Discoveries of over 6 billion barrels make Stabroek the queen of IOC Exxonmobil assets, adding billions of dollars in annual profit to the bottom line of company and the country in the next 5-6 years. Guyana and its potential will generate strong long-term rewards for shareholders and stakeholders.

 Exxon Mobil Investor Presentation

With GDP per capita under $7,000 and an economy based on mining and agriculture, the Commonwealth country, HQ of supranational CARICOM is ripe for oil development, with under 250 miles of paved roads across an area of 215,000 square kilometres (83,000 sq mi), exceeding the area of Great Britain of 209,331 km2 (80,823 sq mi)

Until 2015 Guyana, rich in gold, diamonds and bauxite, held minimal oil resources, located between oil producers Venezuela and Suriname. With production starting at Christmas, investments are transforming the country.

ExxonMobil will push production over 1 barrel per person by 2025, when GDP will rise by 300% to 1,000%. With gigantic wealth creation changing lives, the richest country in the hemisphere and potentially in the world, will overtake Qatar, the wealthiest country per capita with production of 0.7 barrels per person.

There is strong incentive to maximize government revenue from the project. Under the terms of the deal Guyana will receive 14.5% of revenue, increasing as ExxonMobil recuperates costs. These are considered great terms but discussions continue on the fringe end, renegotiating the contract, striking stricter deals in future. The best case here is the deal maintains its terms. As Guyana emerges on the world stage, a wealthy nation for the first time, there is a risk that it becomes tainted by cupidity and takes advantage of ExxonMobil.

A vote of No Confidence was passed as a result of the generous terms given to ExxonMobil, leading to delayed elections in March 2020.

Venezuela, with the world’s largest reserves, now in social and financial turmoil, forced ExxonMobil to halt exploration in Guyana, laying claim to the discovery. Fortunately, ExxonMobil plans exploration on the east side – the far fringe of Venezuelan claims, minimizing risks from geopolitical forces.

Resource Overview

Exxon Mobil Investor Presentation

Success in the region came after numerous 3rd party dry holes around the discovery. A garland of discoveries cast that contract in a different light, yet the situation in 2015 was not as rosy as today. Guyana had no history of oil production after a streak of over 40 dry exploration wells and little infrastructure or capacity to support production. Guyana was a total write off for Royal Dutch Shell , which sold its offshore oil exploration block that year for $1. ExxonMobil and its partners were assuming an enormous risk entering this potential development.

Becoming a global force

The unprecedented deepwater development will yield gross recoverable resources estimated at >6 billion barrels.

ExxonMobil aims for 1 million barrels per day of production in this region alone where hundreds of other operators produce >100 thousand barrels. 14 fields amount to almost 15% of this in recoverable reserves. The size of the resource is expected to grow significantly over the coming years.

Stabroek success was a long time in the making with seismic studies from 2009-2013 onwards leading to massive discoveries. Without additional resource discoveries, the planned production rates, even with forecast additional production opportunities, will allow over 20 years of production.

Resources are expected to double as exploration continues, especially on the western portion of the acreage, after Tullow discoveries on Orinduik.

Production Schedule

Growth Schedule

In Dark Blue is the Liza Phase 1 drilling. Resources attributable to Exxon Mobil with Hess and CNOOC should be 100 thousand barrels per day. This production and rewards will provide close to ~$1 billion in annual profits to ExxonMobil. Production will be online soon and continue for the long term.

Reaching a final investment decision on Liza Phase 2, the company plans to use its Phase 1 learnings and start this up in 2022 . It should grow Exxon Mobil’s share to 200 thousand barrels per day, or $2 billion in annual profits.

The company is investigating other expansions including Payara, which is progressing through early engineering. The project should add 100 thousand barrels per day to ExxonMobil’s share and will add another $1 billion in annual profits for ExxonMobil.

Future projects are being defined . ExxonMobil went from 10 drilled and 15 undrilled projects in 2017 to 15 drilled and 40 undrilled in 2019. The company has more undrilled prospects than the total number it had in 2017. The company is looking at Projects 4 & 5, with a 2025 start up, that could add 100 thousand barrels to the company’s production.

