EXXONMOBIL’S affiliate, Esso Exploration and Production Guyana Limited (EEPGL) has spent US$119.5M on the procurement of goods and services from local businesses since 2015 to now, according to Upstream Geoscience Manager at ExxonMobil Guyana, Doug McGeehee.

“Since 2015 to now, EEPGL has contributed to the growth and development of Guyanese suppliers and workforce,” Doug McGeehee highlighted at a recent private sector forum.
In so doing, he disclosed that US$119.5M on the procurement of goods and services from local businesses since 2015 till the first quarter of 2019 alone, which ended on March 31. According to him, total expenditure with Guyanese has increased greatly over the years since 2015.

Of this total US$119.5M total, US$58M was recorded at December’s end, for 2018. This amount was expended on 499 local suppliers. In 2015, this figure stood at a mere US$1.7M, spent on 90 local businesses while in subsequent years, it was $11.5M (2016), utilised on 177 businesses and US$23.8 (2017), utilised on 309 businesses. And already for 2019, recorded up to March 31, EEPGL has utilised 321 Guyanese businesses, with expenditure totalling US$24.4M.

Tallying up to the end of March as well, EEPGL’s operations in Guyana led to the recruitment of 1,183 Guyanese — representing 49 per cent of the project’s total workforce. McGeehee also disclosed that this is a marked increase from the 43 Guyanese the subsidiary had in its operations in 2015. Recently, 25 Guyanese were recruited to work on the Floating Production Storage and Offloading (FPSO) vessel, which would have about 100 to 150 persons on board. An FPSO is basically a floating vessel that stores barrels of oil. The vessel is expected to meet Guyana’s shores later this year.

In addition to the oil company’s input on local content, Director of the Department of Energy, Dr Mark Bynoe, has said that Guyana has raked in over US$75 million in 2018 from local content in the oil and gas sector. This figure, according to Dr Bynoe, was derived “directly” from the emerging oil and gas sector and does not include downstream impacts of the industry such as works in mechanics, electrical work, welding and technical warehousing, among others. As such, Dr Bynoe contended that the value of this sector, when taken in totality, will be significantly greater.

Exxon’s McGeehee noted that the goods and services procured ranged from foodstuff to engineering. Oil production is slated to commence in Liza Phase One by the first quarter of 2020. It will produce up to 120,000 barrels of oil per day at peak rates utilising the Liza Destiny FPSO, which is expected to arrive offshore Guyana in the third quarter of 2019.

“When you look at Liza Phase One, the revenues that go to the Government of Guyana in the first five years will be about US$1.5B,” the Exxon manager said, adding that over its lifetime, this is set to rake in an estimated US$7B.

Notably, Liza is part of the wider Stabroek Block offshore Guyana, which spans 6.6 million acres, or 26,800 square kilometres. EEPGL holds 45 per cent interest in the Stabroek Block. Hess Guyana Exploration Ltd holds 30 per cent interest and CNOOC Petroleum Guyana Limited, a wholly owned subsidiary of CNOOC Limited, holds 25 per cent interest.

The current discovered recoverable resources are estimated at more than 5.5 billion barrels of oil equivalent. The 13 discoveries on the block to date have established the potential for at least five FPSO vessels producing more than 750,000 barrels of oil per day by 2025. What this means, is that there will be significant revenues going to the Government of Guyana for all Guyanese. And cognisant of all of this, McGeehee remarked, “This is a very, very exciting for ExxonMobil and a very exciting time for Guyana.”

The man also reminded the gathering of private sector stakeholders that Guyana has instituted a Sovereign Wealth Fund (SWF), which is known as the Natural Resources Fund.

The Natural Resources Fund Bill 2018 was passed on January 3, 2019, in the National Assembly without objections and was subsequently signed into law. The law includes provisions for public oversight; withdrawals, including parliamentary approval and amounts to be withdrawn; eligible investments for its resources; accounting, reporting and auditing of records; and codes of conduct for members of the Oversight and Investment Committee. Simply, this fund is expected to manage the wealth of Guyana to foster sustainable development. “How that SWF is used, how those revenues are used is essential to Guyana’s development,” McGeehee said.