ExxonMobil eyes gas development prospects under new drilling drive

22 August 2024

Company has seven big projects underway in the Stabroek block

US supermajor ExxonMobil is conducting further appraisal work in the prolific Stabroek block offshore, with the drilling campaign targeting reservoirs in areas that could potentially host the company’s first standalone natural gas development in the country.

 

Workshop on oil spill response preparedness

August 28, 2024

Guyana is intensifying efforts to enhance capacity for oil spill preparedness and response with a four-day workshop on oil spill contingency planning at the Guyana Police Force Headquarters, conducted by the Regional Activity Centre/Regional Marine Pollution Emergency, Information and Training Centre for the Wider Caribbean Region (RAC/REMPEITC-Caribe). The workshop is sponsored by the International Maritime Organization (IMO), the United Nations Environmental Programme Regional Coordination Unit, and RAC/REMPEITC-Caribe. (DPI)

Prime Minister Brigadier (ret’d) Mark Phillips emphasised the critical importance of the workshop at the opening ceremony . “This workshop presents a distinct opportunity for us to develop a deeper understanding of oil spill contingency planning and to refine the skills required to effectively implement our national oil spill contingency plan.”

Guyana has had a national oil spill contingency plan since 2020, which was tested in an exercise in 2022. The workshop coincides with the ongoing drafting of the National Oil Spill Prevention and Management Bill 2024. “We are at the stage where we want to put a bill before the National Assembly to make this whole issue lawful … This workshop serves as a precursor to the passage of critical legislation, further solidifying our commitment to oil spill preparedness and response.“

Underscoring the importance of preparedness in mitigating the risks associated with the burgeoning oil and gas industry, the Prime Minister stated that the repercussions of an oil spill could be far-reaching and long-lasting, impacting everything from tourism and fisheries to the overall health of the natural environment.

Preparedness involves a comprehensive understanding of potential risks, a robust response framework, and the necessary resources and capabilities to act swiftly. It also requires collaboration among government agencies, industry players, the private sector, non-governmental organisations, and the public.

Thus far, Guyana has taken several proactive measures to strengthen its oil spill preparedness and response capabilities. Passage of the Petroleum Activities Bill 2023, replaces the outdated Petroleum Exploration and Production Act of 1986. This new legislation ensures responsible and modern management of the petroleum industry. The government has significantly strengthened oil permits and environmental regulations to minimise liabilities and manage environmental and economic impacts.

In the event of excessive flaring, companies are required to compensate at a rate of US$5 per ton of carbon dioxide equivalent. The workshop would see participants being exposed to mechanisms such as the readiness evaluation tool for oil spills, which will help identify gaps in the national contingency planning and enhance overall response capabilities. RAC/REMPEITC-Caribe representative, Matthew Martin commended the progress made by the government in preparedness efforts.

“We have got a great start from what is already there with the work that has been put in so far for increasing preparedness for oil spill response, and over the four days, we are going to look at how we can improve the existing national oil spill contingency plan and become even more prepared, not only in Guyana but in the region.”

 

 

Gas-to-energy project advances

August 22, 2024

The Gas-to-Shore development in Wales on the West Bank Demerara (WBD) is making significant progress, with a substantial allocation of US$400 million from government resources . Vice-President Dr Bharrat Jagdeo,  told media that the project is proceeding despite delays in securing a US$660 million loan. Senior Minister for Finance Dr Ashni Singh, is scheduled to meet US EXIM Bank executives to accelerate this request .

“We have, from our resources… paid about US$400 million, more than half of the project [cost]. That’s even better for us. Now, we can get reimbursed for it because of the way it is structured.”

A 200-kilometre pipeline bringing gas from the Liza Destiny and the Liza Unity onshore to West Coast Demerara , will continue for 25 kilometres to the Natural Gas Liquid (NGL) plant to be constructed in Wales. Upon completion, the GtE project will have significant impact on the economy, attracting sustainable investments across various sectors and creating numerous job opportunities.

“The project will be done, even if it means funding it from our own budget.”

The cost of energy is expected to drop by 50 per cent, resulting in more affordable and stable electricity for Guyana. The government partnered with ExxonMobil to develop the infrastructure and facilities to transport and process the gas for power generation and other applications.

