Uaru-Mako Field Project

January 15, 2023

Acorn International  released the Environmental Impact Assessment (EIA) of the fifth Exxonmobil project at the Uaru-Mako field, expected to be the largest yet in Guyana with a proposed development cost of US$12.7 billion (GY$2.6 trillion),

The Uaru-Mako field is estimated to hold over 1.3 billion barrels of oil and could produce as much as 263,000 barrels per day.

The EIA process is modelled after similar regulations in the United States and other countries. It requires impact assessments for projects that explore any theoretically possible environmental impacts, explores how impacts can be mitigated and offers public-engagement opportunities for citizens to have an input in decisions over the future of the petroleum industry.

EIAs in Guyana follow international best practices and allow for a transparent analysis of the environmental consequences in decision-making. The critical stages of an EIA include screening to decide whether a proposed project should be subject to EIA, scoping to identify important impacts and issues that need to be addressed for the study, the actual EIA study and preparation of the report and finally the presentation of findings to the public.

The EIA also contains critical environmental data that can minds at ease. Despite public concerns about fisheries, the expert analysis found that impacts were likely to be limited to areas within 100 metres of offshore production vessels—a vanishingly small part of the 26,800-square kilometre Stabroek Block.

The Uaru-Mako project, is now expected to exceed the estimated cost of US$10 billion, due to inflationary pressures from the invasion of Ukraine and the COVID-19 pandemic.

John Rielly, Chief Financial Officer at Hess Corporation, revealed during their third quarter earnings call, that the development will break even, despite inflationary pressures.

“The Uaru project is going to have industry-leading returns and a low cost of supply; the cost of the Uaru project, will be higher, reflecting the current market conditions as well as additional scope to reduce greenhouse gas emissions.”

While front-end engineering and design (FEED) work for the Uaru-Mako project is underway and first oil is targeted for the end of 2026, more remains to be done before the ExxonMobil Guyana consortium reach final investment decision (FID), due to ongoing evaluations of the new cost considerations during the development process.

The ExxonMobil consortium will continue to provide the capital to develop the offshore resources. Guyana will not be expected to cover unexpected cost increases. These cost pressures on the project are not unique to Guyana and affect energy projects across the globe.

Guyana continues to be in a unique position as the Guyana-Suriname Basin has one of the most competitive break-even points in the world, according to Rystad Energy. Although costs to develop are rising, Guyana will still see significant wealth due to its 50 per cent share of all profits and already has over US$1.4 billion in its Natural Resource Fund.

The Uaru-Mako development project would be a sizeable investment in 38-63 development wells, installation and operation of subsea umbilicals, risers, and flowlines (SURF) equipment; installation and operation of a floating production, storage, and offloading (FPSO) vessel; and eventually, project decommissioning.

Not only is critical infrastructure being installed but this project will deliver an oil- production rate of 250,000 barrels of oil per day (bpd) and upper oil-production limit of around 263,000 bpd. That would significantly enhance Guyana’s revenues and continue its rise into the upper ranks of oil producers.

The Acorn International EIA study indicated that the project will be producing 540 million standard cubic feet of gas per day, which could help power the electric grid and create new industries. The project will also require up to 540 new employees to drill and complete the development wells.

The fifth and largest project to date is yet another sign that Guyana remains on the right path to develop its resources, while protecting the environment.

 

 

 

ExxonMobil pegs offshore Uaru development at $12.7 billion

Fifth project will include the Mako and Snoek discoveries

10 January 2023

Fabio Palmigiani in Rio de Janeiro

US supermajor ExxonMobil estimates the development of the Uaru field in the prolific Stabroek block offshore to cost approximately $12.7 billion, reflecting the impact of inflationary pressures on oil and gas projects internationally.

Uaru is the company’s fifth deep-water development in Stabroek, with first oil earmarked for late 2026. The field’s ring-fence also encompasses the Mako and Snoek finds.

The Uaru floating production, storage and offloading vessel will be supplied by Japanese player Modec and will feature topsides modules able to process 250,000 barrels per day of oil and 540 million cubic feet per day of natural gas.

 

 

Modec selecting yard for Guyana FPSO work

DSIC has performed FEED work for Uaru FPSO and is homing in on key contract for hull and living quarters

28 December
Xu Yihe in Houston

Japanese floater specialist Modec has pinned down a Chinese yard Dalian Shipbuilding Industry Company to provide the hull and living quarters for the newbuild floating production, storage and offloading vessel that will serve ExxonMobil’s Uaru field on its prolific Stabroek block offshore .

Though a contract is yet to be awarded, Asian contracting sources said Modec is in advanced talks with DSIC for a commercial deal covering engineering, procurement and construction for the hull, using the M350 standardised hull design that the pair developed together.

 

 

Fourth notification of revenues paid to NRF

January 6, 2023

Senior Finance Minister Dr Ashni Singh today submitted Notification of Receipts to Parliament of all petroleum revenues paid into the Natural Resource Fund (NRF) during the period 1st October 2022 to 31st December 2022, pursuant to Section 33 (2) of the NRF Act 2021.

This notification was published in the Official Gazette on the 5th January 2023 and demonstrates the People Progressive Party/Civic (PPP/C) Government’s continued commitment to the principles of transparency and accountability in the management of Guyana’s oil resources. At the end of 2022, the balance in the NRF stood at US$1.27 billion.

The NRF Act 2021 came into operation on January 1, 2022, replacing the illegitimate NRF Act 2019 passed by the APNU/AFC caretaker administration. The NRF Act 2021 allows for substantial improvement in the management of the natural resource wealth of Guyana including the establishment of a Board of Directors which is responsible for reviewing and approving the policies of the Fund and monitoring its performance, thereby separating the management of the Fund from the Minister responsible for Finance.

Another key amendment in the new legislation is that the Minister of Finance could face up to ten years imprisonment if he fails to disclose the receipt of any petroleum revenue received by Government in the Official Gazette within three months of receipt of such monies.

The International Monetary Fund (IMF), in its 2022 Article IV mission to Guyana in May-June of 2022, commended the PPP/C Government on the amendments made to the NRF Act and highlighted:

“The NRF Act was strengthened recently. After a thorough review, and while restraining the spending of the oil receipts, the authorities amended the NRF Act December 2021. The recent amendments set clear ceilings on withdrawals from the Fund for budgetary spending,’

The PPP/C Government intends to continue to manage Guyana’s oil resources in a clear and transparent manner, to the benefit of present and future generations.

 

 

 

US$82.6m banked for first oil lift this year

January 5, 2023

With oil prices averaging US$79 per barrel in December, Guyana earned US$83 per barrel on its last lift for 2022 and received its first one million barrels oil-lift payment for this year, at US$82.06 per barrel.

The US$82.6 million payment received takes the Natural Resource Fund total to US$1.346 billion.

Monies in the NRF are likely to grow rapidly throughout this year as there are now two floating production storage and offloading (FPSOs) units operating in the offshore Stabroek Block; the Liza Destiny producing over 120,000 barrels of oil equivalent (BOE) per day and the Liza Unity at 220,000 BOE per day.

