— construction of US $500M onshore petroleum facility next year

AS THE Government works towards strengthening Guyana’s emerging petroleum sector, construction of an onshore petroleum facility will commence in 2017 at Crab Island, which is at the mouth of the Berbice River.In September this year, the Ministry of Natural Resources (MNR) announced that it will be working in conjunction with the Ministries of Public Infrastructure and Business to establish an oil and gas facility which it said is critically needed and would be part of the raft of measures intended to ensure that Guyana keeps on the right trajectory in the development of the oil and gas industry.

On Thursday morning Minister of Natural Resources, Raphael Trotman told members of the media at the Guyana Geology and Mines Commission (GGMC) boardroom that Cabinet has green-lighted the establishment of an onshore industrial site to service the off shore exploration and production activities of the oil companies operating offshore Guyana.

He said that the facility will be a public/private partnership initiative which will be built to the tune of US$500M and a minimum of at least 600 direct jobs which will be created from the venture.

He said that investments will come from the private sector as well as the oil companies working in Guyana.

According to Trotman, interviews were held with a significant number of persons in October and November regarding the construction of the facility.

He noted that recently he was accompanied by Minister of Public Infrastructure, David Patterson on a visit to Louisiana in the United States of America where the two officials saw firsthand the operations of an onshore petroleum facility.

Meanwhile, the MNR has received from Esso Exploration and Production Guyana Limited the company’s development plan which outlines each aspect of the steps regarding its operations here.

Esso is a subsidiary of US oil giant ExxonMobil. Trotman said that the plan will be reviewed by international experts who the Government will engage for the specific purpose.

Two weeks ago Esso Exploration awarded a contract to Dutch consortium SBM Offshore for a floating production, storage and offloading (FPSO) vessel, which is seen as a pivotal step in its plans towards First Oil carded for 2020.

SBM Offshore will perform front-end engineering and design for the FPSO and, subject to a final investment decision on the project in 2017, will construct, install and operate the vessel.

Trotman said that on Tuesday Cabinet also gave the go-ahead for several other initiatives geared for the development of the emerging oil and gas sector and these included projects relative to the ministry’s policy and legislative agenda, the crafting of the Petroleum Commission Bill and a bill to provide for the establishment of the Sovereign Wealth Fund, known as generational savings.

He said a draft copy of the Petroleum Commission Bill was shared with stakeholders, the oil exploration companies operating in Guyana, the National Toshaos Council (NTC) and the Parliamentary Opposition among others.

Trotman said that passing of the bill will ensure the formation of the Petroleum Commission which will become the regulatory body of the sector in Guyana.

He noted that the Sovereign Wealth Fund aims to ensure that pools from the petroleum sector reach every Guyanese, for generations ahead. The Government is currently engaging the Commonwealth Secretariat’s legal department for assistance in developing a framework for the fund.

“The framework is being finalised, the drafts are being delivered and we are expecting it within a number of days,” Trotman said.

He said the fund will enable the Government to protect the economy from the “volatile nature” of natural resources revenues, assist in growing and modernising the sustainable status of the economy and further enhance the capacity of Guyanese.

A draft of the framework of the fund will be presented to the National Assembly in January 2017.