Sulfur Risk
The potential of sulfur oil is real after Tullow Oil announced that it was reassessing the viability of its Guyana oil production given high levels of sulfur in the oil. The discovery had a massive negative impact on the stocks of Tullow Oil and Hess as investors overreacted. Tullow reported API of ~45 and a sulfur content of 2% from its wells. Exxonmobil reported that the Guyana oil it found has ~0.5% sulfur and an API of 30-35. That is quality crude oil.

Hammerhead weighs in heavy
Chief executive Hess says oil is heavier at shallower find off Guyana, but remains convinced of standalone development potential.
What might be unprofitable for Tullow Oil could be very profitable for Exxon Mobil, solely because of the difference in scale of the company’s operations.
Guyana remains the Queen of the Exxon Mobil portfolio. With the various expansion projects, which are likely an understatement given how much the project has grown in recent years, it could increase the company’s production by double digits and its profits by even more. The company continues to explore in this region and reserves and production forecasts will rise.
The region is a profitable long-term cash cow despite geopolitical risks but sulfur risks are overblown. Investing will be a strong long-term reward opportunity. Exxonmobil has exciting growth potential in Guyana, where its estimated reserves rose since early 2018, from 3.2 to over 6.0 barrels now. While other companies drilled about 40 dry holes in Guyana, Exxon boasts of an 87% exploration success rate thanks to its superior expertise.

Overall, thanks to its exciting growth prospects and its depressed stock price, Exxon can offer a double-digit annual return in the upcoming years, assisted by its 5.1% dividend, considered safe thanks to the growth prospects and the rock-solid balance sheet. ExxonMobil has an excellent long-term track record of steady dividend increases for 37 years in a row.

1700 Guyanese work for Exxon in jobs ranging from engineers to labourers –
Exxon’s Senior Director of Public and Government Affairs, Diedre Moe
Having found over a dozen oil wells since 2015, ExxonMobil provides direct employment for locals. The company contended that it employed thousands of locals during decades in Guyana. Exxon currently has over 3400 persons working on its local operations. This includes the Stabroek Block, where the company has a Floating Production, Storage and Offloading (FPSO) vessel and other infrastructure .

“We have over 3400 people working on the projects in Guyana. More than 1700 or 50 per cent are actually Guyanese. Anything from .. catering .. to roustabouts on board, safety and health officers and we also have significant work at shore base, activities like loading pipes. And then, of course, we have persons working for us directly, everything like accountants to communication professionals to engineers.”

“We had three specifically that were hired a couple years ago. And they spent 18 months in the US at our expense. And they got a chance to be trained in how different types of oil and gas operations work. And they have since come back. They are actually going to be responsible for different issues regarding the Liza Phase One project. The jobs we have for Guyanese run the gamut of opportunities.”

Exxon has worked with over 600 local vendors and suppliers on a sub-contractual basis, since they first began their operations in 1999. Exxon has expended over G$36 billion on supplies from local vendors.

Local content has been a burning question since the announcement of oil in the Stabroek Block. After Exxon first tempered expectations by saying that few job opportunities will be created by oil, it has since said that it will help with local content delivery. One measure it has taken is to open a Centre for Local Business Development (CLBD). A prevailing complaint was that Guyanese are losing out to foreigners , especially as the Local Content Policy is still not in effect.

A third draft of the local content plan was subjected to discussions among stakeholders. The lack of penalties was a prevalent concern by those who reviewed the document. In fact, the policy itself said that there were limits to its scope.

The Georgetown Chamber of Commerce and Industry (GCCI), identified weaknesses within the policy and published an analysis, noting that with no penalties to hold operators accountable to their commitments and international principles of providing employment and business opportunities for Guyanese, “handshakes” and good faith are not enough.

Hess – First oil in bountiful Guyana scheduled for December

Hess Corp’s first oil in Guyana, where it is a partner in the crude-rich ExxonMobil-led Stabroek offshore block, will be in December, ahead of the previously stated Q1 2020 date.

Moreover, the partners have also selected two more exploration wells to drill in Guyana, following their 14th successful well there, Tripletail, Hess COO Greg Hill said during a third-quarter earnings call.

Hill said after Tripletail, they will next drill the Uaru-1 prospect, and a fourth drillship expected to arrive in November to drill the Mako-1 exploration well.

Uaru-1 will be roughly 10 miles east of Liza-1, the initial Guyana discovery well announced in May 2015. Mako-1 is around 6 miles south of Liza-1.