 

 

World Bank- Guyana to sustain double-digit growth

IDB – Non-oil sectors perform better than expected

January 11, 2023

According to the World Bank in its latest publication, Global Economic Prospects, Guyana is on course to recording growth of 25 per cent this year and 21 per cent next year.

“Aside from Guyana, which remains in a natural resources-fueled growth boom, the sub-region faces renewed headwinds,” the World Bank said.

Progress in this year will continue from the successes recorded last year, when the country’s economy grew by well over 50 per cent. Guyana’s prospects remain bright even as growth in Latin America and the Caribbean is projected to slow from an estimated 3.6 per cent in 2022 to 1.3 per cent in 2023, before recovering somewhat to 2.4 per cent in 2024.

“The forecast for 2023 has been downgraded since June by 0.6 percentage point. The sharp deceleration of growth this year reflects efforts by the region’s monetary authorities to tame inflation, and spillovers from weakening global growth. Per capita GDP growth is expected to be just 0.6 per cent in 2023.

A sluggish growth outlook in the United States and China will curtail export demand in 2023, while the increase in U.S. interest rates is likely to also keep global financial conditions restrictive.

The boon for South American incomes from recently elevated commodity prices is expected to unwind over the next two years, except in a small number of fossil fuel exporters. Meanwhile, weakening global growth is expected to reduce export growth in LAC from 5.9 per cent in 2022 to 3.6 per cent in 2023.”

The international financial institution reported that domestic sources of growth appear similarly lacking. Investment is the primary driver of forecast downgrades, with negative region-wide investment growth projected in 2023 in the context of softening business confidence and increased financing costs.

“Elevated levels of domestic policy uncertainty in most of the region’s largest economies present a further headwind to investment, especially in key export industries such as mining.

“The recovery in services following the lifting of pandemic-related restrictions has also largely run its course. With prices rising faster than wages in much of the region, lower real incomes are expected to constrain consumption growth,” the financial institution said.

On a more positive side, the cycle of policy rate increases is likely coming to an end across inflation targeting economies, with solidly positive interest rates in real terms that is, adjusted for anticipated future inflation.

“Policy rates in the largest economies are expected to remain fairly stable this year, meaning inflation adjusted policy rates will increase in some economies if inflation recedes as projected.”

The Inter-American Development Bank (IDB) recently commended Guyana for providing targeted assistance to lower-income groups, including the elderly, an important approach in microeconomic and social policies, which contributed to Guyana experiencing an inflation rate lower than that recorded globally.

The IDB, in its “Headwinds” report, highlighted measures taken by Guyana and the other Caribbean governments to stem inflation and assist their economies to grow, despite external shocks and higher commodity prices on the world market.

“One important approach is to provide additional, targeted assistance to lower-income groups, including the elderly. For example, in Guyana, the government’s public assistance payments for vulnerable groups were increased from US$57 to US$67 per month, benefitting approximately 18,000 people. The Old Age Pension Programme, which benefits approximately 65,000 senior citizens, also provided a series of increases that raised the monthly payment from US$98 in 2020 to US$134 in 2022.”

At the micro level, to support productive sectors and vulnerable populations, the government introduced several policies.

“The excise tax on petroleum was reduced from 20 to 10 per cent in January, then reduced further to zero in March. Tariffs on public utility services such as water and electricity have remained fixed, with the government absorbing higher operating costs. In addition, US$4.8 million was allocated for the purchase and distribution of fertiliser for farmers to reduce operating costs, and US$3.8 million was distributed in the form of one-time cash grants for households in the rural interior and riverain communities (US$120 per household).”

According to the report, rising inflation was “imported” from commodity-price inflation that was due to external shocks, war in Ukraine, higher oil prices which resulted in higher fuel prices, disrupted supply chains and the COVID-19 recovery period.

 

 

Sharp decline in exports- IDB

Jan 09, 2023

Inter-American Development Bank reported exports fell from 68.1% in 2021 to 16.8 last year.

The value of goods exports from Latin America and the Caribbean increased at an estimated rate of 18.8% in 2022, which represented a sharp decline. The downward trend in the region’s external sales consolidated during this period, after growing 27.8% in 2021, according to a report by the IDB.

The region’s export performance was mainly explained by higher prices, while volumes lost momentum. In the coming months, the export growth rate is expected to slow in response to the downward trend in commodity prices, the war in Ukraine, restrictive monetary policies to reduce inflation and the slowdown in global growth, the latest edition of Trade Trends Estimates: Latin America and the Caribbean has found.

“After a rapid recovery in 2021, a series of global shocks have sent exports from Latin America and the Caribbean into a slowdown that will continue into 2023. Reversing this trend will be key to shoring up economic growth in the region,” said Paolo Giordano, Principal Economist at the IDB’s Integration and Trade Sector, who coordinated the publication.

The region’s external sales were driven by shipments to the United States, which are estimated to have grown by 21.3% in 2022. Demand from the rest of Latin America and the Caribbean’s major trading partners slowed dramatically compared to 2021. Sales grew by 2% to China, 14% to the European Union, and 25.6% to Latin America and the Caribbean.

Export Prices

In 2022, the prices of most commodities exported by Latin America and the Caribbean climbed. Between January and November 2022, the year-on-year prices of oil (43%), coffee (29.1%), soybeans (13%) and sugar (5.5%) all increased. In contrast, the prices of iron ore and copper fell by 28.9% and 4.9% year-on-year, respectively.

According to the report, the shock caused by the Russian invasion of Ukraine “further increased the prices of LAC’s main export commodities.”

However, “in most countries, the uptrend changed direction in the middle of the year in response to slowing global demand, forecasts of low growth, and the appreciation of the US dollar.”

Exports are estimated to have grown by 18.2% in South America in 2022 after increasing by 36% in 2021. The upturn in commodity prices explained much of this performance, which benefited from the dynamism of intraregional trade and was particularly hard hit by the cooling of demand from China.

Exports from Mesoamerica increased by an estimated 18.8% year-on-year in 2022 after growing by 19.4% in 2021. Unlike the rest of the region, Mexico experienced a continuous increase in its export growth rate throughout the year due to the rise in volumes shipped to the United States. Although exports from Central America slowed significantly in 2022 in comparison with 2021 (26.6%), they nonetheless grew by 13.6%, boosted by demand from within the region and the United States.

Exports from the Caribbean rose by an estimated 38% in 2022 after growing by 44.4% in 2021. The United States accounted for most of the increase, followed by the European Union. Latin America and the Caribbean’s total imports increased at an estimated rate of 26.3% in 2022, after growing by 37.4% in 2021. The report was prepared by the IDB’s Integration and Trade Sector and its Institute for the Integration of Latin America and the Caribbean (INTAL).

 

 

 

Hess offers US$75M first payment for Guyana-issued carbon credits

January 11, 2023

The Government of Guyana announced receipt of its first payment for carbon credits valued at US$75 million under the agreement with Hess Corporation. It is the first payment in an agreement that will be worth a minimum of US$750 million up to 2030.

Two further payments of US$37.5 million each will be made during 2023 – one in January and one in July – bringing the total amount available for appropriation in this year’s National Budget to US$150 million.