 

 

UK talks business, investment in energy, maritime, construction

August 26, 2024

The British High Commission concluded a productive visit by His Majesty’s Trade Commissioner (HMTC) for Latin America and the Caribbean, Jonathan Knott who discussed relations, focusing on business proposals under consideration by the Government of Guyana with President Dr Irfaan Ali. Accompanied by British High Commissioner Jane Miller, Camilo Neira of UK Export Finance (UKEF), D’Jamila Ward, Caribbean Regional Director for Trade and Sherwyn Naughton, Country Director for Business and Trade, Knott held discussions with Minister of Public Works, Deodat Indar. Talks centred on investment opportunities inenergy, maritime, and construction sectors, reinforcing the UK’s commitment to supporting Guyana’s development.

The UK delegation discussed opportunities for improved commercial relations and access to finance through UKEF to support projects in Guyana with the British Chamber of Commerce, Private Sector Commission, Georgetown Chamber of Commerce & Industry, Georgetown Manufacturing & Services Association, the Women’s Chamber of Commerce and several other local business-support organisations.

The visit included a tour of the UK-funded Maternal and Child Hospital at Ogle, where the delegation assessed the significant progress being made and the role UKEF played in making this possible. Earlier this year, UKEF increased its risk appetite from £750m to £2.1b to support both public and private sector projects in Guyana.

The British High Commission said, “This visit underscored the UK’s strong business interest in Guyana and highlighted the enduring spirit of long-term partnership, knowledge transfer, and development.”

 

 

 

US-Guyana partnership in mineral-mapping

August 22, 2024

MoU signed to boost economy and employment

Through implementation of a new Mineral Mapping Exercise, Guyana has the potential to discover and exploit numerous untapped resources. The exercise represents a new opportunity, as it is a collaborative effort between the Ministry of Natural Resources, the Guyana Geology and Mines Commission, and US company, Global Venture Consulting.

The historic endeavour was launched with the signing of a Memorandum of Understanding (MoU) at Duke Lodge; where Minister of Natural Resources, Vickram Bharrat and United States Ambassador Nicole Theriot, delivered remarks alongside officials from the Guyana Geology and Mines Commission.

While mineral mapping has been conducted on a limited scale, it has not been executed on such a vast scale as anticipated in the upcoming months. The US$1.9 million project by Global Ventures will take a deeper look at the nation’s vast natural resources; it aims to give jobs to Guyanese, invite foreign investors and open doors for new resources to be added to the economy.

Minister of Natural Resources Vickram Bharrat delivered the feature address at the event, emphasising the congruence between the new mineral-mapping exercise and the government’s current work in the geology and environmental sector.

“This is in line with what our government has been always advocating for, economic development balanced with environmental sustainability.”

He addressed the crucial issue of natural sustainability. “We cannot, or we should not, be at any of the extreme ends. There must be a balance between economic development and environmental sustainability. For too long we have been allocating and working in a manner that is not in keeping with best practices. Meaning our data is a bit outdated.”

He also shed light on the employment aspect of the still vibrant mining sector.

“Mining in Guyana employs almost 40,000 Guyanese, directly or indirectly. Many people, especially in the hinterland communities, are engaged in mining activities.”

This new endeavour will bring about a profound change in the hinterland areas, where a large portion of the population depend heavily on mining for their livelihoods.

“Traditionally, we know the indigenous communities were engaged in farming and hunting, but it has evolved. It has changed a lot over the years. Today, many indigenous communities are involved in logging activities and mining activities. This project, too, will help those communities so that they can collaborate and work with the Guyana Geology and Mines Commission, mine in the same manner, and their mining activity can be more lucrative and viable for those small communities.”

The mining sector is experiencing ongoing enhancements and continues to attract substantial investments.

“I think yesterday we witnessed the highest gold price ever. So that by itself is an encouragement for forces wanting to get into the mining sector, especially small and medium- scale level[s].Bauxite is turning around and it is a very important sector for us, especially in the creation of employment in Region 10.”

Emily King, Chief Operating Officer of Global Ventures, elaborated on the role her company will assume in the project.

“Our team moves forward immediately. We’ll be responding by providing additional information, aerial surveys, and our round of work in the next phase will provide valuable insights for greater US stakeholders.”

She emphasised that Global Ventures has a significant commitment to Guyana and the preservation of our natural resources, aligning closely with Guyana’s policies and the utmost national standards.

US Ambassador Nicole Theriot noted the significance of Guyana’s natural resources and emphasised the imperative of preserving them alongside exploration efforts.

“This is a country of remarkable natural beauty and rich biodiversity. It’s also blessed with significant mineral resources that hold the potential to add to the country’s already impressive growth.”

