McDermott starts topsides work on ExxonMobil’s latest FPSO

10 out of the total 23 modules for the One Guyana FPSO are set for completion

13 October 2022
By Xu Yihe in Singapore

The Qingdao McDermott Wuchuan (QMW) joint venture between McDermott and China State Shipbuilding Corporation (CSSC) has started fabricating topside modules for a newbuild floating production, storage and offloading vessel destined for ExxonMobil’s Yellowtail field development offshore Guyana.

The construction start-up confirms a recent report that QMW is one of two yards the lead contractor SBM Offshore selected for building topsides modules for the Yellowtail One Guyana FPSO.

The other yard sharing the topsides spoils is Singapore’s Dyna-Mac.

Contract for a 0.686-Megawatt Solar Farm at Mahdia

October 12, 2022

Over 2,884 residents will benefit from a more reliable and efficient supply of electricity with construction of a new 686kWp Turn-key Solar farm in the Mahdia community. The Solar Farm would be constructed on 1.7 Acres of Land which will be secured by 2 meters high perimeter fencing along with solar-powered perimeter lighting. The facility would have two (2) security huts equipped with the necessary lighting and lavatory compartments.

Electricity for this community is currently being produced and sold to the residents by Mahdia Power and Light Inc. (MPL) from a 1.5MW Diesel Generation Power Plant; however approx. 67% of the MPL’s expenditure is directed to the purchase of fuel which is transported from Georgetown some 200km away.

Design, supply and installation of the Turn-Key Solar PV system and its interconnection to Mahdia grid would be done in compliance with the NEC & National Grid Code,  in addition to the adherence to all quality assurances, environmental standards and social regulations.

The Solar Farm would be constructed into two (2) identical subsystems with each faction having a capacity of 343.2kWp of PV Power connected to 375kW of Grid-Power Inverters, and a Storage Capacity 750kWh Lithium Battery Bank connected to 400kW of Grid Forming Hybrid Inverters which will support Off-Grid operations and Cloud-Coverage. In addition to offsetting 30-65% or more of the annual electricity to the Mahdia mini-grid; the Solar Farm would have the capacity to supply electricity to the community in excess of 2-hours daily without the operation of Diesel Generators.

At a total PV Capacity of 686.4kWp, Storage of 1500kWh and an average peak area load of 375kW, it is anticipated that about 25% fuel saving is likely in the first 5-7 years of operation. A comprehensive SCADA System would be implemented for reporting and providing remote monitoring. On completion of the construction of the Turn-key Solar Farm technical training will be provide to MPL Inc. along with the appropriate factory warranties and service tools/spares parts.

 

Modec closing in on breakthrough floater contract

It’s ‘now or never’ for Japanese floater giant to fulfil its hopes of breaking into the Guyana market, sources reckon

13 October 2022
By Gareth Chetwynd in Rio de Janeiro

Japanese floater giant Modec is inching closer to a first major contract award from the ExxonMobil-led consortium in charge of developing at least 11 billion barrels of oil equivalent on the Stabroek block offshore .

ExxonMobil has so far put two floating production, storage and offloading vessels into operation on Stabroek, with more on the way and is fast-tracking plans to take this to six by 2027, when crude-processing capacity is expected to pass the 1 million barrels per day mark.

Spill

13 october

Esso Exploration and Production Guyana Limited (EEPGL) a subsidiary of ExxonMobil and the operator of the Stabroek Block in reporting the incident to the press on September 10 explained that a team on the Liza Unity Floating Production Storage and Offloading (FPSO) vessel observed a sheen on the water in the vicinity of the vessel on September 9, last.

According to the oil company, initial investigations indicate that about one barrel of crude was released during a maintenance activity on the vessel.

Further, the activity was immediately halted and the leak was cut off. The oil company said, “Additional surveillance by helicopter confirmed that there was no sheen in the area; only a light sheen was perceptible approximately 20 km (13 miles) North West of the vessel. By midday on September 10, a support vessel in the area confirmed no further sign of a sheen.” The ExxonMobil affiliate said there were no pictures of the spill.

Guyana is yet to secure full liability coverage, as mandated by the Environmental Permits, for the ongoing offshore oil operations. Instead, the oil company assured that there is US$600 million that has been put aside by the Stabroek Block operators to cover oil spills per disaster in the rich Stabroek Block, where presently production has surpassed 300,000 barrels per day. In addition a US$2 billion parent company guarantee is being negotiated.

