Exxon to Acquire 3 of 5 FPSOs Leased from SBM Offshore

Jov Onsat|Rigzone, November 19, 2024

Exxon is exercising its option to buy Liza Destiny, after already acquiring Unity and Prosperity – three of the five production vessels it has contracted from SBM Offshore for Guyana.

Owner SBM Offshore NV said Exxon Mobil Corp. will assume ownership of floating production, storage and offloading (FPSO) vessel Liza Destiny by next month, Liza Destiny is one of five FPSOs that the US oil giant contracted from the Dutch ocean engineering and construction company for deployment in Guyana, where ExxonMobil holds a 45 percent operating stake in the Stabroek block. Four FPSOs were contracted last year: Liza Destiny, One Guyana, Prosperity and Unity. One was contracted this year, called Jaguar.

Under last year’s contract agreement, ExxonMobil will acquire the four vessels after the lapse of their contract durations but has the option to make the purchase earlier. So far ExxonMobil has acquired two of the four, FPSO Unity last year and FPSO Prosperity last month. In its quarterly report, SBM Offshore said.

“Following the purchase of FPSO Prosperity, ExxonMobil Guyana Ltd has informed the Company that it will also exercise its right to purchase FPSO Liza Destiny by year-end 2024.  This is ahead of the end of the maximum lease term which would have expired in December 2029”.

For One Guyana, which has yet to be deployed, SBM Offshore said “The integration and onshore commissioning activities are progressing in line with plan, including the successful completion of the power plant commissioning. First oil is expected in the second half of 2025”.

Earlier this year ExxonMobil tapped SBM Offshore to build FPSO Jaguar. On April 12, 2024, referring to the four-FPSO agreement that it announced May 2, 2023, SBM Offshore said,

“Ownership will transfer to EMGL [ExxonMobil Guyana Ltd.] prior to the FPSO’s installation in Guyana, and SBM Offshore expects to operate the FPSO for 10 years under the Operations and Maintenance Enabling Agreement signed in 2023.”

Jaguar will serve Whiptail, the sixth development in Stabroek, expected to raise Guyana’s oil production to 1.3 million barrels per day. The owners target to put the $12.7 billion Whiptail project onstream 2027, according to ExxonMobil’s announcement of the final investment decision April 12.

SBM Offshore said it had won a contract along with fellow Dutch company Technip Energies NV to build an FPSO for TotalEnergies SE’s GranMorgu field in Suriname.

“SBM Offshore is expected to operate the unit under an operations and maintenance agreement. The FPSO will be the first large deepwater project development in Suriname with an expected production capacity of up to 220,000 barrels of oil per day and associated gas treatment capacity of up to 500 million cubic feet per day”.

It will have a storage capacity of two million barrels of crude oil. Production is expected to start 2028. Thanks to the joint expertise of Technip Energies and SBM Offshore, this all-electric drive FPSO will also be designed to eliminate routine flaring, in line with TotalEnergies objectives and SBM Offshore’s goal to deliver carbon efficient units”.

For the third quarter, SBM Offshore logged $2.84 billion in “directional revenue”, up 26 percent compared to the same three-month period last year.

SBM Offshore’s directional lease-and-operate revenue grew 28 percent year-on-year to $1.8 billion partly thanks to acquisition and divestment transactions in Angola, offset by “lower revenue generation from FPSO Liza Unity following the sale of the vessel in 4Q 2023 with a contribution coming solely now under the Operations and Maintenance Enabling Agreement”.

Directional turnkey revenue rose 24 percent year-on-year to $1.04 billion, “mainly driven by the contract award for FPSO Jaguar and higher support to the fleet through brownfield activities, partly offset by a comparatively lower amount of revenue booked in the construction portfolio as projects approach completion”, SBM Offshore said.

Directional net debt increased by $603 million to $7.26 billion, “driven by drawings under the project finance facilities, which reflects the continued investment in the construction program of 4 FPSOs”.

However, SBM Offshore said proceeds from the sale of Liza Destiny “will be applied to full repayment of the US$405 million outstanding project financing and as such together with the repayment of the US$979 million outstanding financing for FPSO Prosperity will decrease SBM Offshore’s net debt position”.

As a result of the sale of Prosperity and Liza Destiny, SBM Offshore increased its projected directional revenue for 2024 to over $6 billion, of which $3.7 billion is expected to come from its turnkey segment and $2.3 billion from the lease-and-operate segment. EBITDA guidance has been increased to about $1.9 billion.

SBM Offshore completed over half its current share buyback program of around $140 million.

To contact the author, email jov.onsat@rigzone.com

 

 

 

 

ExxonMobil Guyana, SBM Offshore complete purchase of FPSO Prosperity

November 07, 2024

SBM Offshore and ExxonMobil Guyana Ltd, an affiliate of Exxon Mobil Corporation, completed the transaction related to the purchase of FPSO Prosperity, ahead of the maximum lease term, which would have expired in November 2025. The purchase allows ExxonMobil Guyana to assume ownership of the unit while SBM Offshore will continue to operate and maintain the FPSO up to 2033.