The mineral-mapping exercise aims to keep track of the country’s natural resources before extraction, placing the conservation of natural resources and Guyana’s carbon credits.

“Understanding the location and extent of mineral deposits allows for the design of a more targeted extraction process that minimises environmental impact. Effective mineral mapping will also attract international investment from the US and from other like-minded countries that value good business ethics and [the] rule of law.”

Echoing sentiments of the minister, Ambassador Theriot said the exercise has the potential to boost the sector and economy of Guyana.

“This mineral-mapping project is so much more than just a scientific exercise. It’s a strategic tool that can drive economic development, promote environmental sustainability, and improve the lives of people across Guyana.”

The government will initiate this multi-year project which is intended to address the approaches to sustainably manage and grow the extractive sector within the context of the Low Carbon Development Strategy 2030. When completed, the mineral inventory will contribute to low- impact mining and improve mineralised areas which are objectives outlined in the LCDS 2030.

The following are areas of priority and potential for the Gold and Non-traditional mineral inventory for the year 2024: the North-West Mining District, the Cuyuni Mining District, the Mazaruni Mining District and the Potaro Mining District.

 

 

US$1.8M contract with U.S. company to map mineral hotspots

Aug 22, 2024 News

The Ministry of Natural Resources (MNR) and Global Venture Consultancy of USA signed a US$1.8 million deal to conduct a comprehensive mineral mapping of the nation’s mining hotspots.

The multi-year project for Mineral Mapping Study of Guyana’s Mineral Resources, targets both traditional gold reserves and emerging non-traditional minerals. Areas identified as priority for 2024 are the North-West Mining District, Cuyuni Mining District, Mazaruni Mining District, and Potaro Mining District. The project is intended to add to a previous inventory which was completed in 1968.

Global Venture Consulting’s bid of US$1,981,218 was ultimately selected following a tendering process. However, at the contract signing the ministry was able to negotiate a 5% reduction of the cost, to US$1,875,000.

The contract signing event was attended by Minister of Natural Resources, Vickram Bharrat, Permanent Secretary of MNR, Joslyn McKenzie, Her Excellency Ambassador Nicole Theriot and others.

In his address, Minister Bharrat said, “This project will reenergize the small and medium scale sector in Guyana we know that large scale is progressing well…” Bharrat noted that the project will also benefit indigenous communities to work with the Guyana Geology Mines Commission (GGMC) so that their mining activities can be more lucrative. He noted that instead of spending large sums on prospecting or prospecting in areas that do not yield great benefits, when the project is completed the government will be better able to point Guyanese to mineralised areas.

“What is also important too with this project is to identify whatever critical minerals that may exist in Guyana….” Bharrat said the project ties in with Guyana’s Low Carbon Development Strategy (LCDS 2030), as the world moves towards renewable energy. “Critical minerals will become more critical…we believe that there may be traces of critical minerals in Guyana,” the minister said. Bharrat is hopeful that the project would provide information on Guyana having minerals like Lithium, which he said is the most sought after.

For her part, the Chief Executive Officer (CEO) of Global Venture Consulting LLC, Emily King stated that her company is ready to map out the mining industry for a better understanding of the country’s mineral potential. She also spoke about the cutting-edge technology that Global Venture Consultancy will be using for the project.

“By crafting these mapping and surveying plans with precision, Guyana is set to leverage cutting-edge target detection, and predictive analytic tools. Guyana is poised to become the very first country to undertake almost a national scale mapping programme using this innovative approach.”

Ambassador Theriot in her address underscored that mineral mapping provides a clear picture of what lies beneath the surface.

“This is a country of remarkable natural beauty and rich biodiversity. It is also blessed with significant mineral resources that hold the potential to add to the country’s already impressive great, from gold and diamonds to bauxite…these minerals are not only a cornerstone of economic growth but they are key to unlocking new opportunities to progress.”

She added, “mineral mapping is a fundamental process to understand the full extent of these resources, it involved comprehensive analysis and document of mineral deposits across the country, providing crucial data that can guide policy making, attract investment and ensure that resource extraction is conducted in a responsible sustainable manner.”

This year, the sum of $400 million has been allocated for the project. At his recent press conference, Minister Bharrat had underscored the importance of updating Guyana’s mineral inventory, noting that the existing data is severely outdated.

“In mining, the mineral inventory, or mineral mapping, has not been updated for decades. So today, if we point a miner in a direction and say that there is mineral there, that data is old data that was that would have been acquired maybe 40, 50 years ago, and a lot has changed from now to then,” Bharrat stated.