 

Hess – Latest oil discovery may require seventh platform

Jan. 05, 2023.   Carl Surran, SA News Editor

Hess CEO John Hess said the Fangtooth oil discovery offshore may be big enough to require a platform for itself, which would be the seventh in the country, He told the Goldman Sachs Global Energy and Clean Technology Conference that Hess is part of the Exxon-led (XOM) consortium that confirmed plans for six floating production vessels offshore Guyana, which will lead to output of 1.2M boe/day by 2027.

• Guyana currently has two operating platforms producing more than 360K bbl/day, and a third production vessel is 93% complete and should start pumping oil at the end of this year.
• Hess’ operations in Guyana and the Bakken shale basin in the U.S. will comprise 80% of the $3.7B capex the company plans this year.
• Oil production from Guyana likely will triple by 2027, Hess said in a recent investor presentation.

 

 

Hess signals 7th oil platform to lift output above 1.2 MMboe/d

Jan. 6, 2023

Courtesy Exxon Mobil,      Reuters HOUSTON

 

The Exxon Mobil-led consortium group has confirmed so far plans for six floating production vessels in the country, home to the world’s largest offshore discovery in more than a decade.

Hess Corp. said drilling results expected this month could add a seventh platform in Guyana, which would lift the nascent oil petrostate’s output above the 1.2 MMboe/d planned.
The US oil producer is part of the Exxon Mobil Corp.-led consortium that controls all production in the South American nation. The group has confirmed so far plans for six floating production vessels in the country, home to the world’s largest offshore discovery in more than a decade.

The 2022 Fangtooth offshore oil discovery is big enough to potentially require a platform for itself, which would be Guyana’s seventh, Hess Corp. CEO John Hess told a conference by Goldman Sachs.

Results of appraisal wells at Fangtooth, located 11 miles (18 km) northwest of the first producing field in Guyana, may be disclosed later this month.

Hess uses more aggressive output projections than its operating partner Exxon for the six platforms both companies confirm: 1.2 MMboe/d by 2027. Exxon estimates 850,000 boe/d in its presentations.

Guyana has two operating platforms producing over 360,000 bbl/d of oil. A third Exxon production vessel is planned to start pumping oil at the end of this year. Its construction in Asia is 93% complete, Hess said.

While six platforms have been confirmed for Guyana, the partners have sanctioned investments for only four so far. A final investment decision for the fifth platform, for the Uaru discovery, is expected for this year.

Exxon, Hess and PRC partner CNOOC estimated 11 Bbbl of recoverable oil in Guyana, a number Hess deemed conservative.

“There are multibillion barrels remaining,” Hess said on Goldman Sachs’ estimate of 20 Bbbl of reserves.

 

 

5th project to cost Guyana US$12.6B

Jan 10, 2023

Could produce 300,000 barrels of oil per day following 2027 start-up

ExxonMobil Corporation’s fifth project at the Uaru-Mako field which holds over 1.3 billion barrels of oil in the Stabroek Block is expected to cost Guyana over GY$2.6 Trillion (US$12B). Project details for the latest venture by Exxon’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL) are currently under review by the Environmental Protection Agency (EPA).

The Environmental Impact Assessment (EIA) states that the Uaru Development Project will develop the Uaru, Mako and Snoek oil-rich fields with the potential to develop other resources within the Licence area.

The project scope includes drilling approximately 38-63 development wells; installation and operation of Subsea Umbilicals, Risers, and Flowlines (SURF) equipment and installation and operation of a Floating Production, Storage, and Offloading (FPSO) vessel. EEPGL has not yet made a Final Investment Decision on the project, and is continuing to evaluate cost considerations during the project development process. For the purposes of the Uaru Development Project Environmental Authorisation process, EEPGL said the cost is estimated to be $2.638 trillion GYD ($12.683 billion USD).

A preliminary schedule anticipates that FPSO and other fabrication and installation works will begin in 2024 following the completion of engineering and will take approximately three years. Development well drilling may also occur during this period. Production operations are expected to begin in 2027 and will continue for at least 20 years.

With respect to the FPSO, EEPGL’s Environmental Impact Assessment states that oil production will average at 250,000 barrels of oil per day. Peak rates may be higher during the lifetime of the project, depending on multiple factors such as reservoir pressure, number of wells, equipment reliability etc.

“Currently, the FPSO basic design has an upper production limit of 263,000 BPD (42,080 m3) peak oil production rate. For the purposes of the EIA, production up to 300,000 bpd is considered to assess potential impacts from the project and cover potential production optimization after facility start up. If during the detailed design stage or during production operations an opportunity to expand the upper production limit arises, the project will document the evaluation and justification and an updated upper production limit will be available.”

The project will be producing 540 million standard cubic feet of gas per day.

Telecommunications equipment will also be installed on the FPSO to enable safe operation of the facilities in normal and emergency conditions. This equipment will allow communication with the offices, shorebases, support vessels, helicopters and tankers, as well as communication within the FPSO.

EEPGL had previously installed the Fibre Optic Cable Project, which provides the fibre optic communication infrastructure from the Stabroek Block to shore, enabling high-speed, low-latency communications and data transfer between EEPGL’s FPSOs and shore.

The Fibre Optic Cable Project included installation of two optical distribution units (ODUs), two main fibre optic trunk lines to shore, and fibre optic cables routed from the Destiny, Unity, Prosperity, and One Guyana FPSOs to the ODUs.

EEPGL plans to connect this Project’s FPSO into the existing fibre optic infrastructure back to shore, which will consist of two fibre optic cables connected from a Uaru subsea drill centre back to the existing two ODUs. From the Uaru subsea drill centre, the fibre optic cable will connect to the Uaru FPSO via one of the dynamic umbilicals, which will contain fibre strands.

There will be a demand of up to 540 persons required to drill and complete the Uaru development wells. The majority of these personnel will work offshoret on drill ships. In addition, there will be between 10 and 15 trips per week of the support vessels assisting the different drill ships. Most of these roles will require prior offshore oil and gas industry experience and specialized expertise.

However, the prior development of the Liza Phase 1, Liza Phase 2, Payara and Yellowtail Projects resulted in continuous capacity building of the workforce, as additional personnel are upskilled and given greater responsibilities. This will create opportunities to increase the pool of semi-skilled and skilled workers that can support the project. During long-term production operations, the in-country, direct offshore workforce will peak at around 100 to 160 people during periods of higher maintenance activity and during offloading of an FPSO.

During periods of regular operations, the workforce requirement on an FPSO is estimated to be on the order of 90 to 100 people.

 

 

Exxon consortium to develop fifth oilfield for $12.7B

The consortium led by Exxon Mobil will develop a fifth major oilfield in the prolific Stabroek Block offshore at an estimated cost of $12.7B.

 

The Uaru-Mako project currently under review could come onstream in the next three years, adding as many as 63 more wells to the 30 already drilled in the block by the group, which also includes Hess and PRC SOC CNOOC .

Releasing the field’s specifications for public review, Guyana’s Environmental Protection Agency said Uaru-Mako has at least 1.3B barrels of crude to add to the 10B-plus barrels in recoverable reserves the consortium has estimated so far.

According to the deal terms, the consortium will pay up-front development costs and recover 75% when revenues roll in; Exxon will receive additional revenues equivalent to another 12.5% of the cost, and Guyana will collect the final 12.5%, or ~$1.6B, as well as a 2% royalty on any revenues thereafter.