The transaction comprises a total cash consideration of c. US $1.23 billion. The net cash proceeds will primarily be used for the full repayment of the US $0.98 billion project financing and as such will decrease SBM Offshore’s net debt position.

The FPSO Prosperity has been on hire since November 2023 and will continue to be operated through the integrated operations and maintenance model combining SBM Offshore and ExxonMobil’s expertise and experience delivering outstanding operational performance. The impact of the transaction will be included in the update of the SBM’s 2024 guidance as part of the Third Quarter 2024 Trading Update, scheduled for November 14, 2024.

 

 

 

 

 

ExxonMobil Guyana acquires FPSO from SBM Offshore for $1.23 billion

GEORGETOWN, November 8, 2024

ExxonMobil Guyana acquired the Prosperity FPSO vessel from SBM Offshore in a deal valued at USD 1.23 billion, the Dutch offshore facilities player announced. The Prosperity has been on hire to the US energy giant since November 2023 and was set to reach its maximum lease term in November of next year.

While ExxonMobil Guyana will assume ownership of the vessel, SBM Offshore will continue to operate and maintain it up to 2033. The Prosperity has been drilling in the prolific Stabroek block at ExxonMobil’s Payara discovery. The US company made a game-changing discovery in the block in 2015, which, with over 40 subsequent discoveries, transformed Guyana into a global oil and gas hotspot. SBM Offshore designs, builds, installs and operates offshore floating facilities for the offshore energy industry.

 

 

 

 

 

ONE GUYANA FPSO to arrive mid-2025 for Yellowtail

November 16, 2024

At the Jaguar FPSO steel strike ceremony hosted by Guyana Shore Base Incorporated (GYSBI) in Houston, East Bank Demerara, ExxonMobil Guyana President, Alistair Routledge, announced ‘ONE GUYANA’ Floating Production Storage and Offloading (FPSO) vessel is expected to arrive in Guyana during the second quarter of 2025. The vessel, part of ExxonMobil’s Yellowtail development project within the Stabroek Block, is currently dry docked at the Keppel yard in Singapore. Routledge disclosed,

“We’re anticipating going to Singapore in January for the naming ceremony and the christening of the vessel before it sets sail from Singapore. That vessel will set sail for Guyana and arrive here in the second quarter of next year where it will be installed, commissioned and made ready for startup later in the year.”

The vessel design is based on SBM Offshore’s industry leading Fast4Ward® programme that incorporates the company’s new build, multi-purpose floater hull combined with several standardised topsides modules.

The FPSO will be designed to produce 250,000 barrels of oil per day and will have associated gas treatment capacity of 450 million cubic feet per day and a water injection capacity of 300,000 barrels per day.   The FPSO will be spread-moored in water depth of about 1,800 metres and will be able to store around two million barrels of crude oil.

ExxonMobil will take ownership of the FPSO upon completion. The vessel will be part of the Yellowtail development project, which includes six drill centres and up to 51 wells.

In March 2023, SBM hosted the Steel Strike Ceremony at Industrial Fabrications Incorporation (InFab) on the East Coast of Demerara, to signal the commencement of work by the companies—InFab, Guyana Oil and Gas Support Services Incorporated (GOGSSI) and Zeco Group of Services.

With nearly $55 billion earmarked to develop six government-sanctioned projects, the estimated investment for the ‘ONE GUYANA’ FPSO is approximately $10 billion. ExxonMobil Guyana Limited continues to exceed expectations in oil production. With current daily output of 650,000 barrels of oil, the company surpassed its initial targets.

Operations are spread across three FPSO facilities – Liza Destiny, Liza Unity, and Prosperity – all of which are operating beyond their nameplate capacities. The ‘ONE GUYANA’ vessel will bolster these production numbers.

Recently, output hit the 500 million barrels year-end goal, marking a major milestone for Guyana since the start-up in the Stabroek Block five years ago. The consortium aims to expand production capacity to more than 1.3 million barrels per day by 2027, a target achievable as all six projects are expected to be operational by then.

The financial impact of these operations on Guyana is significant. Since the first production in December 2019, oil revenues and royalties totalling over $5.4 billion have flowed into the Guyana Natural Resource Fund.

The industry generated substantial local employment, withover 6,000 Guyanese making up nearly 70% of the workforce on the Stabroek block. ExxonMobil Guyana Limited serves as the operator with a 45% stake in the Stabroek block, while Hess Guyana Exploration Ltd. holds a 30% interest and CNOOC Petroleum Guyana Limited owns the remaining 25%.

 

 

 

 

SBM Offshore bankrolling FPSO Jaguar with $1.5 billion loan

November 22, 2024, by Melisa Čavčić

Netherlands-based SBM Offshore, provider of the design, construction, installation and operation of offshore floating facilities, secured $1.5 billion with a consortium of 16 international financial institutions to cover construction costs for a floating production, storage, and offloading (FPSO) vessel destined for the Stabroek block offshore Guyana, where it will be deployed on a deepwater oil development which ExxonMobil operates.

While confirming the completion of the project financing for the FPSO Jaguar, SBM Offshore explained its expectation to draw the loan in a phased manner over the construction period of the unit, as the loan is perceived to be in line with the duration of the construction phase.