“We will start with specific mining districts… because we have a larger amount of our small miners and major scale miners concentrated in those four mining districts,” Bharrat said. Moreover, he stated that the project is not only about identifying existing mineral deposits but also about positioning Guyana to tap into the global demand for critical minerals, particularly those needed for renewable energy technologies.

“So this is a project that will help us significantly to identify not only where our deposits are, but all minerals, and you know, in keeping with what is happening around the world, especially in the transitioning phase from fossil to renewable, critical minerals are critical. Critical minerals are needed. They are heavily in demand,” Bharrat outlined. He pointed out the global interest in minerals such as lithium, especially in South America, and suggested that Guyana could potentially have traces of these valuable resources. So this project is going to help us to identify all of these minerals in that we have. So, it will help us in the allocation of properties, and to ensure that we see a general forest,” the minister concluded.

 

 

Former Exxon VP secures contract to monetise gas

Aug 20, 2024

 A company established by the former Vice President of ExxonMobil Guyana Limited (EMGL) with less than a year experience was awarded a contract to monetise Guyana’s gas resources.

Founder and CEO of Fulcrum LNG, Jesus Bronchalo worked with Exxon for almost two decades.

Government advertised earlier this year, locally and internationally, through a Request for Bids (RFB) for the Design, Finance, Construction, and Operation of essential gas infrastructure to support upstream developments in Guyana.

Proposals were invited from qualified developers for comprehensive solutions to develop the required gas infrastructure, which includes the necessary pipelines to connect and monetize upstream gas.

Of the 17 bids , Fulcrum LNG, was selected by the Government . Founder and CEO worked 19 years and one month for ExxonMobil where his last position was Vice President and Chief Commercial Officer for the Guyana operations until his tenure ended in February 2023.

5 months later- in July 2023, Bronchalo launched the energy company, Fulcrum LNG, claiming “experience and expertise across all aspects of the oil and gas value chain, including low-carbon solutions.”

The company website stated, “Our gas infrastructure development approach enables faster development and execution of projects which allows for faster revenue generation, delivering reliable energy to the world, and providing decarbonization alternatives by switching to significantly less-polluting energy sources.”

The company said it partners with some of the industry’s leading global engineering, technology, and finance firms and global LNG buyers, to deploy the most advanced technologies and sustainable solutions that will generate maximum value for its clients.

Details of the deal between the GoG and the former ExxonMobil Executive remain sketchy. Fulcrum LNG would be entrusted with developing the gas resources for monetisation. The Production Sharing Agreement (PSA) with Exxon highlights the need for the company to conduct a feasibility study for utilisation of the gas resources.

The Ministry of Natural Resources in June defended the award of the contract to Fulcrum LNG. It said an “independent and technically competent” evaluation team was established by the ministry to conduct a detailed and robust evaluation of all 17 bids.

Fulcrum LNG was deemed the most responsive compliant bidder and ranked No. 1, followed by CNOOC Power and Gas Group, ranked No. 2, and a consortium of local and international companies which were ranked No. 3.

“As such, Fulcrum LNG will be supporting the government and the Stabroek Block operator, ExxonMobil Guyana, to utilise the non-associated gas – serving as an independent development.”

The ministry acknowledged that while Bronchalo was a former senior employee of Exxon, at the time of the evaluation, his involvement in Fulcrum LNG was known, and his previous relationship with ExxonMobil was not seen as presenting a conflict of interest, since he had severed all ties with the company.

President Irfaan Ali announced the award to Fulcrum LNG in June.

“We recently concluded the expression of interest for a major gas project outside of the Wales development (Gas-to-Energy project). We had a company identified, that company with the Government of Guyana and Exxon and its partners will now have to have discussions and we will together arrive at a model and a plan as to how we will advance this major gas development in our country.”

The government has since assembled a technical team to participate in discussions and draft a model for the utilization of the gas resources.   A Heads of Agreement will be signed by next year.

“What we want is the monetisation of the gas as fast as possible to add an additional revenue stream and it’s not only gas, it’s the condensate that comes with it. That has tremendous opportunity and potential for us but we can’t know that, we can’t know the degree of opportunity until the full analysis, technical (and) financial, is completed for us to know what we have.”

Possibilities are being examined, including the export of energy through the development of an energy corridor to Brazil and Suriname, marketing of by-products from natural gas, a second power plant to position the country as an exporter of electricity.