Wall Street is broadly bullish on Exxon Mobil but the stock has “nowhere to go but down,” David Alton Clark writes in an analysis newly posted on Seeking Alpha.

 

 

Exxon applies for approval of 6th project offshore

January 16, 20230

The EIA is needed to ascertain the potential physical, biological and socioeconomic impacts of the project and whether these will be significant and long-term. They also noted that the project is located relatively close to the other development projects, of which four have already received approval and two are producing oil.

The associated risks of unplanned events related to oil and gas may be significant. EPA invited the public to make written submissions on the project to the agency within 28 days. In these submissions, the public can ask questions and raise whatever issues they have about the project with the agency.

“The proposed project will be implemented in multiple stages which include well drillings and completions, mobilisation and installation of subsea equipment, umbilicals, risers and flowlines, installation of a floating production, storage and offloading (FPSO) facility, production operations and decommissioning,” EPA said in the notice.

“The proposed project will be undertaken largely in the marine offshore environment and would require land-based activities for support activities at marine shore bases. As a result of the intended development activities, possible effects to the environment may include impacts on marine water and air quality, marine fauna, socio-economic resources, among others.”

ExxonMobil found oil in the Whiptail-1 and 2 wells in July 2021, announcing that 246 feet of net oil were encountered in the former and 167 feet of net oil in the latter. Both discoveries were its 21st and 22nd oil discoveries in the Stabroek Block. The Whiptail-1 discovery was made after only a month of drilling.

The move to seek approval for the Whiptail development comes even as EPA is currently also considering whether to approve the Uaru oil development in the Stabroek Block, which when established will become ExxonMobil’s fifth development.

The Uaru oil development is targeting between 38 and 63 development wells, including production, water injection, and gas re-injection wells. John Hess, the Chief Executive Officer (CEO) of ExxonMobil’s Stabroek Block co-venture partner Hess Corporation, recently said that they are hopeful of approval for Uaru by March 2023. Exxon had previously also made known that they anticipate first oil from the Uaru development by late 2026 or early 2027.

Last year, it was announced that $88 million had been approved for a consultancy firm to review the Uaru Field Development Plan (FDP). Natural Resources Minister Vickram Bharrat made that revelation during the consideration of estimates and expenditures for the Natural Resources Ministry in the Committee of Supply.

Operator ExxonMobil began producing oil on December 20, 2019, in the Stabroek Block. Guyana’s oil revenues are held in the Natural Resource Fund (NRF) at the New York Federal Reserve Bank, where it is earning interest.

The petroliferous Stabroek Block, which is producing the oil, is 6.6 million acres (26,800 square kilometres). Exxon, through its local subsidiary Esso Exploration and Production Guyana Limited (EEPGL), is the operator and holds 45 per cent interest in the block. Hess Guyana Exploration Ltd holds 30 per cent interest, and CNOOC Petroleum Guyana Limited, a wholly-owned subsidiary of CNOOC Limited, holds the remaining 25 per cent interest.

ExxonMobil anticipates at least six projects offshore Guyana will be online by 2027. Production has already started in the second phase, with the Liza Unity FPSO vessel in operation.

The third project – the Payara Development – will target an estimated resource base of about 600 million oil-equivalent barrels, and was at one point considered to be the largest single planned investment in the history of Guyana.

 

 

 

ExxonMobil targets Whiptail as sixth development

Company filed application to deploy large FPSO to start production from the field by mid-2028

17 January 2023
By Fabio Palmigiani in Rio de Janeiro

US supermajor ExxonMobil has submitted an application for an environmental authorisation to develop the Whiptail find offshore Guyana, making it the sixth major production development in the prolific Stabroek block.

The company made the Whiptail-1 discovery in July 2021 by unlocking 75 metres of net pay in high quality oil-bearing sandstone reservoirs. A follow-up appraisal well, Whiptail-2, also encountered hydrocarbons.

ExxonMobil is now moving forward with plans to develop the Whiptail project, alongside two other discoveries — Tilapia-1 and Pinktail-1 — by installing a large floating production, storage and offloading (FPSO) facility.

 

 

India- high interest in Guyana oil

–As President Ali set to meet Indian Prime Minister

 January 9, 2023

INDIA will pursue its longstanding interest in oil in Guyana when Prime Minister, Narendra Modi meets President, Dr. Irfaan Ali, on his official visit to the Asian country and is conferred with a highly prestigious award .

Since President Ali and his delegation arrived in India, he has participated in several events at Indore, Madhya Pradesh and held bilateral talks with India’s Minister of External Affairs, Dr. Subrahmanyam Jaishankar. President Ali and Dr. Jaishankar held discussions on co-operation in the areas of energy, infrastructure, and digital technology.

The Indian Financial Express, offered greater details on the Indian government’s high interest in Guyana’s energy resources- particularly oil.

In response to a question by Financial Express Online, Secretary at India’s Ministry of External Affairs, Dr Ausaf Sayeed, said that President Ali and Prime Minister Modi are expected to meet this week.

“Energy will be one of the subjectswe would like to build upon, as India’s energy demands are expected to go up from 4.8 million barrels per day in 2021 to almost 11.1 million barrels per day as we look decades later.”

The report also stated that Sayeed highlighted that Indian companies are already importing crude from the Caribbean nation worth around US$1.5 million.

Other issues the two leaders will discuss include migration & mobility, food processing, infrastructure, agriculture and Information and Communication Technology (ICT).

Indian interest in Guyana is not new. Indian High Commissioner to Guyana, Dr. K. J. Srinivasa previously said that the Government of India is willing to purchase Guyana’s share of oil lifts at the market value, annually, and on a long-term basis, through a government-to-government agreement, since his country is a mass importer of oil.

Already, the country purchased at least two lifts of oil- that is, the two consignments of the one million barrels of oil the government receives on behalf of Guyana. That contributed to the US$200 million in bilateral trade between the two countries, based on latest figures. A long term supply deal has not yet been finalised.

President Ali will be conferred with the Pravasi Bharatiya Samman Award at the Indian Diaspora Day celebrations in Madhya Pradesh, a prestigious award for people of Indian origin living outside India and President Ali will be the Chief Guest at the award ceremony. Dr. Ali joins 26 other persons of Indian origin/non-resident Indians, including Surinamese President Chandrikapersad Santokhi, who have been recognised by the Government of India for their outstanding achievements both in India and abroad.

 

 

Joint venture with Indian firm to recruit skills

Jan 11, 2023

ACE Professional Services and Business Development Consultancy, a 100% Guyanese owned company, signed a Memorandum of Understanding on January 10, 2023 with Squadron, headquartered in Mumbai, India.

In a press release, ACE highlighted that the MoU seeks to formalise a teaming agreement, with the aim of recruiting skilled Indian nationals for highly specialised roles to support the rapidly-growing oil and gas sector in Guyana.

The MoU is a result of a seven-day visit to India, led by President Mohamed Irfaan Ali

“This partnership seeks to solve the manpower and labour challenges currently faced within Guyana’s economy.”

The lead representative of ACE, Dr. Rosh Khan declared, “As Guyana works to build capacity locally for the current and emerging needs of the country, this arrangement provides an immediate opportunity to solve the critical labour requirements in the oil and gas sector.”