Douglas Wood, CFO of SBM Offshore, commented: “I am proud of our teams which have successfully secured the project financing of FPSO Jaguar, the Company’s first project under the sale and operate model.

“We are demonstrating once again the value of our unique lifecycle offering not only from an execution and operation standpoint but also in our ability to continue to provide material financing solutions for our clients. We appreciate the continued support from the 16 financial institutions.”

After ExxonMobil made a final investment decision (FID) to develop the Whiptail oil development, its sixth project in Stabroek block, the Netherlands-based firm won the front end engineering and design (FEED) work for FPSO Jaguar, which will work on this Guyanese project.

With an expected field life of at least twenty years, the project is scheduled to be online in 2027. SBM Offshore will operate the vessel for ten years under the operations and maintenance enabling agreement signed in 2023. The completion of project financing follows a steel strike ceremony for the FPSO Jaguar at Guyana Shore Base Incorporated (GYSBI) on November 12, kickstarting production of over 300 metric tons of fabricated fixtures for the Stabroek-bound vessel.

The FPSO design is based on SBM Offshore’s Fast4Ward program that incorporates the Dutch player’s seventh new build, multi-purpose floater hull combined with several standardized topsides modules. Designed to produce 250,000 barrels of oil per day, the FPSO will have an associated gas treatment capacity of 540 million cubic feet a day and a water injection capacity of 300,000 barrels per day.

The unit will be spread moored in a water depth of about 1,630 meters and capable of storing around 2 million barrels of crude oil. The Whiptail project will develop the Whiptail, Pinktail, and Tilapia fields, along with potential additional resources, should they be feasible and economically viable. Since the project is situated in a water depth of approximately 2,000 meters, the development concept encompasses drilling operations via drillships to produce oil from around 40 to 65 production and injection wells.

ExxonMobil Guyana, an affiliate of ExxonMobil, is the operator and holds a 45% interest in the Stabroek block, with Hess Guyana Exploration (30%) and CNOOC Petroleum Guyana (25%) as its partners. Since Hess is in the process of merging with Chevron, the latter may become ExxonMobil’s new partner next year.

Hess and Chevron passed the Federal Trade Commission (FTC) antitrust review. However, Hess Chief Executive Officer (CEO) was prohibited from joining the U.S. oil major’s board on the grounds of his previous communications with global competitors such as the OPEC cartel.

 

 

 

 

 

4th oil project in 2025

November 21, 2024

John Hess, the Chief Executive Officer (CEO) of American oil company Hess told the Wolfe Research oil and gas conference, that the US$10 billion Yellowtail Stabroek Block project is “the exciting thing for 2025… and the Floating Production Storage and Offloading (FPSO) for Yellowtail “should be leaving the yard and sailing to Guyana in the first quarter… with the startup then later in the year.”

Hess is a 30% shareholder in the Stabroek Block co-venture. Last month, Alistair Routledge, the President of ExxonMobil Guyana Limited (EMGL) the operator of the block announced that the Yellowtail project – the largest deepwater project to date in Guyana – is on track for the 2025 startup. The third partner is CNOOC Petroleum Guyana Limited, holding 25% interest.

Guyana’s 4th oil project

The fourth project, Yellowtail, will develop the Tilapia and Redtail reservoirs. It targets a daily production rate of 250,000 barrels of oil per day (bpd), while the other developments were designed to produce up to 220,000 bpd.

The first three projects – Liza Phase 1, Liza Phase 2 and Payara are averaging over 650,000 bpd in production. The ExxonMobil-led consortium has plans in place to grow production capacity to more than 1.3 million bpd by the end of 2027, when they anticipate having all six projects up and running offshore.

This will include the addition of the Yellowtail, Uaru and Whiptail projects. Recently, Exxon achieved the milestone of producing 500 million barrels of oil from the block since production began in December 2019.

 

 

 

 

 

Guyana oil output breaking all oil exploration and production records

November 21st 2024

Since January 2024, oil companies offshore Guyana are pumping over 600,000 barrels per day, with developments completed at a scorching pace

The petrostate is emerging as a major international oil producer and exporter. The former British colony is expected to become South America’s top oil producer, a key driver of world petroleum supply growth and one of the fastest growing economies in the region, according to the World Bank and the Inter-American Development Bank.

After decades of poor drilling results, Guyana has rapidly emerged as a significant global petroleum producer following a series of world class discoveries by an Exxon-led consortium in the offshore 6.6 million acre Stabroek Block.

Exxon is the operator holding a 45% working interest with partners Hess and CNOOC controlling 30% and 25%, respectively. Since 2015, Exxon has made over 40 discoveries believed to contain at least 11 billion barrels of oil in Guyana’s territorial waters, adjacent to the Essequibo region disputed by Venezuela.

The first discovery occurred in 2015 with the Liza-1 wildcat well, followed by the January 2017 Payara and Liza Deep discoveries. Liza 3 appraisal well found a 100 to 150-million-.barrel reservoir below the existing Liza oilfield. Stabroek Block contains well over 11 billion barrels of oil reserves, with the acreage possessing the potential to eclipse Brazil’s proven and probable reserves totaling 23 billion barrels, the second largest in South America.