 

 

 

French company Beicip Franlab wins contract for Stabroek audit

August 20, 2024

Minister of Natural Resources, Vickram Bharrat revealed that a contract was awarded to a French firm to conduct a petroleum reservoir audit. Earlier this year, the Ministry issued Expression of Interest for “Consulting Services for Conducting Petroleum Resources and Reservoir Audit.” which attracted proposals from Stratoil Energy Services of Egypt,  Beicip Franlab of France, and DeGolyer & Mac Naughton Corp (D&M) of Texas, USA.

The May 2024 opening of tenders at the National Procurement and Tender Administration Board (NPTAB) revealed that Stratoil bid US$381,200 (excluding local indirect taxes), US$129,000 (local taxes) and Beicip Franlab bid US$451,930 (excluding local indirect taxes), US$192,070 (local taxes).

The ministry’s advertisement stated that the Government received financing of US$20 million from the World Bank (WB) towards the cost of the Guyana Petroleum Resources Governance and Management Project (GPRGMP) and intends to apply part of the proceeds to pay a consulting firm for advisory services, technical support and training and capacity strengthening services to the GoG. The objective of the assignment is for the Consultant to provide these services through the Ministry of Natural Resources, the Sector Regulator – Guyana Geology and Mines Commission (GGMC) or the Petroleum Commission (PC) once established – and other attendant Ministries, with the aim of enhancing core capacity to review, approve, authorise,and oversee, monitor and report on oil and gas reserves and resources.

At his Mid-Year press conference Minister Bharrat revealed, “A French company has been awarded the contract to do our reservoir audit. It is something that we should have done for a long time now, but I’m happy that we’re going to start this soon.”

Disclosure about the audit intensifies debate on the true figure of Stabroek Block reserves.

According to Minister Bharrat, the reserves have only increased by 600 million barrels since the last official update in 2022, which placed the estimate at 11 billion barrels. Since then, operator ExxonMobil Guyana Limited (EMGL) announced eight discoveries. In its 2023 Annual Report released this year, consortium partner, China National Offshore Oil Corporation (CNOOC) stated that Lancetfish, discovered in April 2023, averaged 100 million tons, an estimated 746 million barrels of oil.

Minister Bharrat addressed an estimation by international experts from US analytics company S&P Global which assessed current Guyana basin reserves at 18.7 billion barrels.

Chairman of Wales Development Authority, Asgar Ally told the Jamaica Stock Exchange Conference in January that some 15 billion barrels of oil had been discovered to that date in the Stabroek Block.

 

 

 

Global champions bid to establish petroleum data repository

August 16, 2024

Two international companies signalled their interest in helping Guyana establish its petroleum data repository, a project being executed through the Ministry of Natural Resources which had issued a tender seeking applications for the ‘Procurement of Data Management Services for Guyana’s Exploration and Production Data’ project. Opening of bids at the National Procurement and Tender Administration Board (NPTAB) revealed that Halliburton and Schlumberger Guyana Inc. were the only two companies that submitted proposals for the contract.

Minister Vickram Bharrat told media that it is to establish the data repository in country. “Presently we have our data in Houston (USA) being held by other companies…seismic data and everything …”

Many countries producing petroleum for four or five years do not have a local data repository and so setting up one in Guyana is “ambitious” for the country’s data not to be elsewhere.

“After four years (of producing oil) we are already moving to establish our own data repository in country, so that we can have our own people manage it, analyze it and its money making. It’s a very lucrative investment that we are taking on because not only spending money to set up the data repository, it is about getting our people to work there and to sell that data to companies that will seek to do exploration in Guyana, it’s worth a lot of money, so it’s like an investment.”

From the previous bid round alone “companies had to pay US$2 million just to access the data on those ministry sites of which we get a part but if we can have it in country it means that we will make that kind of money when we sell our data, because our data is in demand, everybody wants data from the Guyana basin.”

Last year in February in Parliament, the minister related that the country receives 50 percent and not 100 percent of the revenue or service charge because of the absence of the data repository in country. This data management system is particularly important as the country continues to develop its oil and gas sector as there will be more data required, not only from Stabroek Block but all other blocks offshore, onshore and near-shore.

In this year’s budget estimates – Volume 3, approximately $700 million was allocated to launch this data management system and other projects under the Ministry’s ‘Oil and Gas Sector Development Programme’. It is being funded by a loan from the International Development Association (IDA), an international financial institution which offers concessional loans and grants to the world’s poorest developing countries.

