…President Granger hails it as momentous occasion
— declares December 20 National Petroleum Day
President David Granger on Friday declared December 20 as ‘National Petroleum Day’ as he simultaneously announced the production of first oil in a televised national address.
The President said that the proclamation will remind Guyanese “of our duty to protect the country’s patrimony and to ensure the sustainable management of finite hydrocarbon resources”.
American oil giant, ExxonMobil will go down in history as the first company to pump oil for commercial purposes here.
President Granger described petroleum production in Guyana as a transformative process in the country’s economic development. The petroleum sector will stimulate increased employment and expand services, he said.
According to the President, the APNU+AFC Government will unveil a ‘Decade of Development, 2020-2029’ plan, aimed at ensuring that petroleum resources will be utilised to provide the ‘good life’ for all.
The ‘Decade’ is a 10-year plan to intensify development and improve citizens’ quality of life, he said. He noted that every Guyanese will benefit from petroleum production. “No one will be left behind,” he said.
President Granger noted that the Department of Energy was established to manage the country’s hydrocarbon resources. He said it is seeking the best advice, including international best practices as it builds the institutional, legislative and regulatory capability to manage this sector effectively and efficiently.
He also noted the establishment of legislation to regulate the sector. The Natural Resource Fund Act 2019 was passed by the National Assembly.
The Act provides for ensuring that the country’s resource wealth benefits both current and future generations; it incorporates oversight, accounting, reporting and auditing mechanisms to promote prudent, transparent and accountable management of oil revenues.
President Granger assured the populace that the APNU+AFC government will manage petroleum revenues prudently to ensure fiscal discipline, financial sector stability, sustainable levels of public debt and low inflation.
He said withdrawals from the ‘Fund’ will follow a balanced approach, prioritising investment in public education, public health, public infrastructure, public security, social protection and other social services and will support private sector development.
“Petroleum production has brought the prospects of a higher quality of life closer to our households and neighbourhoods. It is a momentous event which we should commemorate for perpetuity,” the Guyanese leader noted.
GOOD LIFE BECKONS
Guyana’s future, he said, is brighter with the beginning of ‘first oil’. The ‘good life’ for everyone beckons, he added. “Let us work together to build a happy and prosperous country for the present and future generations,” he President urged.
First oil production was initially expected to go on stream during the first quarter of 2020.However, several weeks ago, HESS Corporation, a partner of Exxon, announced that first oil was possible late 2019.
Several days ago, it was reported that Exxon has secured the services of a number of oil and gas companies as it enters the commercial production phase of its operations here.
Among them are the Texas-based industrial service company, Baker Hughes, Italian oil and gas industry contractor, SAIPEM, and global oil and gas company, TechniFMC– a United Kingdom (UK) company that provides complete project life-cycle services for the energy industry.
These companies, which provide direct services in various areas to ExxonMobil, were on display at the ongoing Department of Energy’s GIPEX 2019 forum at the Marriott Hotel last month.
Guyana will lift its first cargo of petroleum produced at the Liza Destiny during February or March. This follows a handful of lifts by the Contractor Group, which includes ExxonMobil, Hess and CNOOC.
The order follows international conventions for a “fair” lifting order that goes by whomever has the next largest entitlement percentage at that time.
The government will have the largest outstanding entitlement to lift by February – though of course royalties will be paid on all of the earlier cargoes.
During all of these lifts and for all future lifts, the oil-lifting process will be monitored by both independent third-party auditors and two additional government representatives.
Last weekend, Director of the Department of Energy, Dr. Mark Bynoe , said that the first three cargo lifts of Guyana’s crude following ‘first oil’ will be up for direct sale to international traders who were expected in the country this week.
He noted the short-term arrangement is the best option for Guyana as it heads into the new industry.
Through his department, Dr. Bynoe clarified misguided reports, by confirming that the country’s decisions are being guided by a full team of international experts, internal experts and the Guyana Public Procurement Commission (PPC).
Apart from HESS, Esso Exploration and Production Guyana Limited (EEPGL) holds 45 per cent interest and CNOOC Petroleum Guyana Limited, a 25 per cent interest in the Stabroek Block.
It is estimated that there is over six billion barrels of oil equivalent in the oil rich Stabroek Block while the involved partners continue to see “multibillion barrels of additional exploration potential”.
ExxonMobil and its partners have racked up 14 commercial oil discoveries in the Stabroek Block, the last being the Tripletail-1 exploration well located approximately three miles northeast of the Longtail discovery. The Tripletail discovery adds to the six billion barrels of oil equivalent.
The Liza Phase 1 project will produce up to 120,000 barrels of oil per day at peak rates utilising the Liza Destiny FPSO. It is expected to generate over $7B in royalty and profit oil revenues for Guyana over the life of the project.
Last month, President Granger while meeting with a team from the Inter-American Development Bank (IDB), said Guyana must be prepared in the shortest possible time, for the coming of first oil. He stressed that it is incumbent upon the government to make decisions that are best for the sector and the country.
Already, all systems are being oiled for the petroleum production here.
On Friday, Minister of Natural Resources Raphael Trotman told Guyana Chronicle that Guyana “is as ready as it can be” for first oil.
Trotman said that he was “euphoric” about the oil sector’s advancement from first oil onward.
Liza Destiny, Guyana’s first FPSO set to operate at the Liza Phase 1 Development, arrived in September this year in the Stabroek Block, some three weeks ahead of schedule. The vessel is twice the length of the Providence Stadium; half the width of the Georgetown Cricket Ground; has the depth of the Kingston Lighthouse and the capacity to store some 1.6 million barrels of oil.
In March this year, the Guyana Office for Investments (Go-Invest) commenced training exporters ahead of first oil.
Go-Invest first started its drive to help businesses, with a seminar on oil and gas last year. The seminar helped businesses to understand what they have to do in order to be prepared to contribute to the sector.
“We want to ensure that Guyanese are part of the development,” said Chief Executive Officer of Go-Invest, Owen Verwey, during a press conference in March.
A number of local companies have been working to attain ISO certification in the face of Guyana’s impending oil boom. Many corporate entities have been benefitting from coaching provided by the Centre for Local Business Development.
The centre is an ExxonMobil-funded effort to help local firms learn about opportunities in the oil-and-gas sector, increase their competitiveness through training and capacity-building, and eventually join the oil production supply chain.