This means, however, that the immediate clean up finances could only amount to US$2.6 billion, meaning Guyana could be left to foot the additional charges that may be associated with an oil spill.

Ditching pipeline can save US$1B

Oct 12, 2022

…movement of excess gas by containerized shipping to available markets reduces onshore hazards

ExxonMobil is pursuing a US$1.3 billion natural gas pipeline, with the support from the Government.    Total investment in the Gas-to-Energy (GTE) project rose from US$478 million to around US$2 billion.

This project entails three major aspects- the pipeline to transport the gas to Wales, the Natural Gas Liquids (NGL) facility that will treat and separate the gas, and the power plant to generate the electricity. The pipeline will cost around US$1.3 billion, expected to increase when Exxon closes critical contracts.

While the natural gas pipeline may no longer be feasible, the Government has options. It can use models from other countries that transport natural gas to shore and even to third parties, using containerized shipping (ISO Containers).

This method, is employed in the Gulf of Mexico by a private company to transport gas from Louisiana, USA to an Independent Power Producer in Honduras, Central America, with expected generating capacity of 150 Megawatt in 2022. This compressed natural gas is being shipped by containerized shipping, over a distance exceeding 2,600 km.

From the Floating Production Storage and Offloading (FPSO) vessels to the shore, this strategy could be a more economical option.  This virtual pipeline method of transporting gas has the distinct advantage of cost. It is estimated that the capital cost for this method of transporting gas to shore would be under US$300 million; one quarter of the recent pipeline estimates. In addition to revenues that can be saved by employing this strategy, the environmental harm could be less as the pipeline would have to pass through communities, putting lives at risk in the event of a disaster.

Ugrading the existing power plants across the country, rather than building a new 300-megawatt power plant at Wales would bring more benefits. The gas could be shipped directly to existing GPL generating locations, as the gas can be treated on or alongside the offshore FPSOs.

This could also ensure that all of Guyana gets electricity from the natural gas, rather than only specific Regions. Another huge benefit of the ‘virtual pipeline’ is the ability to economically sell large quantities of gas to nearby countries, which have made clear their critical need for additional gas.

The GTE project will involve capturing associated gas from crude oil production operations on the Liza Phase 1 (Destiny) and Liza Phase 2 (Unity) Floating, Production, Storage, and Offloading (FPSO) vessels, transporting approximately 50 million standard cubic feet per day. The project has a planned life cycle of at least 25 years.

ExxonMobil’s environmental studies stated that the venture can result in chronic hardships for farmer within close proximity to the plant and pipeline, as impacts to agricultural products could extend beyond the construction phase to the operations stage of the facility. The EIA explains that use of land when construction starts and during the operation stage will reduce access to land for agriculture and other purposes. Loss of access to personal properties can result in temporary and/or permanent economic displacement for people who may depend on these lands for their livelihoods, employment, and/or income-generating activities.

The document pointed out that this impact will be relevant to rice fields, north and south of Crane, West Minister/Lust-en-Rust rice fields and pineapple and mixed crops in the northern part of Canal Number Two and the south and northern half of Canal Number One.

Beyond the construction phase, farmers can brace for additional impacts as their overall quality of produce can be reduced. The Project could also result in a change in the quality of agricultural crops harvested from the Primary Study Area. This could result as an indirect effect of dust deposition during the construction stage, which could conceivably extend beyond the project footprint to affect adjacent areas.

The EIA said that construction activities could generate dust through vegetation clearing, earthworks, and movement of equipment and vehicles on unpaved surfaces. Dust emissions from construction areas could be deposited on nearby crops, and could adversely affect crop growth or productivity.

Oil boon for the world amid seeking replacements

On Oct 7, 2022

Guyana offers a good oil source for countries seeking replacements for Russian oil. S&P Global, said Guyana began production at just the right time, when it can offer its resources as the much-needed replacement globally.

Because of invasion of Ukraine, many countries are opting to ban oil imports from Russia . This forms part of sanctions imposed on the Kremlin. The country has been a major oil supplier, however. Importers need to find replacements, be it other oil and gas resources or more renewable energy sources.

Demand for oil and gas resources is high, with the world’s consumption increasing despite calls to limit their use because of the harmful effects on the environment.