The Liza field, set to come on stream in December, is being readied as the first of an initial five separate Guyana oil developments the partners, which includes China’s CNOOC, have projected to produce oil by the middle of the next decade. Combined, the projects are forecasted to produce upwards of 750,000 b/d of oil by 2025.

The Tripletail find, which encountered about 108 feet of high-quality oil-bearing sand stone reservoir, added to the partners’ estimate of gross recoverable resources of more than 6 billion barrels of oil equivalent on Stabroek.

The Liza Destiny floating production, storage and offloading (FPSO) vessel, which will produce the Liza Phase 1 development, arrived in Guyana in late August. The facility has a gross production capacity of 120,000 b/d of oil.

“Drilling of Liza Phase 1 development wells … is proceeding according to plan, and subsea installation is nearly complete,” Hill said.

Liza Phase 2 was sanctioned in May and will be produced using the Liza Unity FPSO, with a gross production capacity of 220,000 b/d. It will develop around 600 million barrels of oil.

The Liza Unity hull is nearing completion and should sail for Singapore by year-end, where topside modules will be installed and the vessel commissioned. First oil for Phase 2 is targeted by mid-2022.

A third development sited around the Payara field, a 2017 find, is also planned, pending government approval. Its FPSO will also have 220,000 b/d of gross production capacity, with first oil envisioned in 2023.

ExxonMobil aims to probe new depths
US supermajor to add fifth drillship to target new ultra-deep prospects

27 November 2019 18:53
by Gareth Chetwynd in Georgetown

ExxonMobil is preparing to start wildcatting off Guyana again next year targeting a new ultra-deepwater frontier on two blocks to the north of its prolific Stabroek acreage.

ExxonMobil taps SBM Offshore for third FPSO
AMSTERDAM – ExxonMobil subsidiary Esso Exploration and Production Guyana Limited (EEPGL) awarded SBM Offshore contracts to perform Front End Engineering and Design (FEED) for an FPSO for the Payara development project in the Stabroek bloc where .
EEPGL is the operator with partners Hess . and CNOOC. Prior to necessary government approvals and project sanction, the contract award will initiate a limited release of funds to begin FEED activities and secure a Fast4Ward hul, a standard design with the flexibility to be utilized for projects across the deepwater market.
Following FEED and subject to government approvals in Guyana, project sanction and an authorization to proceed with the next phase, SBM Offshore will construct, install and then lease and operate the FPSO for a period of up to 2 years, after which the FPSO ownership and operation will transfer to EEPGL.
The FPSO, to be named Prosperity, will utilize a design that largely replicates the design of the Liza Unity FPSO. As such, the design is based on SBM Offshore’s industry leading Fast4Ward program that incorporates the company’s new build, multi-purpose hull combined with several standardized topsides modules. The FPSO will be designed to produce 220,000 boepd, will have associated gas treatment capacity of 400 MMcfd and water injection capacity of 250,000 bpd. The FPSO will be spread moored in water depth of about 1,900 meters and will be able to store around 2 MMbbl of crude oil.
SBM Offshore is exploring options to maximize local content and Guyanese workforce development, building on efforts to date on the Liza Destiny and Liza Unity FPSOs.

CEO Bruno Chabas commented: “We are pleased to report that ExxonMobil has selected SBM Offshore to award contracts for a third FPSO in Guyana, starting with the front-end engineering, to continue the world-class deep water development in Guyana. The successful team work with our client ExxonMobil on the Liza Destiny and Liza Unity FPSOs provided a solid foundation for this award. This project will be adding further traction to SBM Offshore’s Fast4Ward® program as its design is incorporating our multi-purpose hull and a number of standardized modules. We look forward to continuing to build on our close collaboration with ExxonMobil in order to also make this project a success.”

Source: SBM Offshore

Tullow partners assess implications of heavy oil analysis
Analysis of oil samples from Jethro and Joe discovery wells offshore suggests that both fields contain heavy crudes with a high sulfur content.

(Map courtesy Eco (Atlantic) Oil & Gas)

LONDON and TORONTO – Analysis of oil samples from the recent Jethro and Joe discovery wells suggests that both fields contain heavy crudes with a high sulfur content.

Operator Tullow Oil and its partners are assessing the commercial viability, taking into account the quality of the oil and the reservoir sands and strong overpressure.