The Liza Phase One project commenced operations in December 2019 with the start-up of the Liza Destiny floating production, storage and offloading (FPSO) vessel which can lift 120,000 barrels per day. During February 2022, the Liza Phase 2 project was completed with the 220,000-barrel Liza Unity FPSO vessel commencing operations. By the end of November 2023, the Payara project was completed, with the 220,000 barrel-per-day Prosperity FPSO starting operations. This expanded the Stabroek Block’s capacity to 560,000 barrels per day. After enhancements, those facilities, since January 2024, have been pumping over 600,000 barrels per day. These developments, completed at a breakneck pace, underscore that the Stabroek Block is a trillion opportunity for Exxon, its partners and Guyana.

In a stunning development, it took a mere four years for Guyana to go from the first defense discovery in 2015 with Exxon’s Liza-1 exploration well, to the first oil in 2019. This is incredible because it usually takes a decade or longer for development of billion-dollar offshore energy projects.

Industry data shows it takes, on average, seven years for an oilfield to reach production, with at least a quarter of projects taking even longer to achieve first oil. Deepwater offshore fields, depths of over 1,200 meters, like those developed in Guyana and Suriname, are among the most difficult and slowest to develop.

In August 2024, Minister of Natural Resources, Vickram Bharrat, announced that Guyana’s oil reserves had grown by 600 million barrels to 11.6 billion barrels. This occurred because of Exxon’s latest oil discoveries in the prolific Stabroek Block.

As a result, the country of less than one million inhabitants now possesses the continent’s third largest oil reserves behind Brazil, which has proven reserves of around 16 billion barrels and Venezuela, with 303 billion barrels, the world’s largest.

This abundance of high-quality discoveries in the Stabroek Block indicates that the petroleum potential of the Guyana- Suriname Basin far exceeds the volumes calculated by the US Geological Survey, USGS. The US agency determined the basin holds up to 33 billion barrels of crude oil, yet recent discoveries point to the true petroleum potential being significantly greater.

As energy investment inflows rise and oil reserves grow, production in the CARICOM country will expand as more discoveries are made and new projects come online. Exxon is developing four projects in the Stabroek Block scheduled for completion between 2024 and 2029.

The first is the multi-billion-dollar 250,000 barrel-per-day Yellowtail development, expected to come online by the end of 2025. This will be followed by the Uaru and Whiptail projects, with both possessing the capacity to lift 250,000 barrels per day, which will start up in 2026 and 2027, respectively. The final facility under construction is the Hammerhead project, which is expected to start lifting petroleum in 2029, adding 180,000 barrels per day to production in the Stabroek Block. Those facilities will add 930,000 barrels per day to Guyana’s oil production, lifting output to around 1.5 million barrels daily by the end of the decade. ( OilPrice and MP).

 

 

 

 

GCCI urged UK Trade Mission to invest in Guyana

Georgetown Chamber of Commerce November 12, 2024

BHC lauds high success rate of UK firms

On November 11, a United Kingdom Trade Mission comprising 20 firms was encouraged to invest in Guyana and partner with local companies. Officials from the British High Commission revealed that at least 50 percent of businesses from past UK Trade Missions successfully engaged in ventures with local businesses or conducted business in Guyana. The Trade Mission was organised through collaboration of the Georgetown Chamber of Commerce and Industry (GCCI), Department of Business and Trade of the British High Commission and the Caribbean Council with the objective of sensitising the delegates about navigating the local business environment.

GCCI President Kester Hutson, advised delegates to partner with local firms, emphasising the benefits of taking this path. “You came at the right time, when Guyana needs you. Our business community is eager to grow and partner and I’m encouraging you to come in with the right attitude to collaborate.”

Culture plays a major role in the growth of businesses and the GCCI is ready to support companies in understanding the business environment.

“Our members are eager to grow with you and support you in any industry or any venture you want to get into.”

Country Director for Trade and Investment, Department for Business and Trade of the British High Commission, Mr. Sherwyn Naughton noted that this Trade Mission is the fourth of its kind and the previous three missions resulted in 30 UK firms operating in the infrastructure, shipping, transport, maritime, food and drink, defence and security sectors visiting Guyana.

Mr. Naughton noted the ongoing Mission includes industries including transport and infrastructure, legal, environmental technology, shipping and logistics, media, shipping and construction. The British High Commission is hoping to replicate the high rate of success previously achieved.

British High Commissioner, H.E Jane Miller OBE told delegates “Welcome to the fastest growing economy in the world. It’s a super exciting country.” She hailed past successes of UK Missions saying, “Those statistics were mind-blowing.”

She highlighted the good relationship between Guyana and the UK and the investment landscape.

“I think the other reason why the trade missions have been so successful is because there are so many opportunities here in every sector.” The opportunities are not just in oil and gas but other sectors including infrastructure and education. “Come and get a local partner,” she urged while outlining the sectors that are ripe for investment.