“It is very clear that people are serious about the resources in this region for development, not only for local development but for development abroad. It is definitely a boon for the region, but it is also a boon for the world.”

Some countries have already openly expressed their interest in Guyana’s oil.

In April, after talks with Former United Kingdom (UK) Prime Minister Boris Johnson, President Dr. Irfaan Ali said that the European nation is eyeing supplies from Guyana.

“We discussed ways in which there can be greater collaboration between the UK and Guyana in the energy sector and the oil and gas sector. One such thing that we discussed, given what is taking place in Ukraine, (is) UK energy security and he [Johnson] was very much interested in Guyana and what role we can play in this regard.”

India, too, has signalled its interest.

That country has been grappling with some supply challenges due to disruptions stemming from the Ukraine crisis, but India’s External Affairs Minister Subrahmanyam Jaishankar, during his visit to Brazil in August said that Guyana’s oil is part of the solution to its energy woes.

Guyana and other producers in the region must be mindful that they are not merely operating in a local industry with localised consumption. These countries are part of a highly competitive global market.

 

CGX Energy and Frontera Energy announce extensions of previous Loan and JOA Amendment Agreements

03 Oct 2022

CGX Energy and Frontera Energy, joint venture partners in the Petroleum Prospecting License for the Corentyne block offshore Guyana, have announced that the parties have agreed to

(i) extend the maturity date of the previously announced US$19 million convertible loan to CGX dated May 28, 2021, as amended (the ‘Loan Agreement’) to November 30, 2022; and

(ii) amend the previously announced amended Joint Operating Agreement dated July 21, 2022 (the ‘JOA Amendment’) to extend the outside date by which the conditions precedent to such agreement must be fulfilled to November 30, 2022, as the Joint Venture continues to await the satisfaction of all conditions precedent. The parties entered into the JOA Amendment to, amongst other matters, increase Frontera’s participating interest in the Corentyne block in exchange for Frontera providing certain funding.

The transactions described herein between Frontera and CGX are related party transactions under Multilateral Instrument 61-101 but are exempt from the obligations to obtain a formal valuation and approval from a minority of shareholders. Nevertheless, CGX obtained a formal valuation for the Corentyne block in connection with the JOA Amendment, in accordance with TSX Venture Exchange requirements. The material change report filed by CGX in connection with a news release issued on July 22, 2022 contains the required disclosure regarding such exemptions and the formal valuation for the Corentyne block obtained by CGX.

See Frontera Energy’s corporate presentation at: https://www.fronteraenergy.ca/reports-presentations/

 

IMF warns about spending spree while praising positive outlook

September 28, 2022

The IMF said further oil discoveries this year could significantly improve Guyana’s economic prospects over the long-term, particularly because the oilfield discoveries announced by Exxon in April 2022 are not incorporated into projections and Guyana can gain more from them.

While noting the positive outlook of Guyana’s oil and gas sector and the benefits it brings to the economy in the short and medium term, the International Monetary Fund (IMF) has warned the Guyana government that it needs not to go on a spending spree with revenues from the oil and gas sector, since excessive spending could expose the country to the Natural Resource curse.

In its report, the IMF noted that since the start of this year oil revenues coming into the budget will have a significant positive impact on budget financing and debt dynamics.

It noted that oil production is expected to increase by 2025 by more than 300,000 barrels per day compared to the 2019 forecast which will see the government having more money to spend on social programemes like Health, Education and infrastructure as well as gradually paying off the government’s overdraft with the central bank.

“Increased dependence over time on oil revenue could expose the economy to oil price volatility. In addition, excessively rapid increases in government spending from oil revenues could subject Guyana to the “natural resource curse,” with significant inflationary pressures, eroding competitiveness from real exchange rate appreciation, and governance concerns,” the IMF said in its recently released country report on Guyana.

The IMF said further oil discoveries announced this year could significantly improve economic prospects over the long-term, particularly because the oilfield discoveries announced by Exxon in April 2022 are not incorporated into projections and Guyana can gain more from them.

“As in the past, they will be incorporated only when the production agreements with the government are concluded, and investment plans by Exxon management approved. Oil prices, which are currently taken from the latest WEO forecast, may be higher than under current projections if sanctions on Russia intensify” the IMF reported pointed out.