The wells on the Orinduik license proved two different oil plays in Cretaceous and Tertiary intervals. Tullow retained confidence in the potential of multiple prospects identified in these plays throughout the license and in the non-operated offshore Kanuku blocks.

Both structures were drilled on the far north of the company’s acreage. Tullow continues to update its petroleum system models in pursuit of further prospects and lighter oil in the area.

These, and the result from the Repsol-operated Carapa well on Kanuku, will help shape the planned 2020 drilling campaign.

Orinduik partner Eco (Atlantic) Oil & Gas said the samples from Jethro-1 and Joe-1 indicate mobile heavy crudes, similar to the commercial heavy crudes found in the North Sea, Gulf of Mexico, the Campos basin offshore Brazil, Venezuela and Angola.

The partners have brought in a heavy oil development consultant to answer their technical queries and to assess various potential development drilling and production scenarios.

Jethro-1’s 8,500-psi (586-bar) reservoir (2,600-psi/179-bar overpressure) has the advantage of natural drive efficiency, Eco said. The high reservoir temperature of 94°C (201°F) and an estimated flowing well head temperature of 90°C (194°F) are both positive in terms of oil mobility and should provide an advantage at the floating production facility.

Colin Kinley, Eco’s COO, said: “The fact that the oil is already hot in the reservoir, and mobile, and has high quality porous sand to travel through, helps to eliminate a great part of the conventional heavy oil challenge.

“Having 8,500 psi in the porous warm formation is an added advantage to drive the oil to the well. Horizontal well technology can allow excellent access to these thick fields and generally reduces the need for multiple additional wells, leading to lower development cost per barrel.”

Tullow Oil Plc fell the most in two decades in London trading after saying it is reassessing the commercial viability of discoveries in Guyana.

The stock sank as much as 23% on news that crude from two wells was heavy, with a high sulfur content. That is disappointing to shareholders as the discoveries earlier this year had countered concerns over troubled ventures elsewhere.

“We expect investors to worry about the projects’ value,” RBC Europe Ltd. said . Heavier oil is harder to produce and requires more energy to extract and transport.

Tullow struck oil twice off Guyana this year in a closely watched drilling campaign following earlier finds in the area by ExxonMobil. Tullow’s success there offset concerns over its operations in Africa, where technical difficulties hampered output in Ghana and projects in Uganda and Kenya faced delays.

“The commerciality of both discoveries is still being assessed and our options are being reviewed,” Tullow spokesman George Cazenove said . “The quality of the reservoir and the significant over-pressure are positive, and while oil of this type is sold in global markets, we need to do more work on the various parameters.”

Tullow also reduced its 2019 oil-output forecast citing the problems in Ghana. It now expects to pump an average of about 87,000 barrels a day this year, down from previous guidance of as much as 93,000 a day.

The stock traded down 22% at 161 pence, making it the worst performer on the Stoxx Europe 600 Oil & Gas index. Eco Atlantic Oil & Gas Ltd., a partner in one of the Guyanese blocks, tumbled 50%.

“Tullow remains confident of the potential across the multiple prospects” in the country’s Orinduik and Kanuku blocks, the London-based company said . Results from the next well in the drilling campaign — Carapa — are expected by the end of the year.

The company forecast full-year capital spending at about $540 million, free cash flow at about $350 million and net debt at around $2.8 billion.

Tullow’s last chance saloon
Discouraging crude appraisal ramps up pressure on year-ending drill prospect
The final drilling target of the year for Anglo-Irish independent Tullow has become more pivotal following the company’s revelation that crude from its offshore Guyana discoveries is heavier and more sulphurous than expected. Tullow’s share price had been elevated in recent months. Hopes were high that the company’s twin offshore Guyana discoveries might replicate the crude quality of ExxonMobil’s neighbouring Stabroek block. But laboratory analysis of crude taken from the Jethro and Joe discoveries, in the Orinduik block, revealed crude of around 10-15° API gravity and c.5pc sulphur—in contrast to the lighter 32.1° API gravity and 0.5pc sulphur content of ExxonMobil’s Liza discovery.

Eco (Atlantic) unaudited results and update

Eco (Atlantic) Oil & Gas, the oil and gas exploration company with licences in Guyana and Namibia, announced results for the three and six months ended 30 September 2019, alongside a corporate and operational update.