Regional Director for the Commonwealth Caribbean at Department for Business and Trade, Ms. D’Jamila Ward disclosed that Guyana remains the largest trading partner for the UK and represents about 33.4 percent of the total trade with CARIFORUM members.

On the positive economic growth and investment prospects, she said, “Guyana is really an excellent market for you to come here and set up a base to do business.”

Noting that this is the largest delegation from the UK to date, Managing Director of the Caribbean Council, Mr. Chris Bennet, expressed similar sentiments. “We’re not just focused on oil and gas, we’re focused on the real economy in Guyana and that will always be the case.”

Senior Minister for Finance, Hon. Dr. Ashni Singh provided an overview of the economic sectors and the framework for doing business in Guyana. He drew attention to the Local Content Act which provides 40 niche areas for Guyanese companies in the oil and gas sector.

“We want the people to benefit from what is taking place in Guyana . We also want Guyanese businesses to participate as far as they possibly can.”

Guyana is open for business with everyone on the condition that they respect the laws and do business in accordance with the laws and bring the highest standards of ethics, capability and technology.

 

 

 

 

 

Afreximbank signs US$100M agreement with trader for sale of Guyana’s oil

November 30, 2024

On November 5 African Export-Import Bank (Afreximbank) signed an agreement for a US$100-million Revolving Trade Finance Facility in favour of oil trader JE Energy Limited to support its contract to market Guyana’s share of crude from the Stabroek Block operations.

Two UK companies previously contracted to market Guyana’s share of Stabroek crude won new contracts with the Government of Guyana. JE Energy was contracted as the marketer of oil from the Liza-1 platform and the Liza Destiny Floating Production Storage and Offloading (FPSO).

BB Energy was contracted as the marketer for oil from the Liza-2 and Payara platforms produced by the Liza Unity and Liza Prosperity FPSOs, respectively.

 

 

 

Afreximbank signs US$100M finance agreement with British trading firm to support its contract to market Guyana’s oil

Under the terms of the agreement signed on the sidelines of the African Energy Week, JE Energy Limited, which won contracts to lift and market crude oil from Guyana, shall utilize the two-year facility to finance the purchase and sale of crude oil from Guyana’s Ministry of Natural Resources for onward sale to reputable international offtakers.

Issued in the context of Afreximbank’s drive to grow business opportunities in its member countries in the CARICOM region, the facility is expected to ensure that Guyana is able to trade internationally and to benefit from its natural resources while earning much needed foreign currency.

Signing the agreement on behalf of Afreximbank was Mrs. Helen Brume, Director & Global Head of Project & Asset Based Finance. Mr. Joseph Ilebode, Group Managing Director, signed for JE Energy Limited..

 

 

 

 

 

Afreximbank signs US$100M finance agreement with British trading firm to support its contract to market Guyana’s oil

Ms. Gwen Mwaba – Managing Director, Trade Finance & Correspondent Banking at Afreximbank commented: “Afreximbank is thrilled to support JE energy in their recent contract with the Republic of Guyana to facilitate the export of the country’s crude oil. This partnership not only highlights our commitment to fostering sustainable energy solutions in Africa and beyond but also strengthens regional trade ties. We believe that supporting innovative companies like JE Energy is crucial for unlocking economic potential and driving growth in the energy sector. Together we can contribute to a prosperous future for Guyana and the wider region.”

Mr. Joseph Ilebode, Group Managing Director at JE Energy commented: “We are very grateful to Afreximbank for the facility granted to JE Energy Ltd. It is a clear demonstration of Afreximbank’s willingness to support capable partners in driving energy solutions and unlocking the potential in the sector. We strongly believe this will go a long way to support JE Energy’s plan not only in Guyana but across the African continent.”

Guyana’s Ministry of Natural Resources announced that BB Energy Trading Limited was awarded the contract to market crude from the Liza Unity and Prosperity FPSOs, while JE Energy was awarded the contract to market crude from the Liza Destiny FPSO.

The duration of this contract will be for 12 months commencing in 2024. The ministry disclosed that the combined premium per barrel to be received by the GoG from these two companies for the crudes from the three FPSOs amounts to US$1.85, reflecting a substantial 93% increase compared to the US$0.96 premium secured in the previous period (2023- 2024).

 

 

 

 

 

 

Winner of 2 oil blocks happy with 10% taxes, 10% royalty

December 02, 2024

International Group Investment Inc., awarded oil blocks in Guyana’s maiden auction, is satisfied with the fiscal terms under the new Production Sharing Agreement (PSA). The company, led by Chief Executive Officer (CEO) Dr. Levi Wilson Odoe, secured two shallow-water concessions, S5 and S10, during the auction that commenced in December 2022.

The Government initially put 14 blocks on offer but received bids for eight. The PSA framework includes a 10% royalty on oil production and a 10% corporate tax.   Cost recovery is capped at 65% annually, with profits split evenly between the government and operators. The fiscal terms of the new PSA have improved on those of the PSA signed with ExxonMobil Guyana Limited for the Stabroek Block. That deal requires 2% royalty, no taxes, 75% cost recovery ceiling each month which leaves 25% of profit to be shared with Guyana.

