Ferry feasibility

2024, 01/24

Business barons and dons from T&T, Barbados and Guyana all agree that the proposed cargo ferry service to serve the three states will boost business and trade.

Barbados Coalition of Service Industries (BCSI) said that the “proposed ferry service connecting the sun-region will revolutionise Caricom  travel and trade and holds significant potential for the services sector in Barbados.”

The challenge with regional connectivity via air link has had a negative impact on movement of professional services and leisure travel across the region. This proposed initiative will be instrumental in fostering regional integration and cooperation, while creating opportunities for businesses, individuals and tourism.

“The ferry service will likely be an attraction for visitors from around the world, enhancing their Caribbean experience and invigorating tourism, increasing economic activity. It will position Barbados as a strategic hub for commerce, facilitating trade and investment opportunities and enhance cultural and educational exchanges, promoting a vibrant regional community.“

The BCSI hopes that logistical issues can be expedited before the ferry becomes a reality, to unleash the potential of this new connectivity which will allow the southern Caribbean to embark on a new era of unexplored interconnectedness, collaboration and growth. Barbados Minister of Foreign Affairs said that civil servants were still examining a deal to link the three neighbours by sea and he hoped the service would start sooner rather than later.

“The proposal to initiate the regional ferry service is all about finding a way of deepening our regional cooperation in order to secure access to fresh produce and commercial products for our communities in this area of CARICOM. It is a direct response to the escalating cost of living and to the challenges regional governments have long faced with regard to food security and high food import costs.”

Prime Minister Keith Rowley noted T&T involvement at the opening of the Phoenix Park Industrial Estate.  “..you would have heard of discussions to establish a regional cargo ferry service between Guyana, T&T and Barbados.”

Economic benefits will be derived from the ferry service.

“The outcome of such a transportation service can only improve our food security, stimulate production across the region, create jobs and support affordable prices of the many agricultural products we desire at our tables and in our hotels.”

Winston Dookeran, former TT Central Bank Governor and Finance Minister under the People’s Partnership Government predicted that once the proposed ferry becomes a reality, it will have positive economic benefits.

“Increasing sea transport among these countries will be of great economic benefit, and will foster the ‘convergence space’ for economic activities. Some years ago, I promoted the convergence of the ‘Guyana shield’ countries and T&T and Barbados. If such a space is being developed, it may have larger economic benefits to increasing trade and development.”

To determine how feasible this project would be, Dookeran advised technical studies must be done. He suggested private sector funding for it as governments tend not to handle such projects well.

“The key question, however, is the financial viability of the project and how any operating deficit will be funded. Funding by governments has not been, and will not be plausible, so the studies that preceded this decision must be clear on the financial aspect of this project. Otherwise, the commercial risk will render the project unsustainable. I am not privy to the studies and the public should be aware of it, to instil confidence, or this may just be optics. Is this project the outcome of the joint commission, announced some time ago, between Guyana and T&T? What has come out of that Commission? Answers to these and other questions on finance will add light and remove scepticism that is part of announcements by Governments today-the public has a right to know. “

Guyanese President Irfaan Ali confirmed the project was proceeding at a signing ceremony for a new US$35 million Mackenzie/Wismar Bridge in the Upper Demerara- Berbice district on January 4.

Dr Raymond Kirton thought the proposed project had great value.
“I think that if properly managed, the ferry can provide the basis for increased trade, and more diversified exports, especially in the agricultural and agro – industrial sector. Easier and more reliable access can lead to higher levels of production, assist in job creation and contribute to the reduction of extra—regional imports as envisaged by the Caricom 25 by 25 project, which refers to reducing extra-regional agri-food imports by 25 per cent by 2025. It can also boost tourism among the states, enhance cultural exchange and promote greater regional understanding.

A former diplomat advised feasibility studies to determine if the project makes sense.
“There is a clear need for better air and sea links among Caricom states to facilitate increased and cheaper movement of people and goods. But has a feasibility study been done to assess the viability and economic benefits of a T&T-Barbados-Guyana route? It does not appear so. The danger here is that this is an initiative driven by politics rather than economics.”

A ferry service which operates across the French and English- speaking Caribbean islands works efficiently. The service, offered by the French company, L’Express des Iles”, traversing the route Guadeloupe-Dominica-Martinique-St. Lucia appears to work quite well although it would be interesting to find out to what extent, if any, it is subsidised by the French Government.

Significantly, no leg is longer than the two and a quarter hours between Dominica and Guadeloupe. If anyone studied the French Caribbean experience, lessons can be applied to the T&T-Barbados-Guyana proposal.

