Guyana International Petroleum Summit and Exhibition
Participant Companies in GIPEX 2019
Men of the moment
ExxonMobil, strategic partner, was the star of the show.
Keynote speaker, Hunter Farris, Senior Vice President, Upstream Oil and Gas Deep Water, ExxonMobil, set the tone with an upbeat presentation on high-tech drillships, expenditure of USD180 million, doing business with 600 local companies and suppliers and 1700 local employees at the elite explorer.
Rod Henson, now Esso Guyana President joined Total and Repsol to highlight evolvution from early entry in an embryonic office, into the mighty modern operator in a consortium with 14 magnificent discoveries in 5 years with a historic, unprecedented, global, deepwater development of the iconic Stabroek Block.
He updated delegates on the remarkable progress of a historic project from 2015 to 2019, trainees in Canada, workforce and supplier development, success stories including the shorebase and operations with 94% Guyanese partners, CLBD, strategic community investment, turning strategy to reality, UG technical support, supplier spend transforming the economy, spill response, working together, collaboration, cooperation to harness resources and deliver First Oil.
Approachable, charismatic and humble, Handsome Henson is the epitome of the international oil baron, deserving success after patient, scientific investigation in the high-risk Atlantic Guyana-Suriname Basin, achieving the remarkable prize that eluded Royal Dutch Shell and other petroleum. pioneers.
P. Henry of the Centre for Local Business development presented a workshop on opprtunities.
Advantages of The Supplier Registration Portal, SRP, include business registration, interaction and information sharing. www.clbdportal.com.
A. Samaroo, Facilities Engineer, contributed to a panel on young professionals.
Other presenters covered the wide range of petroleum technology activity.
President Granger said that the emerging petroleum industry provides an “exciting economic and enterprising development” for Guyana and will enhance economic growth by increasing investment, including upstream investment.
The Caribbean Community (CARICOM) country has a “bright future” and the “prospects for economic progress and prosperity are limitless, given its bountiful natural and human resources and the significant petroleum discoveries in the country’s maritime zone”.
Guyana’s Green State Development Strategy: Vision 2040 is its development roadmap for the next 20 years and aims “an inclusive and prosperous Guyana that provides a good quality of life for all its citizens based on sound education and social protection, low-carbon and resilient development, providing new economic opportunities, justice and political empowerment”.
The strategy recognises the catalytic impact which the petroleum industry will have on the country’s economy, including “providing it with the opportunity to shift its development path, modernise its economy and transform the lives of its citizens”.
Guyana will employ its petroleum industry revenues to strengthen the traditional pillars of the economy, extend and improve its infrastructure, diversify the economy along a green trajectory of development and enhance, further, its human resources and institutional capacity. These developments will catalyse tremendous business and employment opportunities.
“Guyana is being prudent about managing its incipient petroleum industry. It is seeking the best advice and assistance and adopting the best international industry practices. It will establish a robust institutional legal and regulatory architecture to manage this industry in a manner which will ensure transparency and which will secure best interests of the country and fair returns for investors and businesses.”
While Guyana welcomes further investment, both in the petroleum industry and in emerging green economy, it is keen to ensure conditions which encourage increased local content and which promote more partnerships between local and foreign investors. GIPEX “is a demonstration of the country’s interest in the incipient petroleum industry”.
Suresh Narine of CGX surveyed the history of oil exploration in Guyana.
WIlliam Heins of Getech showed interesting maps of Guyana during Atlantic rifting.
Dale Blue of Halliburton illustrated digital linking of geoscience and engineering to improve performance.
Greg Hill of Hess discussed significance of Guyana as an emerging global oil resource.
Oliver Wattez of Total and Maria Guedez of Repsol reviewed high-impact drilling programs.
J-M Lavergne of Total and G. Martelli of Saipem highlighted the contribution of their companies.
C. Duggan presented a report on Tullow in Guyana.
D. Eisler of Baker Hughes offered a Low Carbon Overview.
S. Moreira of World Bank and G. Dirks of Arizona State University contributed to a panel on structured development policies for management of petroleum resources, tax and wealth funds.
P. Haas of Hartree Partners, W. Ramoutar of PwC and S. Parker of Rystad contributed to a panel on economic diversity.
SBM Offshore and Technip FMC reviewed their vital operations offshore.
P. Mohammed of UG chaired a panel on tertiary education including ECO, UWI and Arizona State University.
N. La Cruz of Michigan University highlighted young professionals on a panel with Saipem and GCCI.
JHI displayed marvellous maps of maritime Guyana beside Tethys Ocean during Atlantic rifting. JHI co-hosted a public lecture with AmCham Guyana at Roraima Duke Lodge, Georgetown.
Richard Boyce
The lecture, ‘How did we arrive at First Oil in Guyana: A JHI Perspective’, was delivered by Richard Boyce, Executive Vice President and a Co-Founder of JHI Associates, Inc.
He focussed on his experience from a 40-year career as an exploration geologist and geophysicist, in companies large and small. He discussed the basics of oil and gas formation, how to make and read topographical maps from sub-sea seismic data, and how to identify potential oil fields on that seismic data.