“It also creates a platform for internationally-certified personnel to train Guyanese. This is key for the successful transfer of knowledge and skills to our local workforce. It should also be noted that we look forward to working with all of the relevant authorities to ensure full compliance with local and international laws.”

Chief Executive Officer of Squadron, Rajan Singh, noted: “We are pleased to partner with ACE and look forward to a fruitful engagement. I would also like to thank Mr. Komal Singh who assisted to facilitate this joint venture.”

 

 

Indian investment in hydrocarbon sector

NEW DELHI, Jan 10 (Reuters) –

Saurabh Kumar, a secretary in the Indian external affairs ministry said Guyana wants Indian companies to invest in its oil and gas sector as it aims to expand its nascent energy sector.

Guyana’s President Mohamed Irfaan Ali and Suriname’s President Chandrikapersad “Chan” Santokhi, who are visiting India, held discussions with Indian Prime Minister Narendra Modi at a conference in the central Indian state of Madhya Pradesh.

Guyana is home to one of the largest oil discoveries in the last decade. It currently produces 340,000 barrels per day (bpd) of oil and aims to raise it to 1.64 million bpd by end of the decade.   The senior Indian foreign ministry official said Guyana has sought the participation of Indian state-run and private companies in its hydrocarbon sector.

“We are looking for cooperation with Guyana, and Suriname, particularly with Guyana,” Kumar said, adding Ali would meet India’s oil minister Hardeep Singh Puri during his trip to New Delhi.

“In the next 3-4 months, you will see a massive expansion of Indian investment footprint in Guyana,” Ali said in an interview with broadcaster NDTV, adding that oil and gas will be among the sectors that will witness expansion of investment.

India, the world’s third biggest importer and consumer of oil, is diversifying its crude import sources and in 2021 imported Guyanese Liza crude.

by Nidhi Verma, Andrew Heavens, Susan Fenton and Marguerita Choy.

 

 

India collaboration

–in agro-processing, oil-and-gas sector, manufacturing, human-resource development and ‘tech’ transfer, President Ali says

 January 16, 2023

President, Dr Irfaan Ali told India’s NDTV there will be expansion in collaboration between Indian and Guyanese companies within the coming months, following his visit to India. He said his visit to India has been an expansive one which will strengthen collaboration between the two countries.

During his visit, he indicated that they are not looking only at government-to-government relationships but also private-sector collaboration.

He was accompanied by a large private-sector delegation, with the aim of creating consortiums and fostering partnerships.

“I am very confident that within the next three to four months, you will see a massive expansion of the Indian investment footprint in Guyana and a massive expansion in the collaboration between Indian companies and Guyanese companies building consortiums and building partnerships.”

Those partnerships will be in various sector, such as agro-processing oil-and-gas , manufacturing, human-resource development and the transfer of technology, among other things.

The relationship will expand in a massive way, between Guyana and India where transformation is already taking place .  Guyana’s position is strengthened by revenues from oil and gas and the government intends to use those resources to build a strong, sustainable and resilient economy for 2030 and beyond, that can withstand shocks and stand on many different pillars.

Guyana has to use its natural competitive advantages such as the rich natural resources which include freshwater, arable lands and more.

“What we want to do is position Guyana as a major energy provider, as a major food provider, building a food-production system, becoming a strong supplier of food in the region.”

Highlighting discussions during his visit, Dr Ali said he engaged Prime Minister Shri Narendra Modi, on how to build a partnership through which India can support the modernisation of Guyana’s military. There has been tremendous excitement from Prime Minister Modi on expanding the partnership.

President Ali said: “As a matter of fact, we are moving so quickly we have agreed to set up a technical working group.”

Guyana ministers will sit as co-chairs for technical groups to remove bureaucracy and works can be advanced smoothly in all the areas identified.

“We have expressed a strong desire to have Prime Minister Modi visit Guyana this year so that we can solidify and concretise many of the initiatives we discussed,” President Ali said, noting that the Prime Minister is working on ensuring that this happens quickly.

 

 

India’s assistance to boost agriculture, agro-processing

January 16, 2023

As part of its quest to be a leader in the Caribbean Community (CARICOM), Guyana is soliciting assistance from India in the form of technology and skilled manpower in the agriculture and agro-processing industries. President Irfaan Ali in India on a seven-day official state visit, held discussions on potential areas of cooperation with Union Agriculture and Farmers Welfare Minister of India, Shri Narendra Singh Tomar, in New Delhi.

President Ali hoped that India can help Guyana establish climate-resistant and higher-yield seed production for crops like sugarcane and coconut. Guyana is open to joint-venture mechanisms in the dairy sector to export dairy products and earn “millions of dollars” in foreign exchange.

 

 

Indian Ferry to arrive in February

January 6, 2023

Public Works Minister Bishop Juan Edghill has announced that Indian Vessel, MV MA Lisha is expected to arrive in port Georgetown in February.

The announcement was made in an interview with the Department of Public Information (DPI) on Wednesday.

“Sometime in February, that vessel should be arriving in Port Georgetown and that will be big for us in 2023. As I speak to you right now, we have three persons in India waiting for the boat to sail from Kolkata to Chennai, where it will join a submersible vessel and will be floating down to Port of Spain and then the boat will sail from Port of Spain to Georgetown,” he said.

The new $2.5 billion (US$12.7M) MV MA Lisha, from the native Warrau language meaning ‘friendship,’ is being funded by the Government of India, and will ply the Barima-Waini/ Georgetown route.

The North-West ferry is being built by Garden Reach Shipbuilders and Engineers Limited to facilitate special features to mitigate challenges faced by travellers.

It has a passenger capacity of 294, which means the boat can carry 276 revenue-paying passengers and 18 crew members. It also can carry 14 sedan-type vehicles along with two trucks. Business people and others who ship produce from and into the interior will now be able to get containers 10 ft by 10 ft since the vessel can carry 10 of those sizes.

The issue of spoilage will be significantly reduced or eliminated since the boat also has a refrigerated cargo capacity and cold room storage that will accommodate 43.98 m3 of merchandise.

The front of the vessel has a roll-on, roll-off facility which will enable it to discharge and board cargo at its port immediately without the use of a stelling. It also has a side boarding capacity.

To this end, there will be significant upgrades to the Kingston stelling, owned by the Transport and Harbours Department, to facilitate the new vessel.

Works on the Port Kaituma, Mabaruma and Morawhanna stellings are also being executed.

Meanwhile, captains and mechanical staff from the Transport and Harbours Department, who were sent to India for training, have returned and are awaiting the arrival of the vessel to train other staff.

 

 

Ali receives India’s highest overseas award

Jan 11, 2023

President Irfaan Ali was conferred with the Pravasi Bharatiya Samman Award (PBSA) for the year 2023, by President of India, Honourable Droupadi Murmu.

The award ceremony was held at the valedictory session of the 17th Pravasi Bharatiya Divas Convention 2023, Indore, India. The Pravasi Bharatiya Samman is the highest Indian award for non-resident Indian and overseas citizens of India or an organisation or institution, established and run by non-resident Indians or persons of Indian origin.