 

 

 

Guyana oil sector management

August 16, 2024

– despite lowest royalty rate, zero taxes on oil companies, no ring-fencing and lack of independent oversight

Minister of Natural Resources, Vickram Bharrat, defended the management of Guyana’s oil sector, asserting that it is one of the best-managed sectors globally. He told media,

“Now with the oil and gas sector, .. from the inception and some people may not agree but .. from a neutral point of view, ..Guyana’s is one of the better managed oil and gas sector in the world.”

Transparency and accountability are key pillars of Guyana’s oil sector management. It is rare for any oil-producer to have its chief policymaker, Vice President Bharrat Jagdeo, engage with the public and media weekly.

“We did a quick check to see how many oil producing countries in the world will have the Vice President .. who is the lead policy maker on the oil and gas sector, speak on the sector every week …But every single week, we have the chief policy maker .. Dr Bharrat Jagdeo, speak on the sector and give the opportunity to the media and anyone else to ask questions …”

He stressed the government’s commitment to transparency, noting that information is regularly shared through various channels, including websites and press releases.

“There is nothing to hide in the management of the oil and gas sector.” Few other countries have leaders who engage with the media about the oil and gas sector as frequently as in Guyana, where “[the] few countries that do, do so .. ten times a year.”

To further prove his point, he referenced the National Resource Fund (NRF) as testimony to the commitment to transparency and accountability in the sector. “If you look at the NRF for example, anyone from any part of the world can check to see how much money is in the NRF.”

There are only two ways in which money can be withdrawn from the NRF, through the National Budget, which must be debated and approved by the National Assembly, or in the case of a national disaster, which also requires parliamentary approval.

Addressing criticisms about the management of the sector and its revenues, Bharrat countered, “They are strong measures placed in the NRF Act to ensure that there is proper accountability and transparency and for you to know how much money flows into that fund.”

Bharrat attributed the success of Guyana’s oil sector to lessons learned from other countries.

“It is because we have simply learned from the mistakes made by other oil producing countries; it is because we had that advantage of looking at other models around the world because we are a late starter. We had the advantage of looking at models that failed and models that were successful and we have drawn from different models and created one that is best suited for Guyana.”

Guyana is now being recognized as a model for other countries. Guyana today, one of the newest oil producers in the world, is being used as a model country. Namibia’s Minister of Energy led a delegation to study Guyana’s model to adopt it for their emerging oil sector.

Guyana’s oil contract with ExxonMbil and the management of the sector have been widely criticized globally. International Financial Expert, Tom Sanzillo told CNBC, the leading business and financial news network in the world, the ExxonMobil deal is one-sided.

“Because Exxon pays no taxes, Exxon didn’t put up the insurance they are responsible for putting up, and Exxon has a special arrangement with a maximized profit where they get their profits first and Guyana gets theirs later.”

While the Government acknowledged that the deal with Exxon is grossly in favour of the company, it has refused to demand a renegotiation. The government’s position is that asking for a revision of the lopsided terms will hamper investor confidence and sully the nation’s reputation on the global stage. The administration insists that Guyana must make do with what it has.

 

 

Petroleum among better-regulated industries in the world

August 25, 2024

Vice-President Dr Bharrat Jagdeo told media that Guyana has one of the better-managed oil and gas industries in the world as the country continues to build a robust economy. Guyana is an example because of its management of the oil and gas sector and rapid changes in a short period. Operations are rooted in transparency and accountability in keeping with government efforts to guarantee robust management practices.

Guyana established the Sovereign Wealth Fund from the outset of oil production to save, which many other oil producers—including Norway—have not always done.

“When you look at the provisions of the fund, there is no direct charge on the Natural Resource Fund. Some countries have that direct charge on the Natural Resource Fund. We removed that. So, every cent that you spend of oil money has to go through a budgetary process – which means Parliament- you can’t spend oil money outside the approval of Parliament. Not many countries have that. A lot of countries can go into the fund and spend the resources without seeking approval of Parliament.”

Money is transferred from the Natural Resource Fund (NRF) to the budget in Guyana openly and transparently.

“We have the strongest disclosure agreement anywhere in the world in terms of receipt of oil money, with a 10- year penalty jail term for the Minister of Finance for failing to disclose. And that is [on an] ongoing basis-every three months. We have strengthened the management of the fund by putting in a board instead of the Minister of Finance having sole oversight.”