Other presenters from JHI explained their roles, including legal, finance, and investor relations, demonstrating the need for a variety of disciplines within the oil industry.
JHI explained that First Oil is about more than turning on the taps. “Hard work from a lot of people with varying backgrounds and disciplines is required to find, produce, and market oil and natural gas. Practical videos, highlighting each phase of the exploration process, will be used throughout the presentations. The goal of the presentation is to use hands-on demonstrations to explain how oil and gas are formed, and the modern techniques companies like JHI are using to find oil and gas offshore Guyana. It will also outline how students may get involved in the oil exploration business.”
J-L Chassagne of InterOil revealed plans for Essequibo shore base.
InterOil Guyana Incorporated (IOG) which entered a joint venture with Mings Products and Services, to construct a shore base facility for the oil sector on the West Bank of Essequibo will employ Guyanese, amid debate over foreign companies investing in the oil sector helping locals. IOG intends to work with stakeholders involved in the oil sector.
n support of the local content development initiatives, InterOil Guyana Inc and ISIKA Shore Base Inc are fully committed to working with international and domestic companies in maximising local content in their operations in a sustainable manner, “through the use of Guyanese human resources, materials, equipment and services.”
ll activities at the ISIKA Shore Base will be centred on people, quality, health, safety and international environment standards. The shore base will provide great opportunities for Guyanese companies to participate in oil and gas local content-related activities, generating much-needed employment as well as skills development and technology transfer. Construction will begin in the next few months and phase one of the project is expected to be completed by late 2020.
Phase one of the shore base is expected to be operational by the first quarter of 2021. The tendering process for Civil, Marine and Dredging works have been completed. Contractors hail from India, China, Brazil and Europe.
“Within the 330 acres of land with approximately 1500 feet of waterfront, phase one of the project will encompass industrial areas, offices, warehouses, workshops, spool base, a liquid mud plant, equipment and construction laydown areas for all oil and gas-related activities.” The technical area will accommodate a large facility for the storage of gasoil and gasoline, water and sewage treatment plants and the power plant to ensure continuous power supply to the entire shore base.
Georgetown Chamber of Commerce and Industry
President of the GCCI, Nicholas Deygoo-Boyer made a strong case for the implementation of a Local Content Policy before First Oil on the final day of the second annual GIPEX. There is staunch advocacy for local content policy and legislation and criticisms of the past policy drafts.
Going into oil production before a local content policy is passed would be a failure on Guyana’s part. The Chamber President explained in the presence of Department of Energy officials and foreign investors, that contrary to the assumption by some that local content comes at the expense of Foreign Direct Investment (FDI), it would actually have the effect of encouraging investment.
The oil sector is almost as expensive as it is lucrative. Hence, large investment sums are often plugged into projects. Smart investment, ensures minimal risk. Media reports on local content and other issues of the budding oil sector may leave investors with a level of uncertainty because although support for local content is almost unanimous, differing views on what constitutes a sufficient commitment by a foreign company causes the goalpost to shift so much that investors may be uncertain about where they should stand.
“I would [be uncertain too] if I was sitting in your place,” he told a room filled mostly by foreigners. “Looking at the headlines, I’d say ‘You know, it makes me nervous to think that I’d want to risk capital in here’.” On the other hand, the opportunity before Guyana is greater than most, if not all, of the prospects they may be considering in other parts of the world.
“It is an attractive opportunity to put capital into.” To quell uncertainty, the bridge over uncertainty, between investors and the local market is a local content policy. “Because then you have – as investors, operators, contractors – an understanding of what the rules of the game will be. So then you know this section is going to be carved up for locals or the tendering process is going to be this way… So when I look at contracts, I know that contract execution and contract management must go along with these roles and methodologies.Risk is not just a statistic. It’s not just about variation. It’s perception. And we must be able to mitigate risk by putting certainty into place.” The oil sector is not just going to be useful to Guyana through the revenues it will earn the country, but through the stimulation of an upward surge in the standards of services and products that indigenous companies provide. “I think that what the oil industry will do for Guyana, not money-wise but standards-wise, will kick off a new round of industrialization in Guyanese businesses and make us internationally competitiv.,” With just the right ingredients, Guyana has the opportunity to make strong, fruitful partnerships with foreign investors. The Energy Department is preparing the final Local Content Policy. The Chamber and other commentators submitted contributions for improvements to one that gives locals quality participation in the Petroleum sector. The Energy Department hopes to complete the policy with First Oil.
Go-Invest
THE growing interest in Guyana is clear after GIPEX, which saw the participation of 250 companies from around the world.
GIPEX, from November 20 to 22, attracted a number of foreign investors, who enquired about the possibilities of investing in Guyana.
“Foreign investors are eager to set up businesses in Guyana,” said the Chief Executive Officer of the Guyana Office for Investment on the final day of GIPEX. He met potential investors at the summit, some of whom signalled a solid interest in returning to invest and form partnerships.
“We had about 19 different meetings in the last three days with different types of businesses…the majority ..were extremely positive about their experience at this event.”