He questioned if the Galleons Passage, which Prime Minister Rowley suggested as one of the ferries, was the right choice. The distance between Port-of-Spain and Port Georgetown is 399 nautical miles, which takes a cargo vessel approximately 1.7 days, at an average speed of 10 knots. The Galleons Passage is not a fast ferry and would not be expected to top 20 knots. It takes four hours to sail from Port-of-Spain to Tobago. At least 20-27 hours would be in order for the Georgetown to Port of Spain route. Is the Galleons Passage the right type of ferry for this route? Has a cost benefit analysis been done of its capacity to transport 60 cars and 400 passengers?”

 

 

 

Ramps Logistics joins regional ferry service

2024, 01/25

Shaun Rampersad of Ramps Logistics met Prime Minister Dr Keith Rowley after the opening of the Energy Conference in Port-of-Spain.

Ramps Logistics is part of a private sector-led regional ferry service launched in Barbados, which aims to increase and improve transportation among Caricom countries. The focus routes for the Barbados project are Trinidad and Tobago, Guyana, Antigua and Barbuda, St Vincent and the Grenadines, Grenada, St Kitts and Nevis, St Lucia, Dominica, Suriname and Barbados.

“Connect Caribe,” said its services will be a game changer in the transport industry. Three vessels will have the capacity to transport up to 8,000 passengers, cargo and manufactured goods and produce.

Upturn Funds Caribbean in collaboration with Pleion Group Inc unveiled the joint-venture partnership, which led to the establishment of the new private sector-led ferry company.

Its mission is “to provide the region with world-class transportation and logistics solutions aimed at revolutionising maritime transportation in the Caribbean”.

Upturn Funds Caribbean is a venture capital and advisory firm based in Barbados with headquarters in New York, while the Pleion Group Inc is a Caribbean and US-based company with offices in the USA, Barbados, Guyana, Trinidad and Jamaica.

The Upturn Funds statement said its “distinguished partners” include Windward Ferries Ltd, the Anthony Hinkson Consultancy, JS Cruises and Tours, and the Trinidad-based Ramps Logistics.

“The strategic partners promise to bring about a new era of connectivity and accessibility, positively impacting the region”

Speaking at the regional launch here, Dr Andre Thomas, the co-founder and chief executive officer for the Caribbean region; said the consortium has brought together a variety of experts from different fields.

“We actually realise that the key was finding the success equation that will make this project happen and make this project bankable and profitable and add value to the men and women of the Caribbean, add value to investors, add value to shareholders. It became very clear to us that what we had to do was create a consortium that would be made up of key players in different sectors of the maritime industry and also to bring in an e-commerce element to it. We are in talks with the governments. There is a significant discussion on how we can integrate and tackle this huge opportunity and problem. Where there are problems there are opportunities. There will be significant collaboration between the service by the governments and our service.”

This first phase of the estimated US$50 million project is expected to come on stream during the last quarter of 2024 and will later be expanded to new island routes in the Caribbean Sea.

President and chairman of JS Cruises and Tours and Maritime Institute of Barbados, Judeen Scantlebury, spoke of the value of the service to the region.

“This new ferry service is poised to bring a multitude of benefits to the region. Not only will it provide reliable and efficient transport for locals and tourists, but it will also stimulate economic growth, promote tourism and enhance connectivity . This service has the potential to transform the way people travel throughout the region and I am passionate to be a part of this project.”

President of the e-commerce division, founder of the Anthony Hinkson Consultancy, Anthony Hickson, told the ceremony that the new initiative would be beneficial to Caricom Single Market and Economy (CSME) promoting free movement of goods, skills, labour and services across the region.

“The Caricom Single Market and Economy is intended to benefit the region by providing more and better opportunities to produce and sell goods and services and attract investments. It will create one large market among the participating member states.”

There are two main challenges to achieving this.

“One, product awareness, second product transport. Even when we have goods produced in other territories, the cost of transporting those goods from one territory to another can be either prohibitive in costs or prohibitive in terms of time.

Connect Caribe is addressing these problems through the combination of our e-commerce platform, connecting e-shops with the timely and cost effective cargo transport capacity of our inter-island ferries.

We are going to be the E-commerce marketplace for the region. Our goal is to facilitate economic transformation within our region by creating this market place which will allow our users to build e-commerce businesses by local, regional, and extra-regional sales.”

The project emerged weeks after the governments of T&T, Barbados and Guyana announced plans for a ferry service between the three countries.   The launch of the new initiative comes less than a month after Trinidad and Tobago confirmed that efforts are well advanced for a regional ferry service that would link the country with Guyana and Barbados.