Guyana adopted a model that is suited to the needs in this sector, as a result of the government’s capacity to learn from the errors of other oil-producing countries.

“[We have] some of the best practices in the world in our sovereign wealth fund apart from the saving. That is an example many countries are using now, how Guyana did that?

The second area is a local content policy. Trinidad and Tobago had a local content policy but not a law. It took them to get to that policy nearly 100 years after they were producing oil and gas. We started it as soon as we got back into office, forcing oil and gas companies to hire and to procure from Guyanese…”

Guyana also passed a new Petroleum Activities Act , one of the most modern in the world, providing Guyana with the tools to manage the contemporary oil and gas sector.
This act has intensified guidelines on the exploration, production, storage and transportation of petroleum in the country. It also greenlights the construction of an oil refinery in Guyana.

“We are now moving to pass oil spills legislation… which very few countries have done in such a short period of time. We have done all of this in a relatively shorter period of time than countries that are better equipped, better resourced than us, even developed countries haven’t even gotten to as yet. So, it’s one of the better-managed industries in the world… Now, that doesn’t mean that we don’t have problems with the 2016 agreement, but I am telling you about the management tools and what we have done.”

Guyana is one of the few countries which has a non-flaring policy. It implemented a carbon tax for unscheduled flaring. These initiatives and policies in the oil and gas sector have led to Guyana being utilised as a model nation.

“These are best practices that are used around the world. So, that’s why in spite of all the negatives, we get here in Guyana, globally and in many of these countries that are now trying to emerge as oil and gas producers, they are looking to the Guyana example to learn a lot about how we have done this.”.

Recognising that there is always need for improvement and expanding capabilities, Dr Jagdeo highlighted that Guyana currently is relying heavily on external consultants for guidance.The government is implementing actions to encourage local participation in the industry. Local consultants will eventually replace external consultants.

“But what we have now, is light years away from what we had in 2020, practically nothing. No local content law. The 1986 law we are managing with, in the sector. No new PSA. All of those things. So, we never used to go to auction at that time. We didn’t have any seismic [survey] to prove our reserves; we are going in this area too. [We] didn’t have oil-spill legislation. There were no carbon taxes. It’s light years from what we had.”

 

 

 

Oil refinery not feasible right now

August 17, 2024

Government has not ruled out having an oil refinery here but does not see it feasible at this time as consistent crude supply, shallow waters and storage are issues that first needs addressing, Minister of Natural Resources Vickram Bharrat has said.

“We will have to do a bit more assessment and allow the companies to do their assessment as well. But it’s something that the government is still inclined to have as an investment in Guyana along with storage. …It makes no sense having a refinery in Guyana and we cannot supply the crude to it. It makes no sense because you simply have to import crude. That is defeating the entire purpose,” Bharrat told media .

 

 

Guyana ‘unapologetic’ in exploring natural resources

August 17, 2024

–Dr. Jagdeo highlights country’s track record of conservation of forest, ecosystems

Vice-President, Dr. Bharrat Jagdeo, responding to critics, told media just over 50,000 persons are employed in the mining sector and the government has consistently supported local miners while simultaneously pushing conservation efforts to protect the forest and its biodiversity.

“We are unapologetic about encouraging mining in this country. Mining provides a significant part of our gross domestic product; it creates a significant part of income for many Guyanese. It contributes to employment opportunities for tens of thousands of our people,” Any responsible government would have to ensure that mining does well because it is a source of income and employment opportunities for our people.”

Over 85 per cent of Guyana’s land mass is forests — with a very low deforestation rate of less than one per cent.

“We have done mining in an environmentally safe manner in the past several decades, in spite of the growth of mining in this country. We have kept our ecosystems intact, we have kept our forest intact, we have the lowest deforestation rate in the world and the second highest forest cover in the world.”

While Guyana has consistently managed to conserve its forest, the government has equally supported mining.

“We will continue to support miners in this country. We will continue to ensure that mining is not done to the detriment of the environment, as we have done and our global credentials on protecting eco-systems is a very strong credential; it’s internationally recognised.”

Natural Resources Minister, Vickram Bharrat, had recently said that over 700 small miners have been able to access land tenures.

“Over the last three years, we have held three lotteries to date, and over 550 small miners have benefitted from their own mineral property. This year alone in Bartica, 150; in Mahdia, 200 that is 350 in 2024 alone, small Guyanese miners who now have their permit to work on their own plot of land.”

He reiterated that the government has been encouraging more investment in more lucrative forms of mining.