Results Highlights:

Financials

As at 30 September 2019, the Company had cash and cash equivalents of CAD $30.7 million. The Company remains well funded and currently has CAD $27.9 million of cash and cash equivalents on the balance sheet.
During the first quarter of the financial year, Eco completed its previously announced private placement raising gross proceeds of CAD $22.6 million.
As at 30 September 2019, Eco had total assets of CAD $32.3 million, total liabilities of CAD $2.5 million and total equity of CAD $29.8 million.
Operations – Guyana

On 12 August 2019, the Company announced a major oil discovery on its Orinduik offshore petroleum license in Guyana. Evaluation of logging data confirms that Jethro-1 is the first discovery on the Guyana License and comprises high-quality oil-bearing sandstone reservoir of Lower Tertiary age. The well was cased and is awaiting further evaluation to determine the appropriate appraisal activity.
On 16 September 2019, the Company announced a second oil discovery on the Guyana License. Evaluation of MWD, wireline logging and sampling of the oil confirms that Joe-1 is the second discovery on the Orinduik license and comprises high quality oil-bearing sandstone reservoir with a high porosity of Upper Tertiary age.
Both wells were drilled within budget, with MWD logging tool and conventional wireline, and the reservoirs were considered to be high quality sands with good permeability.
Fluid samples were taken in both of the wells and were sent for analysis by the Operator. The complete fluid analysis and report for both wells have not yet been received. However, initial results suggest that the samples recovered to date from Jethro-1 and Joe-1 are mobile heavy crudes with high sulphur content.
Oil tested to date appears not dissimilar to the commercial heavy crudes currently in production in the North Sea, Gulf of Mexico, the Campos Basin in Brazil, Venezuela and Angola.
The Joint Venture partners on the block have engaged a third party consultant with heavy oil development expertise to help conduct preliminary evaluations related to production and commercialisation. Evaluation work is ongoing and the partners are considering alternatives for further drilling and testing and a number of development drilling and production alternatives are now to be considered. The Company remains optimistic in considering the development scenarios and as the project progresses will define further information on plans and timing.
The CPR published on 18 March 2019 suggested the block potentially contains in excess of 3.9 billion Gross Prospective Oil Equivalent Resources (P50 Best) on approx. 15 identified prospects. Approx. 900 million barrels of oil in Tertiary Reservoirs and approx. 3 billion barrels of oil in Cretaceous prospects, remain to be explored. The Company is currently preparing an updated CPR, which is expected to be published after the Kanuku block Carapa well results, potentially in January 2020.

Outlook

Guyana
Multiple prospects currently being reviewed with high graded candidates under consideration for a 2020 drilling programme.
Operator is preparing a budget for long lead items including wellheads and casing.
Once the final well fluid reports and related testing data for the two discoveries as well as results from other regional exploration activities, including drilling of the neighbouring Carapa well have been analysed and evaluated, an updated CPR will be published
A further update will be made on the JV Partner’s drilling plans for next year in January 2020.
Namibia
Eco continues to progress its various work programmes offshore Namibia.
The Company plans to monitor near term drilling activity in the region and will update the market on developments as appropriate.
Gil Holzman, President and Chief Executive Officer of Eco Atlantic, commented:

‘We ended the first half of our financial year with a very strong balance sheet. After drilling our first two wells in Guyana we now have CAD $27.9 of cash and cash equivalents. These funds will be used to continue the evaluation of our two Guyana oil discoveries and to drill additional exploration and potentially appraisal wells on the block in 2020.

We recognise the market reaction to our last announcement on the oil quality discovered at Jethro and Joe and we are grateful for the continued support of our shareholders. This continues to be an exciting time for the Company, as the Orinduik block offers many promising prospects and we continue to work with our partners and third party experts to evaluate our first two discoveries and determine the 2020 drilling targets and budget. We expect to announce our drilling plans by the end of January 2020 and we look forward to updating our shareholders on this as appropriate.’

Source: Eco (Atlantic)

ExxonMobil banks on Guyana for 20% of its global crude… offers stock for high interest at rock bottom prices

ExxonMobil stocks during the third quarter for this financial year, have seen its share prices plummet on the world market, to the point where it has begun offering shares at lower rates with higher returns, while banking on Guyana to bring in about 20 percent of its annual crude production in the near future.