Most companies were from North America and the Caribbean and for some it was not their first time in Guyana. The investors’ interest was in the oil and gas sector but was not specific to exploration. They want to offer services to support that type of activity (exploration) and are interested in forming partnerships with locals. Those foreign investors signalled their interest when Guyana has seen a rapid growth in foreign interests and Foreign Direct Investments (FDI) since 2015. FDI is expected to grow further, reaching a record US$1.2 billion by the end of this year.
The Economic Commission for Latin America (ECLAC) reported FDI flows to Latin America and the Caribbean contracted for the third year in a row in 2017, to US$161.6 billion, a decline of 3.6 per cent relative to 2016 and 20 per cent less than in 2011. Guyana’s FDI flows recorded a positive, upward trend.
The Minister of Finance had said , from a low of US$58 million, in 2016, FDI flows almost quadrupled, in 2017, to US$212 million. These flows have continued this trend, rising to US$826.4 million by the first half of 2019, compared to US$514.8 million for the similar period in 2018.
“Expectedly, FDI flows have concentrated on the extractive sector, in particular gold and bauxite mining and latterly, petroleum exploration. However, as the ECLAC report noted, FDI grew in all sectors, except in manufacturing.”
In keeping with the policy to diversify the economic base in order to avoid heavy dependence on the oil and gas sector, the Government, through an attractive mix of policies and reforms, is positioning the country to take advantage of international interest in the oil reserves, in order to promote other sectors, such as agriculture and tourism. As the economy evolves, Guyana will continue to make every effort to facilitate foreign investments across the potential economic sectors in the country.
STOP PRESS – Exxon found not guilty in New York climate change case, ending 4-year saga for oil company
Exxon did not mislead shareholders over the true cost of climate change, New York Supreme Court Justice Barry Ostrager ruled on Tuesday, ending the company’s multi-year battle against New York Attorney General Letitia James.
“The Office of the Attorney General failed to prove, by a preponderance of the evidence, that ExxonMobil made any material misstatements or omissions about its practices and procedures that misled any reasonable investor,” Ostrager wrote in his ruling.
“The office of the Attorney General produced no testimony from any investor who claimed to have been misled by any disclosure, even though the Office of the Attorney General had previously represented it would call such individuals as trial witnesses,” he added.
The $1.6 billion suit brought by New York Attorney General Letitia James alleged that Exxon deceived investors about the true cost of climate change. The trial, which began in October and was the first climate fraud suit to go to trial, was the result of a four-year investigation.
“Today’s ruling affirms the position ExxonMobil has held throughout the New York Attorney General’s baseless investigation,” Exxon spokesperson Casey Norton said in a statement. “We provided our investors with accurate information on the risks of climate change. The court agreed that the Attorney General failed to make a case, even with the extremely low threshold of the Martin Act in its favor,” he added.
The case centered on how Exxon, the United States’ largest oil company, accounted for the future potential cost of climate change. New York’s case accused the company of misrepresenting these costs, with AG James arguing that the company used one set of numbers publicly, while operating with a less conservative forecast internally.
When he took the stand on Oct. 30, former Exxon CEO Rex Tillerson said that the company tried to understand the impact of climate change, and tried to accurately communicate this impact to shareholders. Exxon said the case was misleading and politically motivated, and the result of a coordinated effort by anti-fossil fuel groups.
“Lawsuits that waste millions of dollars of taxpayer money do nothing to advance meaningful actions that reduce the risks of climate change. ExxonMobil will continue to invest in researching breakthrough technologies to reduce emissions while meeting society’s growing demand for energy,” Norton added.
The Attorney General’s office did not respond to a request for comment.
In 2015, then-New York Attorney General Eric Schneiderman first announced his investigation of the company. At that point, the charge was broader, claiming that the company knew about the impact of carbon emissions on climate change for decades, but covered it up.
In the years since, the case narrowed in scope. Ultimately, it was under New York’s Martin Act — a 1921 law meant to protect investors from false statements from corporations, even if the company wasn’t intentionally trying to be deceptive.
“This is a case about the disclosures ExxonMobil made about its use of a cost of carbon to hedge against the risk of more exacting regulations and what a reasonable investor would have understood those disclosures to mean,” the October 7 pretrial memo read. “By representing that it was applying higher projected carbon costs than it was actually using, ExxonMobil made its assets appear significantly more secure than they really were, which had a material impact on its share price. In so doing, ExxonMobil defrauded its investors under the Martin Act.”
– CNBC’s Rahel Solomon and Patrick Manning contributed
The Judgement :-
In his ruling, New York Justice Barry Ostrager wrote,
“What the evidence at trial revealed is that ExxonMobil executives and employees were uniformly committed to rigorously discharging their duties in the most comprehensive and meticulous manner possible….The testimony of these witnesses demonstrated that ExxonMobil has a culture of disciplined analysis, planning, accounting, and reporting.”
Exxon’s response:-
https://news.exxonmobil.com/
For the full ruling see
https://corporate.exxonmobil.