“I can say safely, over 700 small miners have land tenures over the last three to four years, the 550 that I mentioned is only through the lotteries.”

He highlighted the important role that the forestry and mining sectors play in the economy.

“The [Guyana Forestry Commission] GFC has been doing an excellent job in managing our forest. We can boast even though we have a vibrant forestry sector that we have one of the lowest deforestation rates in the world.”

The country has over 100 new sawmills and over 50 new lumberyards. The mining sector recorded exponential increases in sand production, loom and bauxite.

Guyana reported a decline in illegal mining in its forested regions as a result of investments in technology. Illegal gold mining in the Amazon Basin has been an issue stakeholders have been working to address. President Irfan Ali said,

“If you look at our population and the size of our defence force and our law enforcement capability, you will see how difficult it is to police our geographic space or to monitor it. Today we can deploy technology that is helping us and we are investing in that technology so we have greater success in identifying illegal mining and in bringing those who are culpable to justice.”

There is an “inextricable link” between national security and natural security that requires attention.We have had tremendous reduction in illegal mining. We have more constant monitoring. We have invested more in field officers, and we have more technology deployed to help us in mitigating against this.”

 

 

PSA finalised, licence to be issued to oil bidders

August 14, 2024

Minister of Natural Resources, Vickram Bharrat, told media at the Guyana Forestry Commission that a licence will soon be issued to the six companies that submitted bids for eight oil blocks within shallow and deep-water areas, as the Production Sharing Agreement (PSA) has been officially finalised.

“We are going to issue the licence to the bidders…Some of them, especially the locals were looking for international partners. They were looking for investors, they were looking for operators. A few were ready, but we can’t do a separate PSA for every different company. We had to finalise one PSA for all the companies.”

The licenses, once issued, will officially allow companies to begin exploration and production activities.

The bidding process was highly competitive. The PSA is a critical component of the licensing process, as it defines how the revenues from oil production will be shared between the government and the companies.

The PSA was finalised with no changes to the fiscal terms.

“And you know the fiscal terms, it is 10 per cent royalty, 10 per cent tax, 65 per cent cost recovery as against 75 [per cent] and it’s a 50/50 profit sharing.”

The government proceeded with the bid round despite having limited data on the oil blocks. Normally, extensive geological surveys would be conducted to provide detailed information about the oil reserves. Conducting these surveys would have taken approximately 18 months, delaying the bid round.

“Today, I am happy to say that everyone of those six [companies] have submitted their applications to us. It is six companies and eight blocks, two companies bid for two each. We have given them the PSA, they are currently reviewing that with the intent to sign.”

There is already a minimum signature bonus requirement of US$10 million for shallow water and US$20 million for deepwater blocks agreement which these companies indicated that they are ready to pay and assured that the inking of the document will be made public.

 

 

 

UK firm secures deepwater contract

August 29, 2024

British firm CRP Subsea was awarded a major contract by a leading energy technology company to supply over 100 Distributed Buoyancy Modules (DBMs) for an oil field project located 200 kilometers offshore.

The DBMs will be deployed on two 8-inch dynamic flexible risers. These risers will play a crucial role in transporting oil from subsea installations to a flotation unit positioned above, operating at depths of around 1,700 metres.

The DBMs are engineered to manage the top tension on the floating production, storage, and offloading (FPSO) unit by maintaining a dynamic lazy wave configuration.

This is achieved using a high-capacity compliant internal clamp that applies a controlled, uniform circumferential pressure around the riser. The clamps ensure that the DBMs remain securely in place, and consequently minimising the risk of pipeline damage and extending the operational life of the field.

Ben Stubbens, Head of Sales at CRP Subsea, commented on the award, stating: “We are proud that a key customer chose us to supply DBMs for this project. It’s fantastic to see our marketing-leading internal clamp technology continues to be the solution of choice. It’s renowned for reducing installation risks and ensures reliable deepwater flexible riser operation. We look forward to future collaborations and supporting more projects for our valued customer.”

Manufacturing of the DBMs will take place at CRP Subsea’s advanced facility in North West England and project engineering has begun, with the delivery of the modules scheduled for May 2025.

DBMs are typically operated between structures and a surface vessel or platform, providing uplift generated by a two-part buoyancy element and a clamp. CRP Subsea’s unique clamping solutions allow operators to securely attach DBMs at any point along the length of a rigid or flexible pipeline or cable, ensuring the modules maintain their position.