According to market reports, the company’s stock is now being offered at a nine-year low, while a dividend yield of 5.2 percent—the highest offer in two decades—is being promised.The company has been unable to substantially increase its production in recent years. Output fell from 4.2 million barrels per day in 2012 to 4.0 million barrels per day in 2014 and has remained on a plateau since.The company is placing considerable importance on its discovery of overn six billion barrels in the Stabroek Block offshore Guyana .While other companies have drilled about 40 dry holes in the area, Exxon boasts an 87 percent exploration success rate.ExxonMobil has almost doubled its estimated reserves in the area since early 2018, from 3.2 to 6.0 billion barrels now.The Oil Giant is now poised to produce at least 750,000 barrels per day in Guyana by 2025, which is almost 20 percent of the current output.The company has thus projected a resumption of positive growth, its total output next year, for the first time in more than a decade.

ExxonMobil is expecting to grow its earnings per share by 135 percent, from $3.59 in 2017 to $8.44 in 2025, assuming an average oil price of $60 in 2025. Earnings growth is expected to be much higher if the oil price exceeds $60 in 2025. The company will be taking the first three lifts of crude oil from Guyana’s Stabroek Block when production commences in the coming weeks from the Liza Destiny, Floating, Production, Storage and Offloading Vessel. Director of Guyana’s Energy Department, Dr. Mark Bynoe, confirmed that ExxonMobil (Guyana) would be uplifting the first entitlement of crude to be produced by the FPSO. The parties are expected to conclude a Crude Lifting Agreement (CLA) , which aims to articulate the terms and conditions under which ExxonMobil and its partners—Hess, CNOOC-NEXEN, and the Government of Guyana will collect each entitlement of crude. The agreement not only sets up the schedule for crude cargo lifts based on volume entitlements, but also lays out the strict procedures for efficient crude lifting.

Guyana earns 1M barrels, pays taxes for oil companies

Guyana will only qualify to uplift its first earned million barrels of oil, after ExxonMobil and partners, HESS Exploration and CNOOC-Nexen collect two turns each or almost eight million barrels of oil.

The country would have only earned 570,000 barrels of crude out of the first four million barrels to be recovered. This includes 80,000 barrels of royalty on the first four million barrels while 490,000 barrels would represent Guyana’s 12.5 percent profit split after the recoverable amount has been taken out.

The country will then have to market this oil, after which it will be paying the taxes due for the companies involved.Department of Energy Director, Dr. Mark Bynoe, sought to clarify just how the country would be receiving its oil dues. ExxonMobil (Esso Exploration and Production Guyana Limited) will be taking the first entitlement of crude to be produced by the Floating Production and Offloading Vessel (FPSO), the Liza Destiny.

The parties would take turns in uplifting their entitlements and while Guyana would not be collecting its share upfront, the records will be reconciled. The Production Sharing Agreement (PSA) that was inked between Guyana and the parties stipulates that the country will be paid a royalty of 2% for every barrel of oil produced and sold.

This means that on the first four million barrels of oil produced (one million each to be collected by each party), Guyana would earn a royalty of 80,000 barrels of oil.The profit to be had from the first four millions will be 490,000 barrels of oil. This means that in order for Guyana to earn its first million barrels of oil, then the remaining partners will have had earned just under seven million barrels of oil.

• • Multilateral funds exceed USD 7 million
  • A diversity of donors supports local programmes.
  • Exxonmobil Stabroek contract allocated USD 3 million for education.
  • All contractors contribute USD 300,000 pa, valued at USD 900,000
  • UN gave USD 1.7 million from international taxes.
  • Halliburton gave USD 2.2 million in November.
  • By Christmas UG and other institutions will be awash with cash from oil.

Three and a half years after Esso Exploration and Production Guyana Limited (EEPGL)—the Contractor for the Stabroek Block—and its partners committed to providing the Ministry of the Presidency (MotP) with US$300,000 each calendar year, for ‘Corporate Social Projects,’ the Department of Energy (DoE), is still to tap into the fund.

Department of Energy Director, Dr. Mark Bynoe, confirmed that no projects have been funded as yet from the money provided by the Contractor for the Environmental and Social Projects.