The IMF explained that with real growth projections averaging close to 17 percent a year for several years, the public debt to GDP ratio is projected to fall from 22.8 percent in 2022 to 12.7 percent in 2032.

Veolia contract for seawater treatment

October 04, 2022

Veolia Water Technologies, through its subsidiary VWS Westgarth Ltd, has been awarded a multi-million-dollar contract by the Yellowtail – SBM Offshore/McDermott Joint Venture (YTSM JV) for the supply of a seawater treatment process module for the One Guyana FPSO (Floating Production Storage and Offloading vessel), that will operate in the Stabroek block. The award is for the design, procurement and supply of equipment to process 15,350 m3/h of seawater for cooling, fresh water, and low sulphate water injection.

The nano filtered low sulphate seawater injection is supplied at up to 2,092 m3/h and fresh water supplied from seawater reverse osmosis (SWRO) at 350 m3/h.   The seawater system is provided as a single, fully integrated process module comprising coarse filtration, UltraMEV108 ultrafiltration pretreatment, sulphate removal membrane process, SWRO membrane process, membrane Clean-In-Place unit, vacuum deaerator unit, water injection booster pumps with system piping, valves, and instrumentation.

Low sulphate seawater is injected into the oil bearing reservoir to maintain pressure and improve secondary recovery, this helping to ensure that the oil production is achieved as efficiently as possible, and minimizing the operations carbon footprint.

This will be Veolia’s fourteenth Sulphate Removal Process (SRP) technology project with SBM Offshore, and our third for Stabroek Block, the One Guyana project building on the successful SRP process modules design, supply, and operations support services provided for the Liza Unity and Liza Prosperity FPSOs.

“We thank the Yellowtail SBM Offshore/McDermott Joint Venture for again showing their faith in our expertise to design and supply this specialist technology. Our experienced project team is fully committed to playing our part to help to ensure the success of the project,” said Stephen Hill, Project Manager for VWS Westgarth Ltd.

 

 

US$12M for skills development, employability

Oct 04, 2022

– bids open for supply of tools for six practical centres

The Government received funding from the Caribbean Development Bank (CDB) totalling US$12, 252,000 to roll out the Guyana Skills Development and Employability project. The initiative will see practical instruction centres across the country being boosted to deliver Technical Vocational Education and Training (TVET) programmes. The Ministry of Education tendered the supply of tools and equipment for six (6) practical instruction centres in 10 lots.

These include; home keeping, masonry and steel fixing, motor vehicle repairs, plumbing, welding and fabrication, commercial food preparation, graphic design, garment making and furniture making. According to the bid document, consideration will be limited to firms or joint ventures of firms which are legally incorporated or otherwise organised in, and have their principal place of business in an eligible country.

The firm must be more than 50 per cent beneficially-owned by a citizen or citizens and/or bona fide resident or residents of an eligible country, or by a body corporate, owned or controlled by the government of an eligible country, provided that it is legally and financially autonomous and operated under the commercial law of an eligible country and otherwise meets the eligibility requirements of the CDB Guidelines for Procurement (2006). The bidding document is obtainable at no cost to the prospective bidders. Hard copies of bids must be submitted in sealed envelopes no later than Tuesday, October 11, 2022, to the National Procurement and Tender Administration Board, Main and Urquhart Streets, Kingston, Georgetown. (DPI).

 

 

Guyana Basins Summit 2022

Guyana at critical juncture must channel revenues into health, education, renewables

Oct 05, 2022

Industry experts and potential investment partners participating in the three-day Guyana Basins Summit (GBS) all agree that the country’s success with its petro-dollars lies in the strengthening of its health, education, and infrastructure industries as well as its human capital. There was also unanimous agreement that Guyana must invest in renewables such as solar power so that its efforts towards diversification can be achieved.

Specifically underscoring these key points during the opening of the summit were Canadian High Commissioner to Guyana, Mark Berman;   Gerry Gouveia Jr., Senior Vice President at the Georgetown Chamber of Commerce and Industry; Professor Paloma Mohamed Martin, Vice Chancellor at the University of Guyana; Angus Young, Regional Head of Investment Banking and New Markets at NCB Capital Markets Limited; and Lorena Salazar, Chief of Operations and Guyana Country Representative at the Inter- American Development Bank (IDB).