During a recent interview with this publication, Dr. Odoe, a lawyer and international arbitrator, highlighted the favourable business environment in Guyana as a key reason for the company’s participation in the auction.

“I like stable government, because we are business people, we are not politicians. Any government that comes, as long as you create an enabling environment to do business, we are happy.”

He emphasised the company’s agreement with the PSA terms, noting, “We have reviewed the PSA with our lawyers, and we are very happy with the cost recovery, the signature bonus, and the royalties. We are happy with all the terms and conditions.”

The company is in the process of finalizing documentation required by the government before they move along with the process. “We are submitting this week,” he said, expressing confidence that the process would conclude smoothly.

 

 

 

 

Company that won two oil blocks in Guyana happy to pay 10% taxes, 10% royalty

“We are ready to go, once we discover commercially viable oil, the finances are there to start operation almost immediately.”

IGI is teaming up with Nigerian company Sigmund Oilfields Limited for the development of the oil blocks. Dr. Odoe invited Sigmund to Guyana as he is confident in the company’s ability to execute works offshore Guyana. Sigmund’s General Manager Chris Ubah disclosed that the company is experienced in oil and gas exploration, production and seismic survey. He added, “Sigmund Oilfields is a major player in Nigeria’s offshore oil and gas sector…Sigmund is also a trader of crude oil.”

“We are known for unlocking opportunities…” he underscored. In relation to the partnership with IGI it was stated that the companies have been in talks with each other for about two years. It was stated that the companies are eagerly awaiting the finalization of the agreement with government before they can move straight into action.

 

 

 

 

Historic state visit of Modi

November 22, 2024

A day after Indian Foreign Minister Jaideep Mazumdar said India was interested in buying up to two million barrels of crude from Guyana, dynamic Indian Prime Minister Shri Narendra Modi told a special sitting of Parliament in Guyana that India is diversifying its sources of oil as demand for energy is growing.

“In this regard, we view Guyana as an important energy source.”

Prime Minister Modi said he will encourage large Indian companies to invest in Guyana. While India and Guyana did not seal a deal on oil, both countries signed memoranda of understanding for cooperation in multiple sectors, including hydrocarbons and defence.

The Guyana Office of the President issued a joint statement from Modi and President Mohamed Irfaan Ali after talks when energy cooperation was a focal point.

“The two leaders emphasised the importance of energy cooperation in achieving sustainable development goals and committed to a fair and equitable energy transition. They agreed to the strengthening of bilateral hydrocarbon trade and cooperation in petroleum products, sharing of best practices, technology transfer and investment in the gas-to-energy project, fertiliser production, mining collaboration, deep-water port infrastructure and in clean energy initiatives.”

During extensive bilateral discussions, Ali and Modi delved into a range of bilateral, regional and multilateral issues, demonstrating a shared commitment to strengthening ties.

The visit, the first from an Indian prime minister since Indira Gandhi came in 1968, was a significant milestone in relations between two of the fastest-growing economies. Thanks to strong historical and cultural ties, India and Guyana signed mutually beneficial agreements. Guyana’s foreign secretary, Robert Persaud, said,

“Both countries can, through their cooperation, develop greater synergies in a variety of areas, including energy, agriculture, technology and security.

Already, we have strong bilateral ties but with PM Modi’s visit, it is expected that the relations between Guyana and India will be taken to a level that will enhance benefits for both countries.”

Dr Scott MacDonald, an economist and Caribbean Policy Consortium fellow, observed,

“Guyana is climbing the ranks as an oil province. It will continue to grow for both oil and natural gas and India faces a deficit in terms of its ability to generate power. It needs imported energy.

Suriname next door to Guyana is on the verge of having its own revolution in oil and gas … so, for India, looking at the southern energy complex of Guyana, Suriname, Trinidad and Tobago and possibly Grenada, is geopolitically important.”

Guyana was chosen as the landing point in the region, a significant fact. Last year, President Ali was invited to India as the chief guest at the Pravasi Bharatiya Divas, which celebrates the contribution of the Indian diaspora. Ali was awarded the Pravasi Bharatiya Samman, the highest honour for overseas Indians.

At 40% , the majority of Guyana’s population are of Indian origin. Many maintain cultural and religious practices of British Indian ancestors who arrived in Guyana from 1838 to 1917 as indentured farmers to plug the labour gap on plantations after abolition of slavery. Of many famous West Indians, Sir Shridath Ramphal was Commonwealth Secretary-General from 1975 to 1990.

Modi paid homage with a floral tribute to Mahatma Gandhi at his statue in the historic Promenade Gardens in Georgetown. He recalled the icon’s eternal values of peace and non-violence which continue to guide humanity. The statue was installed in commemoration of Gandhiji’s 100th birth anniversary in 1969. Modi also paid floral tribute at the Arya Samaj monument nearby.

Prime Minister Modi addressed the Indian Community and Diaspora in the presence of President Dr. Irfaan Ali, Vice President Bharat Jagdeo and Former President Donald Ramotar. Shri Modi thanked the President and expressed happiness over the grand welcome he received with special warmth and kindness.