Two projects in the pipeline are being evaluated for approval shortly, but he declined to provide any details. Government decided that the projects to be funded under the CSR Account would have to be aligned with the administration’s Green State Development Strategy (GSDS).

Under the Production Sharing Agreement (PSA) inked between the Government of Guyana, EEPGL, Hess and CNOOC-Nexen , “the Minister and contractor shall establish a program of financial support for environmental and social projects to be funded by the Contractor.”

Under Article 28 of the PSA which deals with Social Responsibility and Protection of the Environment, “The Contactor shall directly fund” the amount of US $300,000 per calendar year with any funded but unspent portion of the amount being carried over to ensuing years.

Article 28.7 of the PSA stipulates that the Minister and the Contractor shall meet annually to agree which projects shall be funded in a year.
Dr. Bynoe told residents of the Upper Takutu-Upper Essequibo (Region Nine) community that the oil operators provide US$300,000 annually, in fulfillment of their corporate social responsibility, from which funds can be drawn to finance community projects.

“To date, Guyana has about US$900,000 waiting to be spent on community-type projects. All that we have asked is that those projects be aligned with the Government’s development strategy so it is up to us to come up with initiatives… If [there is] a sustainable livelihood project that you want to pursue for your community, you can engage with us; we can provide you with advice, we can provide you with the template and help you to develop a project which can ultimately be funded.”. He urged particularly the youth of the region to draft community development plans for their respective villages, in order to benefit from the opportunities and revenues that will emerge from the petroleum sector.

Dr. Bynoe spoke during an Interactive Session on Oil and Gas, in the St. Ignatius Benab to residents from several villages, including Lethem, Aranaputa Valley, Aishalton, Surama and Nappi, over 150 pupils from St. Ignatius Secondary School with five teachers; 53 students from the Arapaima Primary School with two teachers and 35 students from the St. Ignatius Primary School and a teacher.

He advised putting plans in place because funds will …go into the Natural Resources Fund. A portion then goes to the Consolidated Fund, from which spending will come so representation shows a strategic vision for a village, region and community that will be [considered]..

ExxonMobil already provided more than $550M during 2018 and 2019, including $400M given to Conservation International Guyana, for a program to advance a sustainable economy through education, research, sustainable management and conservation.
Other social contributions from ExxonMobil include a $120M grant to Iwokrama for the Centre’s Science Programme; $31M to Volunteer Youth Corps for Science, Technology, Engineering and Mathematics (STEM) programs; including robotics.
The company provided grants to agencies such as Civil Defence Commission’s Voluntary Emergency Response Team (VERT) training, supporting volunteers across the regions and $5M given to Youth Challenge Guyana (YCG) supporting a programme to enhance the agricultural food production skills.

US$1.7m for low-emission energy technologies

Government, through the Office of Climate Change (OCC), has partnered with the United Nations Development Programme (UNDP) and the Global Environment Facility (GEF) to implement a project titled the “Mainstreaming Low Emissions Technologies to build Guyana’s Green Economy,” through US$1.7 million in financing from the GEF.

The grant was facilitated by the OCC, the Ministry of Public Infrastructure, through the Guyana Power and Light Incorporated (GPL). The Guyana Energy Agency (GEA) and the Hinterland Electrification Company are the main implementation partners.

At the opening of the Project Inception Workshop, Head of the OCC, Janelle Christian said the Low Emissions Project aims to accelerate the uptake of renewable energy and energy efficiency technologies to reduce dependency on imported fossil fuels and support Guyana on its path towards more decentralised, inclusive and resilient development.

The Project is designed to address the barriers in Guyana’s energy sector in order to develop a reliable and efficient low emission energy systems required for building a green state as Guyana forges ahead with its plan.

In its Intended Nationally Determined Contribution to the Paris Agreement in 2015, Guyana committed to eliminating its dependence on fossil fuels for power generation by developing an energy mix consisting of wind, solar, biomass and hydropower to supply both the demand of the national grids and the energy requirements for towns and villages in the hinterland.

However, for this vision to be realised, there are several enabling conditions which must be put in place including the right legislative, policy and institutional framework complemented by technological and human capacity support. Through collaboration with the Ministry of Public Infrastructure and its sub-agencies, the OCC and the UNDP, Guyana was successful in its proposal to the GEF.

Under the recently-crafted development agenda, “Green State Development Strategy: Vision 2040”, Guyana has further articulated its renewable energy ambitions, in accordance with its international commitments.