The stakeholders were at the time, participating in a panel discussion that focused on ensuring local prosperity and sustainability through robust strategic and investment partnerships. This discussion was moderated by Chris Chapwanya, Chief Executive Officer at Sagacity (and) OilNOW.

High Commissioner Berman noted that he has been in Guyana for 20 months and based on his observations, the country is on a transformational trajectory. The envoy was keen to note that Guyana and Canada have a long relationship, adding that Canada has been the largest source of exports prior to the oil and gas sector.

“So we have a strong people link. We also have a commercial footprint that continues to grow.”

The High Commissioner said Guyana has a significant opportunity to tap its renewable resources such as solar and wind. While this is critical, the envoy said it is recognized that the world cannot switch off the use of oil and gas, as these resources would be needed well into the future. This multi-pronged approach is outlined in the nation’s Low Carbon Development Strategy (LCDS) 2030.

Professor Mohamed Martin was keen to note the importance of upskilling the Guyanese populace as well as the role of the University of Guyana, a 60-year-old institution, addressing this state of affairs.

The Professor said UG produces about 3000 graduates but the country needs about 15,000 to meet its needs. “So we need to scale up significantly and look for partners and opportunities.”

Professor Mohamed Martin also spoke about the importance of tapping the Diaspora to meet the country’s labour and skills demand. While the University is not moving as fast as it ought to, Professor Mohamed Martin said a lot of progress is still being made. She said the institution has already introduced 21 new programmes but will catch up in about two year’s time.

Angus Young, during his perspective stressed that NCB is no stranger to Guyana, adding that the company has extended significant credit to the Guyana Sugar Corporation (GuySuCo), and closed a multi-billion dollar loan with a major shore base facility.

“What is happening in Guyana, the exponentiality requires non-traditional strategies. This means we need to see the development of domestic capital markets in Guyana to ensure Guyanese are able to get more access to financing and develop and make meaningful contributions in oil and other sectors,” the Regional Head said.

Lorena Salazar, Chief of Operations and Guyana Country Representative at the Inter-American Development Bank (IDB) during her presentation stressed the need to have oil and gas used to accelerate social and economic targets to ensure widespread growth. IDB had been a trusted partner of Guyana for 45 years and since her appointment in 2018, there has been a remarkable evolution of opportunities for prosperity in Guyana.

The IDB official said, “Guyana is making a good decision with moving to diversification. The country has signed a major agreement with the government of Guyana to fund eight solar projects across the country. We are interested in seeing how we can support the government not just in oil and gas but with the other industries…”

It is important for Guyana to not be preoccupied with oil and gas and the revenues to come but to also consider careful investments in its future.

“The future of the country is the people of the country. So Guyana needs to consider what are the skill-sets that will be needed in the future. Guyana also needs to tap the best people to help develop the resources in a responsible way and ensure that the opportunities for prosperity move beyond the coast, that it touches the Indigenous communities. We must leave no one behind…”

 

 

Brassington misses panel on Gas-to-Energy

Oct 06, 2022

Head of the controversial Gas-to-Energy (GTE) project, Winston Brassington was a no-show yesterday for a panel discussion at the Guyana Basins Summit (GBS), in Georgetown.

Brassington was expected to be part of a discussion on the US$2 billion project that included a question and answer segment. He was expected to be the lone local representative; however, the investors who came to Guyana for the seminar were forced to speak to other foreigners in his absence.

ExxonMobil’s GTE Project Manager, Friedrich Krispin chaired the session, while the two panelists; Nicholas Sicard, Area Director for Guyana, Suriname and Trinidad at Technip FMC and Michael Gow, Guyana and Suriname Country Manager for Subsea 7- took on questions from a diverse audience. Both Technip FMC and Subsea 7 are sub-contractors of Exxon that have been contracted to work on the natural gas pipeline that will connect to two Floating Production Storage and Offloading (FPSO) Vessels in the Stabroek Block, which will make landfall at Crane and end at the Wales industrial site.

Brazilians, Venezuelans, Trinidadians and representatives from other countries stood up to question various aspects of the pipeline to be built by ExxonMobil. As it regards the Natural Gas Liquids (NGL) facility and Power plant aspect, to be developed by the Guyana Government, stakeholders were turned away with no answers.

At least two of the questions directed to the panel were turned down owing the Brassington’s absence. One gentleman questioned how government would make money from the project given its significant price tag, while the other question regarding market or use for the excess gas was left unanswered.