Prime Minister Dr. Keith Rowley, addressing the launch of the Phoenix Park Industrial Estate (PPIE) at Point Lisas in Central Trinidad, said “.. you would have heard of a readiness to establish a regional cargo ferry service between Guyana, Trinidad and Tobago and Barbados.

“This is a decision driven by the need to move raw materials and fresh produce from the producing areas to the consumption and manufacturing areas within this sub-zone of Caricom…he “outcome of such a transportation service can only improve our food security, stimulate production across the region, create jobs and support affordable prices of the many agricultural products which we desire at our tables and in our hotels”.

Earlier this month, Guyana’s President Irfaan Ali said that the three countries had “formed a joint company that would work for the introduction of a ferry system for passenger and cargo between Trinidad and Tobago, Guyana and Barbados”.

Ali, speaking at the signing ceremony for a new US$35 million Mackenzie/Wismar Bridge, did not elaborate,

Countries have identified both sea and air transportation as a major constraint facing the regional integration movement. Caricom has set itself a target of reducing its multi-billion US dollar food import bill by 25 per cent by 2025.

In 2022, Caricom approached the United Arab Emirates (UAE) for funding to establish this intra-regional ferry service with the Barbados-based Caribbean Development Bank (CDB) being tasked with a proposed roadmap study for a fast ferry service with an initial focus on trade between Guyana, Trinidad and Tobago, Grenada, and Barbados.

(CMC)

 

 

Capitalizing on carbon credits

News Americas, NEW YORK, Jan. 22, 2024

Latin Finance reports Guyana is strategically focusing on boosting revenue from carbon credits as it strives to mitigate environmental impact of burgeoning offshore oil projects,

In late 2022, the petrostate inked a significant agreement with US-based oil and gas producer Hess Corporation. Finance Minister Ashni Singh indicated that Guyana is poised to initiate new carbon credit deals when market conditions are favorable.

The agreement with Hess, a member of a consortium involved in oil exploration in Guyana, encompasses a value of $750 million in carbon credits spread over a 15-year period. This landmark deal accounts for approximately one-third of the total carbon credits that Guyana can offer.

Singh revealed that they received multiple offers when finalizing the agreement with Hess, affirming that there is substantial interest from various parties. During the World Bank/IMF annual meeting in Morocco, Singh emphasized the importance of timing to secure the best possible price, indicating that carbon credits represent the third source of income for the country, following domestic revenue mobilization and oil revenue.

While Singh did not rule out the possibility of issuing a sovereign bond in the future, Guyana is eager to establish its reputation in the carbon credit market. The Hess deal holds particular significance for Guyana as private companies, led by ExxonMobil, are scaling up oil production over 100 miles off its coast.

With 46 discoveries , the country is expected to produce approximately 1.2 million barrels of oil per day by 2027.

In Guyana’s first foray into carbon credits occurred in the early 2000s, it received around $250 million from Norway for forest conservation. Amazon forests cover two-thirds of Guyana and the government aims to leverage its impressive track record in averting rampant deforestation, in contrast to other members of the Amazon Cooperation Treaty Organization.

In a new category known as “high forest cover/low deforestation countries,” Guyana ranks first among 33 nations globally. The government is resolute in its stance that preserving standing forests is an efficient means of combating climate change and seeks compensation for its conservation efforts.

Guyana is taking proactive steps to reduce greenhouse gas emissions from its energy sector by transitioning to natural gas, hydroelectric plants and solar power generation, while ensuring that new transportation and agri-business infrastructure align with environmentally friendly practices.

The ambitious plan includes adding 50,000 acres of new farmland equipped with irrigation and drainage systems designed to minimize environmental impact.

Despite Guyana’s trajectory as a significant oil producer, its vast forests and minimal environmental footprint position it as a carbon-sink country.

Singh emphasized that the story of sustainable forest management, in many ways, parallels the narrative of its oil industry and is equally crucial in addressing global environmental challenges.

The push comes as Guyana has been forced to defend Essequibo territory, holding most of its forests and natural resources, which Venezuela aims to annex.

 

 

 

Natural gas infrastructure

Natural Gas World

“The South American petrostate has made 46 significant oil discoveries in recent years in its offshore zone, but the government next wants to focus on developing the large natural and associated gas resources found offshore.”

 

 

 

Exxon Taps Gas Riches

Tsvetana Paraskova – Jan 22, 2024

After boosting oil production to over 500,000 barrels per day in five years, the world’s newest crude oil exporter, Guyana,  aims to develop its significant natural gas resources, too. ExxonMobil consortium pumping all of Guyana’s crude oil, is positioning itself to explore and understand the natural gas reserves in the country this year.