President Ali was among over 20 recipients recognised by the Government of India for their outstanding achievements both in India and abroad. He was honoured for his performance in politics/community welfare. He was invited as the chief guest for the convention and is accompanied by Foreign Affairs Minister, Hugh Todd; Minister within the Local Government and Regional Development Ministry, Anand Persaud and other officials.

India’s President, Droupadi Murmu indicated that the conferment will serve as an encouragement to the awardees, allowing them to pursue greater heights in the future.

India’s High Commissioner to Guyana, Dr. K. J Srinivasa congratulated President Ali for being the recipient of the prestigious award in recognition of his efforts to advance rapid and equitable development in Guyana. Dr. Srinivasa urged Guyanese to work for the growth and success of the nation and to play an active role in fulfilling the country’s unique destiny.

 

 

 

Working groups established to drive Guyana, India cooperation agenda – President Ali

January 17, 2023

Following a series of fruitful consultations between the Governments of Guyana and India, both nations have agreed to establish two working groups to push the agenda forward.

President, Dr Mohamed Irfaan Ali said the groups will see private sector representatives from the two countries, as well as government officials starting work almost immediately.

The Guyanese president recently led a team on an Official Visit to the South Asia state, where a wide range of opportunities for collaboration were discussed with the Indian authorities.

The talks were focused on a number of areas aligned with Guyana’s goal of expanding and developing its economy.

Business-to-business meetings were held with leading private sector organisations, companies, and industries.

During a media conference Tuesday, President Ali disclosed that after the meeting with Indian Prime Minister, Narendra Modi, a targeted approach was taken to identify areas where India could be a strategic partner in Guyana’s development.

During the talks, the two sides discussed a shared vision and commitment to various global issues including climate change, food security, energy security, and human development.

President Ali noted that discussions were held on ways to build a platform for creating a better global environment that supports peace, the development of humanity, and the advancement of technology.

Agriculture and food production was also a key focus during the talks, as it is a crucial element of Guyana’s development ambitions. Emphasis was also placed on the local sugar industry and aquaculture.

The head of state said the two sides held engagements on ways India could collaborate with Guyana in telemedicine and training, the advancement of the human resource pool, and Information Communications Technology (ICT).

The meeting also saw discussions on the development of port facilities and opportunities for oil and gas investment here, and the potential for collaboration in terms of training and modernising the Guyana Defence Force (GDF) and the Guyana Police Force (GPF).

Meanwhile, in Guyana, Agriculture Minister, Zulfikar Mustapha will lead talks on agriculture and building out the ecosystem to support the country’s food production aspirations.

Minister within the Public Works Ministry Deodat Indar is responsible for technology, Natural Resources Minister, Vickram Bharrat will engage on energy, and Tourism, Industry and Commerce Minister, Oneidge Walrond will follow up on ayurvedic and wellness, natural medicine and development.

The team also includes Public Service Minister, Sonia Parag, who will push talks in the area of human resource and capacity building.

Meanwhile, President Ali, the Chief of Staff, and the National Security Advisor will steer further talks on defence, while Foreign Affairs and International Cooperation Minister, Hugh Todd is tasked with coordinating.

 

 

Energy Conference

February 14-17, 2023

January 10, 2023

Organisers of the International Energy Conference and Expo Guyana 2023 announced that the World Bank representative for Guyana and Suriname, Diletta Doretti, will address the event in February. Doretti is responsible for maintaining the day-to-day dialogue and solid partnership around the World Bank’s programmes in both countries.

Since joining the institution in 2002, she held various positions at the World Bank, with the most recent being Senior Private Sector Development Specialist for the World Bank West Africa region, based in Mali.

Doretti has strong and diversified World Bank experience in leading teams and in corporate assignments, including country engagements and developing the World Bank’s strategies around the private sector, entrepreneurship and innovation.

Kurt Baboolall, Chief Executive Officer of the International Energy Conference and Expo Guyana 2023, said: “The World Bank representative, Ms. Doretti will give all stakeholders present at the conference a glimpse of how the US$44M allocated to Guyana last year will be spent on skills development in the emerging energy sector. We are pleased to welcome Ms. Doretti onboard for this year’s conference.”

Doretti is among speakers slated to deliver addresses at the Conference and Expo, including world- renowned economist and academic, Professor Jeffrey D. Sachs, and CEO of the Hess Corporation, John Hess.

Heads of Government expected to deliver remarks, include: President Dr. Mohamed Irfaan Ali; President Chandrikapersad Santokhi of Suriname and Dr. Keith Rowley, Prime Minister of Trinidad and Tobago.

The Conference and Expo is hosted under the theme: “Harnessing Energy for Development”, and will be held at the Marriott Hotel in Georgetown, Guyana February 14-17, 2023.

It is expected to assemble Heads of State, government officials, policymakers, academics, industry professionals and global energy thought-leaders.

 

 

ILO – oil sector moving too fast for small labour force

Jan 10, 2023

The International Labour Organisation (ILO) emphasised that Guyana’s oil and gas industry is moving too fast for the country’s limited skilled workforce in its report titled, ‘Prospective occupational skills needs in the Guyanese oil and gas industry, 2022-2026’ published back on December 19, 2022.

While oil resources placed Guyana among the top petroleum producers in the world, the lack of technical expertise and workforce capacity continue to be a bugbear.

Despite this, the Government earlier this year gave ExxonMobil, the green light for the fourth project (US$10B Yellowtail Development Project).Vice President, Bharrat Jagdeo, is driving oil companies to accelerate.

While the Government is persistent in hastening the industry, the ILO warns that such a move can end badly for Guyana.

“The accelerated expansion of the oil and gas operations (in Guyana) has exposed a pronounced gap between the industry’s labour demand and the availability of skilled workers at the local level.”

If the gap is not addressed, the latter will likely slow down the growth of the sector and of the whole economy or, at the very least, generate inefficiencies in the level of performance and for the economy.

The report is meant to support the Government , local stakeholders, employers, workers’ representatives, TVET institutions and academia to assess and, to the extent possible, anticipate the labour demand and skills needs. The report also provides an overview of how those needs are or could be addressed through the present educational infrastructure.

Upon surveying Guyana’s private sector, the ILO reported that engineers, specialists in occupational health and safety, and ship deck crews lead the list of “most in demand” jobs in the oil and gas industry over the next five years.

However, as noted by private sector respondents, the aforementioned jobs are perceived as not sufficiently available in the country. Added to this, it was highlighted that there is a need to upgrade Guyanese workers technical skills in areas such as rigging, welding, capacity to ensure compliance with health and safety standards and knowledge of nautical systems.

Over 80 percent of the total working age of the population did not proceed beyond upper secondary education and the required workforce in the coming years, is six times current workforce capacity.

‘Availability of qualified human resources’ is a key bugbear to the country’s development. It was explained that the Guyanese economy would have to overcome the aforementioned in order to fully benefit from the oil boom.

“Although oil and gas operations employ a wide range of jobs, including those occupations associated with low(er) skills level 6, an important proportion of the job openings require at least a higher technical or vocational degree.”

In contrast, the gross school enrolment ratio at tertiary level for Guyana is only about 12 percent, lower than the average 44 percent in other Latin America and the Caribbean countries.