“The Spirit of hospitality is at the heart of our culture”. Shri Modi remarked that he planted a tree with the President and his Grandmother as part of the Ek Ped Maa ke Naam initiative of the Indian Government, a moment he would remember forever.

He was deeply honoured to receive the Order of Excellence, the highest national award of Guyana. He thanked Guyana for the award, dedicated to 1.4 billion Indians, the 3 lakh strong Indo-Guyanese and their contributions to the development of Guyana.

Recalling his visit to Guyana two decades ago as a curious traveller, Shri Modi was happy to return to the land of many rivers as Prime Minister of India. Noting changes , he said that the love and affection of the people remains the same.

His experience of the tour reaffirmed that “You can take an Indian out of India, but you cannot take India out of an Indian.”.

Earlier, he visited the Indian Arrival Monument commemorating safe docking of the first ship transporting indentured Indians to the West Indies, to make Guyana their home. It brought to life the long and arduous journey of the ancestors of Indo-Guyanese nearly two centuries ago from different parts of India, bringing diversity of cultures, languages, traditions and stories, enriching the culture of Guyana.

He lauded the spirit of Indo-Guyanese for their fight for democracy and work to make Guyana one of the fastest-growing economies from modest beginnings. He lauded efforts of Shri Cheddii Jagan, who rose to be a leader of global stature from a humble background. He praised President Ali, Vice President Jagdeo, and former President Ramotar as ambassadors of the Indo-Guyanese community. Joseph Roman, one of the earliest intellectuals, Ram Jaridar Lalla, one of the earliest poets, Shana Yardan, the renowned poet and others had a profound impact on art, academics, music and medicine.

Highlighting commonalities providing a strong foundation to India-Guyana friendship, Shri Modi said Culture, Cuisine and Cricket were three important links in particular that connected India with Guyana. This year’s Diwali was special as Shri Ram Lalla had returned to Ayodhya after 500 years. India remembered that the holy water and shilas from Guyana were sent to build the Ram Mandir in Ayodhya.

He hailed Guyana’s strong cultural connection with India, despite being two oceans apart. India and Guyana were proud of a rich and diverse culture and celebrated diversity, showing how cultural diversity was their strength. He noted that the unique local cuisine had both Indian and Guyanese elements.

Discussing cricket which binds the nations strongly, Modi said Kanhai, Kalicharan and Chanderpaul were well-known names in India. A shared history binds India and Guyana, with democratic values, aspirations for growth and development, commitment to the economy and ecology and belief in a just and inclusive world order.

Pleased that the people of Guyana are well-wishers of India, Shri Modi highlighted “India’s journey over the past decade has been one of scale, speed and sustainability. In 10 years, India grew from the tenth largest economy to the fifth largest and soon, India will become the third-largest. Youth made India the third largest start-up ecosystem. India was a global hub for e-commerce, AI, fintech, agriculture, science, technology and more. Emphasising India’s space missions to Mars and the moon, he said from highways to i-ways, airways to railways, we are building state of the art infrastructure. India had a strong service sector, was strengthening manufacturing and had become the second largest mobile manufacturer.

“India’s growth is inspirational and inclusive and the digital public infrastructure was empowering the poor. Government opened over 500 million bank accounts connected with digital identity and mobiles. This helped people receive assistance directly in their bank accounts. Ayushman Bharat was the world’s largest free health insurance scheme, benefiting over 500 million people. Government built over 30 million homes and lifted 250 million people out of poverty in one decade. Initiatives benefited women the most and millions of women were becoming grassroots entrepreneurs, generating jobs and opportunities.”

Amid massive growth, India focused on sustainability. In a decade, solar energy capacity grew 30-fold and India moved towards green mobility with 20 percent ethanol blending in petrol. At the international level, India played a central role in initiatives like the International Solar Alliance, Global Biofuels Alliance, the Coalition for Disaster Resilient Infrastructure and the International Big Cat Alliance which will benefit majestic Jaguars of Guyana.

Recalling that India hosted President Irfaan Ali as the Chief Guest of the Pravasi Bharatiya Divas last year, Shri Modi said India had also received Prime Minister Mark Phillips and Vice President Bharrat Jagdeo. Together, they worked to strengthen bilateral cooperation in many areas. Both countries agreed to widen the scope of collaboration from energy to enterprise, Ayurveda to agriculture, infrastructure to innovation, healthcare to human resources and data to development.

The partnership holds significant value for the wider region to which the second India-CARICOM summit was testimony. As members of the United Nations, both countries believed in reformed multilateralism and understood the power of developing countries as they sought strategic autonomy and support for inclusive development. Both countries prioritise sustainable development and continue to call for dialogue and diplomacy to address global crises.

Calling diaspora Rashtradoots, Shri Modi said they were Ambassadors of Indian culture and values. The Indo-Guyanese community was doubly blessed with Guyana as motherland and Bharat Mata as ancestral fatherland. Today, when India is a land of opportunities, each one can play a bigger role in connecting our two countries. Urging the diaspora to participate in the Bharat Ko Janiye Quiz, he said that it was a good opportunity to understand India, its values, culture and diversity.

