Onshore Development


ACCORDING to recent statements from ExxonMobil, the estimated oil reserves in the Stabroek Block are now at least 5.5 billion barrels. The unprecedented series of 12 discoveries has stretched across open ocean more than 100 km offshore. But as Guyana edges closer to first-oil in 2020, signs of this rapid progress are increasingly easy to discern on land.

Reports last week indicated that one of the world’s largest oil-and- gas contractors, Italy’s Saipem, will be ramping up work, both offshore and onshore, in preparation for the arrival of the Liza Destiny late in 2019. The Destiny is an FPSO, a floating production, storage, and offloading vessel built for producing oil in deep water.

The highly specialised multi-billion-dollar vessel is currently in the late stages of construction in a Singaporean shipyard.
To prepare for the Destiny’s arrival, Saipem is rapidly developing its Water Street support facility on the eastern bank of the Demerara River. The facility will support two of Saipem’s own vessels over the next several months. One vessel is a seismic survey ship, which will be used for further exploration activity.

The other is a special ship designed to help install the complex deep-water pipe system that will connect the seafloor wells in the Liza development area to the Destiny at the ocean’s surface. This is called a “SURF” system, which stands for Subsea Umbilicals, Risers & Flowlines. It’s an integral part of oil production that connects the FPSO ship with a system of deep-water wells that produces oil and injects water and gas to enhance production volumes.

The Saipem ships will require more than 700 crew members, working around the clock—that means that local businesses such as cafes, bars, and hotels are likely to experience “indirect economic benefits” of development. These benefits include the money that workers spend at local Guyanese businesses and can be substantial enough to support new and existing businesses in the service industry.

Saipem, along with other major contractors such as SBM and TechnipFMC, have been expanding their presence and workforce in Guyana. These companies provide a host of services to oil companies all over the world, from surveying the seafloor to drilling wells, staffing vessels, and providing technicians. Saipem told reporters last week that it plans to do a substantial amount of industrial fabrication here in Guyana, which will require local industrial capacity to meet the needs of the oil industry over the long term.

Cost is a key factor for these companies; oil development in Guyana is predicted to last for decades, which can make it more cost-effective to invest in manufacturing capabilities here, rather than relying on imported materials and components. This process will help build capacity for more technical maintenance and engineering operations.
One of the most promising things announced by Saipem to date is its partnership with the University of Guyana, which will train students to work on the Liza Phase One and Two projects. This is an initial step towards the University of Guyana becoming a hub for oil-and-gas education.

Contractors are a major source of job opportunities and will be looking for employees with a broad swath of skill types, from painting and scaffolding to welding and blasting. Safety concerns mean that standards are extremely high in the offshore oil-and-gas industry, which makes training essential for workers looking to grab these kinds of roles.

Representatives of Saipem’s welding and fabrication team have reportedly visited Guyana to evaluate the Government Technical Institute’s ability to supply welders and other technical professionals. They also explored opportunities for collaboration in training and capacity-building.

All of this is good news for Guyana’s potential to benefit from the oil industry for decades. While the revenues from Guyana’s share of the project will be a substantial contributor to the economy, it is important to capture adjacent and indirect economic benefits that can help support local companies.

Even more importantly for the long term, contractors are beginning to promote the development of substantial industrial capacity right here in Guyana; facilitating the development of training and skills to service that industrial potential will create opportunities for Guyanese far into the future.