Another hampering factor is the ‘Quantitatively limited workforce.’ Although the quality of available human capital is certainly worrisome, it is not the only constraint in Guyana. “Quantitatively, Guyana’s labour force is not big enough to serve the expected growth of the economy.”

The labour demand driven by the oil and gas sector and its support services in Guyana for the forthcoming years is estimated to be 260,000 workers, while Guyana’s national potential labour force is estimated to be a mere 39,342. Even under a hypothetical scenario where all unemployed, underemployed, and discouraged workers are trained, retrained, and up-skilled, to become employed the demand will still outstrip supply in the medium-term.

 

IDB- benefit from higher prices, levels of production

January 9, 2023

Guyana continues to be in a favourable position from its oil and gas sector, as the country is not only benefitting from higher energy prices but also from higher levels of oil production.

An Inter-American Development Bank (IDB) report titled ‘Headwinds facing the Post-Pandemic Recovery’, notes that specific commodities such as oil and aluminum are projected to have relatively high prices through 2024.

The price of oil is expected to remain over US$80 through 2024. These price trends and Guyana’s higher levels of oil production, significantly affected the profile of the country’s net trade in agricultural products and mineral fuels with the rest of the world.

Guyana rapidly moved from being a net importer of agricultural products and mineral fuels, representing 8 per cent of Gross Domestic Product (GDP) in 2018 and 2019, to being a net exporter of the same commodities, with a trade surplus of 16 per cent of GDP in 2020 and 31 per cent in 2021 with the rest of the world.

Prior to oil production, Guyana’s main suppliers driving the trade deficit in these products were Caribbean Community (CARICOM) states.

The share of net exports to these countries increased through 2021, reaching 17 per cent of GDP for net exports to North America and 14 per cent of GDP to other countries. As oil production continues ramping up, these trade surpluses are likely to continue growing.

In December 2022, President Dr Mohamed Irfaan Ali officially launched the first auction for the development of 14 oil blocks, as part of efforts to develop petroleum resources. The competitive bidding round is expected to close by April 14, 2023 and new contracts will be awarded by the end of May 2023.

The oil blocks on auction are for shallow and deep-water areas. There will be a minimum signature bonus requirement of US$10 million for shallow water and US$20 million for deep water blocks. Stronger qualifications and requirements are set for deep water exportation as against shallow water.

With a participation fee of US$20,000 contractors gain access to the virtual data room and participate in the competitive bidding process.

The president noted that Guyana’s offshore basin captivated the attention of the global oil market participants, as the world’s fastest-growing superbasin over the last four years.

Offshore Guyana is estimated to have potential resources in excess of 25 billion barrels of oil equivalent and an estimated reserve in excess of 11 billion barrels of oil equivalent.

The IDB report noted that soybean prices are expected to remain around 40 per cent higher than the pre – pandemic level in the medium term. In 2022, 366 acres of corn and 495 acres of soya beans were sowed. Over 400 tonnes of soya beans were produced at Tacama in 2022.

 

 

Noble rig spuds exploration well

January 23, 2023, by Melisa Cavcic

Partners in the Corentyne block – Canada’s CGX Energy and Frontera Energy – have started drilling an exploration well offshore Guyana with a Noble rig.

Following positive results from the first well, Kawa-1, Frontera and CGX disclosed a plan to spend up to $130 million on their second exploration well on the Corentyne block, called Wei-1. The spudding of this well was originally expected to take place in October 2022.

To this end, the JV exercised its option to use the Maersk Discoverer (now called Noble Discoverer) semi-submersible rig for the drilling of this well. Initially, the rig secured a contract in April 2021 for the drilling of the Kawa-1 exploration well on the Corentyne block.

Frontera and CGX revised the spud window for the Wei-1 well after the Noble Discoverer rig run into delays on its assignment with Shell in Trinidad and Tobago due to “unforeseen challenges to the exploration activities.” In light of this, the start of drilling operations in Guyana was anticipated between December 2022 and late January 2023.

In an update on Monday, 23 January 2023, CGX and Frontera reported that the drilling of the Wei-1 well – located on the Corentyne block, approximately 200 kilometres offshore from Georgetown, Guyana – has now started. These two players also announced that the government of Guyana has approved an appraisal plan for the northern section of the Corentyne block, which kicked off with the Wei-1 well.

Suresh Narine, Executive Co-Chairman of CGX’s Board of Directors, commented: “The Joint Venture is pleased to announce that it has spud the Wei-1 well offshore Guyana, and that the government of Guyana has approved the Joint Venture’s appraisal programme. Wei-1 will appraise both the Kawa-1 discovery as well as explore additional opportunities within the Corentyne block.

“The Wei-1 well is on-trend and positioned for success with both Kawa-1 and recent peer discoveries immediately adjacent to the northern section of the Corentyne block. The Joint Venture is grateful for the government of Guyana’s ongoing support as the Joint Venture worked towards spudding Wei-1 in-line with the previously agreed terms.”

Upon completion of Wei-1 drilling operations and detailed analysis of the results, the consideration of future wells may be on the agenda for the JV partners per the appraisal programme to evaluate possible development feasibility in the Kawa-1 discovery area and throughout the northern section of the Corentyne block. However, CGX and Frontera highlighted that any future drilling is contingent on positive results at Wei-1, as the JV has no further drilling obligations beyond this well.

Located approximately 14 kilometres northwest of the JV’s previous Kawa-1 light oil and condensate discovery, the Wei-1 well will be drilled in a water depth of approximately 1,912 feet (583 metres) to an anticipated total depth of 20,500 feet (6,248 metres). This well is targeting Maastrichtian, Campanian and Santonian aged stacked sands within channel and fan complexes in the northern section of the Corentyne block. The drilling operations are expected to take approximately 4-5 months to reach total depth.

Orlando Cabrales, Chief Executive Officer of Frontera, remarked: “We are very excited about the potentially transformational opportunity that is now before us on the Corentyne block in one of the most exciting exploration areas in the world and we look forward to safely and successfully drilling the Wei-1 well and potentially extending the Joint Venture’s recent light oil and condensate discovery at the Kawa-1 well.”

The 2009-built Noble Discoverer, which is carrying out this assignment, is a DSS-21 column-stabilized dynamically positioned, sixth-generation semi-submersible drilling rig, capable of operating in water depths of up to 10,000 ft.

Natural Resource Fund Board agreement with Bank of Guyana

January 18, 2023

Senior Finance Minister Dr. Ashni Singh oversaw the signing of the Operational Agreement for the Management of the Natural Resource Fund (NRF) between the Board of Directors of the Natural Resource Fund and the Bank of Guyana at the Ministry of Finance. The Agreement was signed by Chairman of the Board of Directors, Major General (retd) Joseph Singh, MSS and Governor of the Bank of Guyana, Dr. Gobind Ganga and is in keeping with Section 5 (6) (d) of the Natural Resource Fund Act of 2021 which states the Board is required to enter into an Operational Agreement with the Bank for the operational management of the Guyana’s Natural Resource Fund.

One of the key amendments in the NRF Act 2021 was strengthening the governance architecture of the Fund through the establishment of a Board of Directors tasked with the overall management of the Fund, reviewing and approving the policies of the Fund and monitoring its performance; thereby separating the management of the Fund from the Minister for Finance. In addition, a 9-member Public Accountability and Oversight Committee (PAOC), responsible for providing non-governmental oversight of the operations of the Fund, replaced the cumbersome 22-member committee . The Directors and PAOC members were appointed in August 2022.