Shri Modi invited the diaspora to the Maha Kumbh at Prayagraj, from 13 January to 26 February next year and the Ram Temple at Ayodhya. Concluding, he invited diaspora to the Pravasi Bharatiya Divas in Bhubaneswar in January and Mahaprabhu Jagannath in Puri.

 

 

 

 

 

Guyana, India formalise agreements to advance health, energy, agriculture

November 20, 2024

The Governments of India and Guyana formalised five historic Memoranda of Understanding (MOUs), aimed at strengthening bilateral cooperation in hydrocarbons, pharmaceuticals, healthcare, agriculture, and the development of economic and human capital. The agreements were officially exchanged at State House Georgetown, between Guyana’s ministers and India’s Minister of External Affairs, Dr Subrahmanyam Jaishankar.

This significant development follows bilateral discussions between President Irfaan Ali and Prime Minister of India, Shri Narendra Modi on day one of his state visit. President Ali emphasised the importance of the agreements, describing them as a significant milestone, particularly in the agriculture sector.

Collaboration in agriculture will focus on the exchange of information, technology and expertise to enhance efficiency in the sector and other related allied industries. This partnership aims to promote climate-resilient and precision agriculture, foster digital public infrastructure and create a supportive ecosystem for farmers. Guyana will also benefit from India’s digitisation strategies, focusing on improving governance, and healthcare delivery through telemedicine, and other digital transformations.

As part of the five agreements, Guyana will also benefit from India’s expertise in vaccine manufacturing, which will support Guyana’s initiative to establish a regional vaccine production hub. The collaboration also extends to exploring traditional medicine, including Ayurveda and modern pharmaceutical solutions.

In Urban and Infrastructure Development; India will provide Guyana with experience in urban development, with a focus on improving urban governance, efficiency, and infrastructure.

A joint working group will be established to ensure the smooth application of the agreements, specifically focusing on bottlenecks and systematic challenges.

The Head of State praised Prime Minister Modi’s leadership and developmental initiatives, noting their adoption by developing countries like Guyana. He described the visit as a pivotal step toward fostering deeper cooperation between the two nations., PM Modi emphasised India’s commitment to advancing mutually beneficial partnerships in the identified areas.

He commended Guyana for joining several initiatives led by the Republic of India, including the Global Biofuels Alliance (GBVA).

“India has made significant contributions to Guyana’s human resource development…this is a huge priority area for India and we will further expand this cooperation,” he emphasised.

This new development forms part of a series of discussions planned with Prime Minister Modi, during his historic three-day state visit to Guyana.

Later today, both leaders will address the CARICOM-India Summit. Since establishing diplomatic ties in 1996, the two nations developed strong cooperation in economic, scientific, technical and cultural fields.

Last year, President Ali led a 43-member delegation to India, further intensifying bilateral cooperation. Joint working groups were established to accelerate discussions in agriculture and food production, information communications technology, energy, Ayurvedic and wellness, natural medicine and development, defence, and human resource and capacity building.

India is also contributing to Guyana’s infrastructural development, including the East Coast to East Bank Demerara Road linkage, which is nearing completion.

 

 

 

 

 

India, Guyana sign pact for oil exploration & refineries

November 21, 2024

Prime Minister Narendra Modi is currently on a three-day visit and is expected to return today. This is the second time in 56 years since a Prime Minister of India visited Guyana. Modi first visited some 24 years ago as a private citizen but has returned to deepen bilateral ties. At State House in Georgetown, he noted that the two countries identified areas to deepen cooperation on agriculture, technology and the hydrocarbon sectors among others.

“Given the new possibilities in the area of energy, we will move forward together as natural partners. Guyana will play an important role in India’s energy security. We will create a road map for a long-term partnership. The MOU we are signing today on this subject will further strengthen our cooperation.”

He was pleased that Guyana joined initiatives birthed by India such as the International Solar Alliance, the Coalition for Disaster Resilient Infrastructure, and the Global Biofuel Alliance. “These will help strengthen efforts being made across the world to move towards a green and sustainable future.”

Secretary in the Ministry of External Affairs, India, Jaideep Mazumdar revealed elements of the energy MOU signed between the countries. “The hydrocarbons agreement is an umbrella agreement that covers many aspects. It includes both upstream and downstream aspects from prospecting and exploration down to setting up downstream projects like petroleum refinery projects, gasification projects etcetera.”

The agreement will also allow for skills training of Guyanese in the areas of partnership with India. When asked how soon exploration activities could commence, he said this will depend on the offer proposed by Guyana.

“I’m sure the oil companies in India will be in conversation. There are both private as well as public sector oil companies in India who would be interested in participating in the hydrocarbons sector.”

Mazumdar believes there is a wide scope for cooperation on a deal to purchase Guyana’s sweet light crude and “the future is open” in that regard. India would like to have a “more direct” relationship with Guyana, however, “that is for Guyana to decide how they wish to proceed.”

India offers greater predictability. “For example even in the offtake of crude we need large quantities and if we were to know well in advance that the quantities are available, the contracts would be much more easy to conclude and also the transportation is another aspect because this is a very long way away.”

The two sides have not yet discussed prices but terms would be ironed out during negotiation.