“Having made this commitment, it was necessary to identify a roadmap to get there. We knew that there were some barriers that had to be addressed, since a shift had to be made from pilot type initiatives to investment projects of scale. The OCC partnered with the UNDP to access the GEF funds under the allocation for climate change, which is in keeping with [the] Office’s made to unlock support, whether through the mobilisation of finance, technology transfer or capacity building, in the furtherance of our national climate change ambitions,” stated a Ministry of the Presidency news release. The Inception Workshop is expected to trigger the actual implementation of actions on the ground by the relevant agencies.

The project will look at three areas of support: policy framework and institutional capacities, sustainable business and financing models for low-carbon energy technologies, and deployment of low-emission energy technologies. These areas entail working with key institutions such as the National Procurement and Tender Administration Board to advance ‘green’ procurement policy directive, the Guyana National Bureau of Standards to establish Minimum Energy Performance Standards, and the Ministry of Education (Council for Technical Vocational and Education Training, Board of Industrial Training) and the technical institutes for training and certification in PV installation, repairs and maintenance as areas of priority.

Mr. Navindra Persaud, Representative of the UNDP Guyana,, noted that the UNDP said he remains committed to working with member states to achieve the United Nations Sustainable Development Goals and the 2030 agenda.

“In our strategic plan, we have particularly prioritised the reduction of poverty in all its forms and build countries to address developmental and interconnected challenges. One of these outputs speaks to the transition to more sustainable solutions for increased energy efficiency and access from renewable sources. This helps us to tackle climate change while promoting cheaper and more stable energy options,” Persaud was quoted by the Ministry of the Presidency as saying.

Through the project, it is expected that 7000 megawatt hour of electricity will be produced annually from renewable energy sources; 10,000 individuals will benefit from installed solar photovoltaic systems; US$850,000 will be saved by the country, annually, on public expenditure and greenhouse gas emissions will be reduced by 271,000 CO2e over 10 years.

Oceaneering opens office

By Stabroek News December 3, 2019

To provide support to oil and gas operators here, Houston, Texas-headquartered subsea engineering and applied technology firm Oceaneering has established an office in Guyana.

The company, which expects that its Georgetown office will be operational by the end of the next two months, already has employed 18 locals and has dispatched them to various regions across the world for training.

Oceaneering, which was established 50 years ago in Morgan City, Louisiana, USA, has regional offices in multiple states in the USA and in the United Kingdom, Norway, the United Arab Emirates, Australia, India, Malaysia and Angola.

Andre Peretto, Country Manager for Guyana, told this newspaper that the company is contracted by ExxonMobil and currently works on three of the four drill rigs in the offshore Stabroek Block.

“Currently here in Guyana we are working on three of the four drill rigs that are currently in country, providing ROV (remotely operated vehicle) services, survey services…and IWOCS (Intervention Workover Control Systems). To date, we have hired several Guyanese nationals and we are training them at our facility in Morgan City to become ROV pilots offshore. Eventually, we will increase that into survey engineers and from there we expand even further, once we have our office here in the next week or two,” Peretto said.

“We will hopefully get more involved with the future production, maintain our drilling footprint here, but then move from drilling into installations for umbilicals in field, doing the connection points subsea to produce oil back to the FPSOs…and then we also offer other services,” he added.

While the company is hoping to offer other services in the future, it will focus on only certain areas. “We think our footprint here in Guyana will grow greatly in the coming years but right now we are just geared to the drilling side of the business,” he said.

The company’s General Manager is former Ramps Logistics Director Natasha Jairam-Abai, who said the company anticipates that “within the next month or two, everything should be set up for the office.”

“We have a total of 17 person plus myself, so that makes us 18 in total,” she said, while Peretto added “Our contract is with Exxon but hopefully we will be working for Tullow, Hess… in the future and any major operator that comes into Guyana, we would hope that we are working for as well.”

And as it plans for the future, the company has employed more persons that it currently needs but Peretto said that it doesn’t mind as those persons will be trained and sent to get on the job exposure at its offices across the world.

“We have more Guyanese employees than we actually could use we so are actually using them to work in other regions of the world. We are not just putting in the work here… We are giving them training so they can work anywhere in the world and not just here, which I think is great for them,” he said.