In alignment with the requirement of the Natural Resource Fund Act, since April 2022, notifications of receipts of petroleum revenues are published in the Official Gazette and have been tabled in Parliament.

Prior to the signing of the Operational Agreement, Minister Singh provided policy guidance to the Board of Directors of the Natural Resource Fund with Budget 2023 having been presented on January 16, 2023.

The International Monetary Fund (IMF) Article IV Mission Report released in September 2022 commended the PPP/C Government on the amendments made to the NRF Act and highlighted:

“The NRF Act was strengthened recently. After a thorough review, and while restraining the spending of the oil receipts, the authorities amended the NRF Act in December 2021. The recent amendments set clear ceilings on withdrawals from the Fund for budgetary spending …’

Also witnessing the signing of the Operational Agreement were Board of Directors Ambassador Carolyn Rodrigues-Birkett, Professor Compton Bourne, O.E and Mr. Dunstan Barrow, CCH along with Chief Accountant of the Bank of Guyana Mr. Maurice Munro.

 

 

Guyana to inaugurate natural gas exports from offshore fields

Jan. 18, 2023 – Reuters

GEORGETOWN — Guyana’s revenue from oil exports and royalties this year is expected to climb 31% to $1.63 billion, Finance Minister Ashni Singh said on Jan. 16, on higher output from the addition of a third production facility near year-end.

The petrostate also plans to inaugurate natural gas exports from its offshore fields, with at least 50 MMcf/d to be sold from the two production vessels currently in service.

At the presentation of the budget for this year, the finance minister called 2022 “a major year for exploration,” with 11 oil exploration wells drilled and 10 new commercial discoveries.

The drilling results drove the reserves to over 11 Bbbl of recoverable oil. The country’s oil production could reach some 810,000 bbl/d by 2025 with the startup of the third production vessel.

A consortium led by US producer Exxon Mobil is responsible for all the country’s oil output. [See story below ]

Courtesy Hess, Guyana government

 

Exxon Ramps Up Oil Production Guyana

The nation’s oil and gas sector is estimated to have expanded by 125% last year, with a total of 101.4 MMbbl of oil produced, compared with 42.7 MMbbl in 2021.

The Natural Resource Fund held $1.27 billion at the end of 2022 after withdrawal of about $608 million to finance state development priorities.

The government separately plans to evaluate this quarter a total of nine bids received through a competitive process for building an oil refinery in the country.

01.18.2023

Opposition criticises Budget 2023

January 18, 2023

Senior Minister for Finance, Dr. Ashni Singh presented the 2023 National Budget to the National Assembly that has been commended by private sector bodies, as well as other organisations.

However, the APNU+AFC opposition criticised the budget, claiming that it will not benefit the ordinary Guyanese.

Attorney General and Minister of Legal Affairs, Anil Nandlall, SC, says he will not allow the negative rhetoric of the opposition to continue.

He highlighted many transformational projects in Budget 2023, that will create employment for all Guyanese.

Key in the budget is :

• the $84.9 billion to modernise the health sector and
• $94.4 billion to improve the education sector.
• Some $54.5 billion has been earmarked to develop housing areas,
• $19.7 billion for drainage and irrigation structures to alleviate flooding,
• $2 billion for the school feeding programme,
• and $136.1 billion to enhance roads and bridges nationwide.

“What is wrong with this opposition? They want us to walk around and give every Guyanese US $1 million in their hand, so everybody must stop working and just eat and live. That’s what they want, instant gratification.

“What we are doing here is building a country, we are planning an economy and managing the economy sustainably for the long term and medium-term future for Guyana…but a visionless opposition can’t see that.”

The government proposed in Budget 2023 to increase the ‘Because we Care’ cash grant from $25,000 to $35,000, an initiative that was discontinued by the APNU+AFC in 2015.

These funds, the AG said, will be injected into the economy benefitting every single Guyanese.  “It’s better these guys don’t speak rather than say what they’re saying and embarrass themselves and their supporters,.”

Debates will begin on the transformational $781. 9 billion budget next week, followed by the consideration of the estimates in the Committee of Supply after which the National Assembly is expected to approve the budget.

 

 

Exxon set to order 5th Guyana oil vessel, sizing up more blocks

By Sabrina Valle, Reuters

HOUSTON — Exxon Mobil is preparing to approve its fifth oil production project in Guyana and is considering taking additional exploration acreage, the head of its Guyanese operations, Alistair Routledge, told Reuters in an interview.

The efforts would add significantly to the $30 billion committed thus far by Exxon and Guyana partners Hess and CNOOC. The latest development will cost about 27% more than the last, a new estimate showed, reflecting inflation and the larger scope of the project.

The consortium aims to pump 1.2 MMbbl of oil and gas per day by 2027 from all the developments, according to Hess, nearly triple last year’s peak output.

Guyana has emerged as the world’s fastest-growing oil region since Exxon made its first offshore discovery in 2015. The consortium has found about 11 Bbbl of oil and gas. Guyana estimates its fields could hold 25 Bbbl and aims to produce 1.64 MMbbl/d by the end of the decade.

The development will cost about $12.68 billion, according to an estimate prepared for Guyana’s Environmental Protection Agency, 27% more than Exxon’s fourth development. Its oil would start flowing in 2027 and continue for 20 years, according to the Guyana government’s estimate.

Guyana last week estimated the project would require up to 600 workers at the peak of drilling activity, and employ up to 160 people thereafter. The project will release about 1 million tons per year of carbon dioxide emissions, it forecast.

Exxon has submitted a development plan for the oilfield, and an initial construction contract was awarded last fall to Japan’s Modec Inc. If the plan is approved by Guyana’s government, the consortium could sanction spending on the project about April, Routledge said.

April is when Guyana is due to hold its first competitive auction for new exploration areas. Exxon will consider bids on new blocks, the country chief said.

“Of course, we will look at it,” Routledge said, adding “it would be premature to say yes or no” to participation before the country releases the full terms of new production contracts.

The country disclosed last year a fiscal regime which raises Guyana’s share of oil riches to 27.5%, from 14.5%, through a mix of royalties and shared production. But it has yet to update the production sharing agreement for the blocks. Companies are weighing their own geological data on the areas.

More competition?
Exxon and its partners inaugurated Guyana’s production in 2019 and today deliver all the oil output in country, from their 6.6-million-acre (26,800 sq km) Stabroek block.

Areas on offer could potentially double the offshore acreage under exploration by the Exxon consortium. Licenses will cost between $10 million for the 11 blocks in shallow water, and $20 million for the three in ultradeepwater. The 14 blocks up for grabs cover about 2,000 sq km each.

The government wants the auction to reduce its dependence on Exxon and partners, which have become the lynchpin in a transformation to industrial from agriculture-based economy.

Guyana President Mohamed Irfaan Ali visited India last week to try to entice private companies and the government to join its oil business. Joint technical groups will explore bilateral cooperation, Ali said.

“Apart from the auction, we are discussing government-to-government partnership in a number of areas including exploration,” Ali said.