The government and the U.S. supermajor hope to finalize a timeline to develop some of the gas resources in the eastern part of the Exxon-operated Stabroek Block which holds higher gas content than the western part, where operating oil projects are located.

Guyana wants to advance its gas exploration and production industry sooner rather than later, considering the net-zero drive worldwide and the pivot from fossil fuels. Alongside oil producing projects, natural gas exploration and development is a key priority for both ExxonMobil and the government, company executives and government officials indicated.. ExxonMobil Guyana president Alistair Routledge said,

“Between the exploration and appraisal activity, and then the concept work we’re doing, we’ll have a better feel for the timeline to develop the gas around the end of this year.”

Guyana’s Vice President Bharrat Jagdeo said, “The first priority now is to have that discussion with Exxon on the development, volumes and timeline of gas supply. Due to the urgency of getting the natural gas to markets while gas demand is still growing, We need them to share our view that these resources must be developed urgently, because of this timeline.”

Guyana has become a hotspot for oil exploration and development in recent years after Exxon found over 11 billion barrels of oil equivalent offshore. Exxon, leading a consortium with U.S. Hess Corporation, now Chevron, produces all the crude oil in Guyana—the world’s newest oil-producer. Total oil production from the first three Stabroek block projects exceeds 550,000 barrels per day (bpd) and is expected to reach over 600,000 bpd later this year.

The latest Exxon project, Payara, and the Liza Phase 1 and Liza Phase 2 projects, are designed to eliminate routine flaring by using produced gas to power the floating, production, storage, and offloading (FPSO) vessel, and reinjecting the rest of the gas into the reservoir to improve oil recovery.

After 46 discoveries, Exxon continues to explore Stabroek and develop new projects but is now reviewing the gas-rich part of the block to develop plans for natural gas production. The company and the government are working on a Gas to Energy Project, which has the potential to significantly reduce the cost of electricity, with start-up expected by the end of 2024.

The government drafted a ‘Guyana Gas Monetization Strategy’ and earlier this month invited private companies to submit proposals on the design, construction, and operation of offshore gas gathering systems.

The Draft Gas Plan states, “To timely monetize and maximize the value of all of Guyana’s O&G resources, new gas monetization options and solutions need to be developed, including the participation of additional players in the O&G value chain besides the upstream project developers.

There are many benefits associated with natural gas and derived products, but time is of the essence due to market forces and uncertainties associated with the pace of the energy transition and ensuring that new O&G producers have a fair and just opportunity to develop their natural resources.

There is an immediate window of opportunity to monetize natural gas resources if Guyana seeks to monetize and maximize the value of its O&G resources.”

The government, like Exxon, is focusing this year not only on boosting oil production but also on advancing exploration and development plans for abundant natural gas reserves.

 

 

UK-based junior share price sinks as supermajors exit licence

TotalEnergies and Qatar Energy exit Orinduik acreage but Eco Atlantic remains bullish

22 January 2024 Iain Esau

The share price of London-listed junior Eco Atlantic hit its lowest level in seven years in London on news that TotalEnergies and Qatar Energy decided to exit its offshore exploration licence . Last year, Eco struck a deal to acquire Tullow Oil’s 60% interest in the Orinduik block, boosting its own holding to 75% and leaving a joint venture of TotalEnergies and Qatar Energy on 25%.

 

 

Eco Atlantic expands activities

January 22, 2024 (WO)

Eco (Atlantic) Oil & Gas Ltd’s (“Eco”) provided an operational update on entering the next license phase for Orinduik block offshore , near ExxonMobil’s Liza discovery and the Stabroek Block.

Orinduik license operational update:- As Operator, Eco Orinduik BV gave notice to the Minister of Natural Resources of the Cooperative Republic of Guyana (“MNR”) to enter the second phase of the second renewal period of the Orinduik licence. This has a commitment to drill one exploration well to the Cretaceous formation during the remainder of the license period, which ends Jan. 2026.

Eco advised MNR that TOQAP Guyana B.V (the SPV joint entity held by TotalEnergies and QatarEnergy 60:40) relinquished their 25% WI for strategic reasons and will not participate in the next phase. The former TOQAP Guyana B.V 25% WI will be assigned to Eco Guyana. Eco will remain the operator holding 40% WI in Orinduik license as Eco Guyana and 60% WI as Eco Orinduik BV.

