fundamental disagreement…two things we have explained already, net zero is already upon us… the big countries, particularly those who are producing oil, .. don’t want new entrances in the market because they have (to) preserve their monopoly.”

Meanwhile, climateers insist that Guyana does not touch the resources discovered offshore

“As the years pass by, it’s getting even harder to do so.” The Biden administration just passed a new law that will place green technology developed in other parts of the world at a disadvantage. As part of the act to raise the debt ceiling in the country, the United States is now allowing oil and gas exploration in a part of the state they had initially prevented.

“We have to look out for our own here in this country…” For people who explore for the oil now, early enough and actually start the production there is a tiny window.” The former President noted that Suriname and other countries are struggling to move to a stage where there is a commitment to invest.

Guyana is still attractive , so government capitalised on this by launching an auction and pushing for new Floating Production Storage and Offloading (FPSO) vessels to come on stream.

“There would be a time in the future, you would not be able to raise money because of ESG (Environmental Social Governance) and because of what shareholders are pushing for many of these companies, to switch to renewable energy, that you may not be even able to do this.”

It is important to understand the dynamics of the industry and appreciate the global trends before taking a national position. “It can’t be just about a one issue position or it’s not a one variable solution. There are multiple variables that have to be all combined…but right now, the key thing is getting the investment dollars to flow.”

85 countries are now auctioning oil blocks with the hope of getting oil and gas companies to invest.

“What we are worried about in spite of all of what you just said is that it would kill the momentum. Momentum is everything and it is the momentum that we are worried about and it’s hard to pick up momentum back again.”

Increasing momentum does not mean the government would be lax on other aspects of the industry. The government has strengthened the Environmental Permits while the country’s capacity to fight an oil spill has been vastly increased with a capping stack in country, which would plug a leaking oil well.

“So this is my position on it. It’s the momentum that I’m worried about. Not so much that what any negotiation would do. It will definitely kill off probably the movement on the other FPSOs that are planned.”

Routledge on May 19 was being pressed to return to the table with leaders to discuss more fiscal benefits for the nation, in light of the continued success of the oil block- which happens to be the country’s largest – when he described the contract as “competitive”.

Routledge claimed that this is the “most valuable contract the country has”, therefore, the country ought to focus on how to make it work.

“The moment we try to change the contract, the investment will stop, the local content development will stop.”

Asked whether ExxonMobil would leave if the administration sought a 10 percent royalty, after over 30 discoveries since 2015. Routledge explained, “History will tell you that when disputes start about contracts, investments stop, investors hate uncertainty. , No company walks away easily. I have lived through Venezuela in 2004- 5- 6- 7 when the government imposed a new contract on our operations and we worked extremely hard to avoid that but the government created an environment where we couldn’t stay and it ended up in international arbitration and in the meantime, no further investment, you can see what happened to the country, it has a huge endowment of resources, but sadly has lacked investment for many years and has moved from a production of 3 million barrels to less than 600,000 barrels of oil per day.”