Brassington was recently asked about the project’s feasibility while at a meeting hosted in Region Three with residents that will be affected by the pipeline. He said he was not taking questions and that queries should be directed to the Minister of Natural Resources, Vickram Bharrat who was present that day. Bharrat heard the first question and requested that enquiries be limited to the subject of that meeting. Since the project was conceived, government has not hosted a press conference to allay the fears of the public.

The gas-to-energy project will encompass three major aspects: the pipeline to transport the gas to Wales; the NGL facility that will treat and separate the gas and the power plant to generate the electricity. So far, Guyanese have been told that the pipeline aspect, which is being pursued by US oil major, ExxonMobil, will cost around US$1.3 billion. Even this is expected to increase when Exxon closes critical contracts for same.

Vice President Bharrat Jagdeo anticipates the other two facilities to cost an additional US$700 million, bringing the expected project cost to around US$2 billion. This project alone costs more than half of the country’s total debt presently, yet there has been no updated feasibility study that proves its viability. Government hopes to reduce electricity costs by 50 percent when the GTE project comes on stream.

 

 

‘Guyana one oil spill away from losing profits to another disaster’

Oct 06, 2022

– 6 lawsuits, weak policies point to questionable management of sector

The World Bank’s recent findings on handling of the oil and gas sector and the fact that some six lawsuits have been filed against the state to force it to adequately protect the environment against possible oil spill damage are all indicators of “weak policy and highly questionable management” of the petroleum sector, Institute for Energy Economics and Financial Analysis (IEEFA) has said.

The international agency which monitors and assesses energy markets, trends, and policies, indicated in its most recent writing on Guyana’s petroleum sector, that the fight to protect the environment from oil spill damage is ramping up as the government failed to release the details of the ExxonMobil / Esso Exploration and Production Guyana Limited (EEPGL) insurance policy, while a recent oil spill at the Liza 2 project made the potential danger even more realistic.

IEEFA reminded the 2016 Production Sharing contract governing the exploration and development of the resource has several provisions benefiting the consortium to the detriment of Guyana. “The latest litigation exposes one of the loopholes. Weak contract terms provide vague protections. And the failure by environmental authorities to enforce even vague protections means Guyana is just one substantial oil spill away from turning its expected windfall into another global disaster.”

“This issue goes beyond Guyana’s borders as oil slicks do not respect geographical boundaries,” IEEFA warned. It said that Payara’s environmental impact assessment shows the project’s potential to damage not only Guyana, but also Trinidad, Tobago, Barbados, Grenada, Bonaire, Aruba, Curaçao, Colombia, the Dominican Republic and Venezuela. “Oil on the beaches is not good for tourism and fishing, two industries that sustain regional economies,” IEEFA urged.

President of the Transparency Institute of Guyana Inc (TIGI) Fredericks Collins and another Guyanese citizen, Godfrey Whyte, moved to the High Court less than three weeks ago to get the Environmental Protection Agency (EPA) to enforce the liability clause in the permits issued to ExxonMobil Guyana and partners. The lawsuit, IEEFA pointed out the terms and conditions expected of insurance coverage and sanctions if its provisions are not carried out.

The questions raised in the litigation include therefore, whether Guyana EPA obtained the insurance policy from Exxon and partners, whether EPA ensured ExxonMobil’s commitment to cover the total costs of restoration, cleanup and damage from a spill or well blowout or whether the terms and conditions that are in the insurance coverage comport with the permit, contract and statutes. It also questions whether the companies involved have the resources necessary to cover the costs of a significant spill, which corporate entities are responsible for those costs and how much of the costs are covered by the actual permit agreements. The lawsuit is also demanding that the EPA cancel the permit if the offshore operator does not provide the insurance, guarantees and indemnities required.

IEEFA noted the plaintiff, Frederick Collins’ concern based on former EPA head Dr. Vincent Adam’s utterances that the insurance compliance provisions are being violated and that the EPA had not obtained guarantees that ExxonMobil would cover the full costs of a cleanup. “The plaintiff said Guyana authorities have refused to provide copies of the existing insurance policies that would show the unlimited liability guarantee provided in the permit.”