Colin Kinley, Co-founder and Chief Operating Officer of Eco Atlantic, commented, “Knowing the material value and potential of Orinduik Block, Eco acquired Tullow’s 60% WI and has remained focused on drilling a massive, stacked pay interval in the Southeastern quadrant of the block. Eco Atlantic, now the approved operator, intends to bring in new partners and to drill the significant potential of the Cretaceous interval on the Guyana oil fairway. With this well commitment, we now move into planning and engineering preparations to drill in next 12-18 months. We feel extremely positive about the future of the Orinduik block, receiving significant interest from key industry partners and IOCs in our recently commenced farm out process. We will provide further updates to shareholders on operational and farm out progress throughout the year.”

 

 

Eco Atlantic to assume outright ownership of Orinduik block

Jan. 22, 2024

Offshore staff  TORONTO, Canada —

Eco Orinduik has informed Guyana’s Minister of Natural Resources of its intention to enter the second phase of the second renewal period of the offshore Orinduik license.

There is a commitment to drill one exploration well into the Cretaceous Formation before the license period ends on Jan. 13, 2026. TOQAP Guyana, the joint entity held 60:40 by TotalEnergies and QatarEnergy, has relinquished its 25% interest and will not participate in the next phase. That interest will now transfer to Eco Guyana.

Subject to government approvals, Eco will remain operator of the licence with a 40% stake, the remaining 60% held by Eco Orinduik. Colin Kinley, co-founder and COO of parent company Eco (Atlantic), said:

“Knowing the material value and potential of Orinduik Block, Eco acquired Tullow’s 60% WI and has remained focused on drilling a massive, stacked pay interval in the southeastern quadrant of the block.

“Eco Atlantic now…intends to bring in new partners and to drill the significant potential of the Cretaceous interval on the Guyana oil fairway…we now move into planning and engineering preparations to drill in next 12-18 months.”

 

 

Investor for Berbice oil refinery

January 17, 2024

In his presentation on the fiscal plan for 2024 in the National Assembly Senior Minister for Finance , Dr Ashni Singh revealed that the government is evaluating five proposals to construct an oil refinery in Region Six and the final investor will be chosen by the end of the first quarter of 2024. . Initially, the government received nine proposals following the launching of requests for proposals (RFPs) in 2022, after which potential investors were reduced to five.

“Following this, the top-ranked contender will undertake an Environmental and Social Impact Assessment at Crab Island for a facility designed to process at least 30,000 bpd.”

The investment commitment from these shortlisted firms is expected to exceed US$1 billion.

An oil refinery is an industrial plant where crude oil is processed to produce marketable petroleum products, such as gasoline, asphalt, and kerosene. The construction plan for the refinery is aligned with the government’s vision of promoting value-added production and ensuring energy security for both Guyana and the region. Guyana has the potential to market crude oil components to various industries for a broad range of purposes once a local oil refinery is operational. These can be used as fuels for transportation, paving roads, generating electricity, and as raw materials for chemical manufacturing. It is also an integral part of the development plan for Region Six.

 

 

Oil exports earned US$11.6B

Jan 16, 2024

Senior Finance Minister Dr. Ashni Singh reported that export earnings for the oil sector grew by 18 percent to US$11. 6 billion. During his 2024 budget presentation, he said this represents an estimated 40.2 percent increase in export volume. Earnings from non-oil exports amounted to an estimated US$1.5 billion, growing by 8.7 percent, and reflecting growth in commodities such as sugar, rice, and bulk alcohol. This also offsets the lower earnings received from the gold and bauxite sectors.

Import payments expanded by 83.1 percent to an estimated US$6,636 million in 2023. This is mainly due to the arrival of the Prosperity floating, production, storage and offloading (FPSO) vessel at the Payara Project in the ExxonMobil-operated Stabroek Block.

This contributed approximately 26.6 percent to import costs. Increases across all major import categories are estimated. Specifically, imports of capital goods rose by an estimated US$2.5 billion over the review period, largely reflecting higher payments for mining machinery. This is mostly on account of the Prosperity FPSO, along with transport machinery, which grew by an estimated US$2, billion and US$176 million, respectively.

Intermediate goods grew by an estimated US$358.8 million, largely indicating increased imports of parts and accessories and other intermediate goods. Consumption goods expanded by an estimated US$181.9 million with increases across all sub-categories, particularly motor cars and food for final consumption, which grew by an estimated US$83.2 million and US$39.8 million, respectively.

Inflation was estimated at 2 percent at the end of 2023. This is significantly lower than the 7.2 percent recorded in 2022. Notably, food prices in the consumer basket rose by an estimated 3.8 percent at the end of 2023, substantially lower than the 14.1 percent increase at the end of 2022.