Based on its observations, IEEFA said that stakeholder’s concerns were amplified by ExxonMobil’s recent disclosure of an oil spill at the Liza 2 site. The conditions surrounding the discharge and the details of the cleanup were not known when the latest case was filed, and at the same time, the former EPA director had said that ExxonMobil is currently pumping on Liza One at a rate of 150,000 barrels per day, 50 percent more than the permitted rate.

“The overproduction, if corroborated, has implications for safety and health risks at the site, as well as increasing the chances of a major failure such as a well blowout or spill. Esso has already acknowledged using a faulty gas compressor that has resulted in gas flaring beyond permitted levels.”

IEEFA said that the concerns raised about the potential for an oil spill are not academic, and that “the 2010 Deepwater Horizon disaster in the Gulf of Mexico should remind Guyana officials of the need to act with dispatch to protect the public.”

IEEFA lamented that the BP spill devastated marine life and livelihoods. Although most local economies affected by the BP spill were able to rebound with the benefit of diverse economic bases, the agency warned that, “a country like Barbados—with 22 percent of its economy linked to tourism—faces particularly high economic risks. Neighbouring countries should pay close attention to the lawsuit.”

IEEFA pointed out that out of the six environmental court cases filed so far, four related to government’s failure to properly manage the permit process and enforcement of permit provisions. In one case, the agency said that the courts found that Guyana officials broke the law by improperly granting ExxonMobil a 23-year permit when permits are legally restricted to be five years. The effort by Guyana officials to cut corners and hasten production was overturned by the court.

IEEFA noted that the World Bank review of efforts to reform the programme and bring administrative capacity in line with oil development operations found that Guyana’s management ability is slipping. “The World Bank findings and the six lawsuits point to a weak policy and highly questionable management. The questions raised by the latest litigation and the lawsuits that have preceded it do not bode well for the people of Guyana,” the agency said.

The recent lawsuit is the sixth filed over the massive drilling project, is an attempt to ensure that the consortium—ExxonMobil, Hess Corp., and the China National Offshore Oil Corp. (CNOOC)—would be responsible for the costs of an oil spill and not foist responsibility to Guyana taxpayers. Economist Ramon Gaskin, University of Guyana research director, Dr. Troy Thomas, Rights activist Sherlina Nageer and Vanda Radzik are a few of the plaintiffs in other cases.

 

 

Building capacity for agencies in the oil and gas sector

October 4, 2022

Guyanese can be assured of effective management of the oil and gas industry as the Natural Resources Ministry continues to intensify capacity building for agencies in collaboration with Halliburton – a United States oil and gas service provider.

Natural Resources Minister, Vickram Bharrat attended the final training session for staff of the Guyana Geology and Mines Commission (GGMC) on Geo Science Software- Decision Space Geoscience (DSG1) on Tuesday and delivered remarks.Natural Resources Minister, Vickram Bharrat and Permanent Secretary Joslyn Mckenzie along with participants of the training session

The Minister stressed the importance of the capacity building as Guyana is a new player in the oil and gas sector.

“What we promised is to ensure that we build out the framework or the architecture to manage the oil and gas sector and this is what we’re working towards and that is why we appreciate the support from Halliburton and other companies who are partnering with us, especially with regards to capacity building,” Minister Bharrat stated.

With funding from the World Bank, the ministry obtained the Guyana Petroleum Resources Governance and Management Project (GPRGMP), a key software for the oil and gas sector.

The project aims to work along with relevant oil and gas agencies including the Ministry, Environmental Protection Agency (EPA), Maritime Administration Department (MARAD), GGMC, and Guyana Revenue Authority (GRA) to enhance capacity.

Permanent Secretary, Joslyn Mckenzie noted that the final training sessions mark a key milestone as it relates to the capacity-building activities.

He said that, “today’s activity is being held here but primarily the GGMC are the primary recipients of this […] They’ll be the entity that will essentially transform into the Petroleum Commission so we actually building a bit of the block.”

The series of training forms part of the government’s overall effort to enhance technical skills and specialisation in the expanding oil and gas sector.

Halliburton’s Landmark Software for Drilling and Geoscience disciplines has been acquired to enhance the technical work of the government with regards to effectively supporting contract management activities and policies, and will include aspects of capacity building and training using Guyana’s data to support the oil and gas industry.

The GGMC teams were exposed to several training activities on the Halliburton Landmark Software for Drilling and Geoscience disciplines over the last month.