–Routledge says value of ongoing, near-term projects exceeds US$30B

BASED on preliminary assessments of the Stabroek Block offshore Guyana, ExxonMobil believes that there is scope for 10 projects, which could generate billions of US dollars in revenue for Guyana over the coming years.

The Stabroek Block is 6.6 million acres (26,800 square kilometers), with current discovered recoverable resources estimated at more than 10 billion oil-equivalent barrels.

Addressing a gathering of businessmen and women at the Georgetown Chamber of Commerce and Industry (GCCI)’s 132nd Awards Ceremony and Gala Dinner, on Thursday evening, President of ExxonMobil Guyana, Alistair Routledge, said: “We believe there is scope for up to 10 projects on the Stabroek Block offshore Guyana. We have an active exploration programme offshore where we have made an additional five discoveries this year.”

Already, the projects taking place in the Stabroek Block provide a foundation for growth of the private sector, he said.

“It is difficult to overestimate the scale of what is taking place. The Liza Destiny began production in December 2019. Currently, the government has received nine lifts of one million barrels each, which combined with royalties has resulted in more than US$500 million in revenues,” Routledge related.

Further, he said that the Liza Unity arrived in Guyana’s waters in late October of this year and is expected to begin production early next year. The Unity’s production target is 220,000 barrels per day, a significant increase from the Liza Destiny.

Added to this, the company has a third project approved by the government, Payara. The Prosperity, which will service this project, is under construction in Singapore and expected to sail for Guyana in 2023.

“And of course, as many of you know, we are currently in discussions with the government regarding the field development plan for the Yellowtail Project. Then, there is the gas-to-energy project which will deliver lower cost electricity and be a cornerstone of the Wales Estate Development,” Routledge said.

When consolidated, those projects represent around US$30 billion of foreign-direct investment in Guyana that will generate billions of US dollars in revenue to the country over the coming years.

In light of this, the ExxonMobil Guyana President said: “This is the foundation in place, and it goes well beyond ExxonMobil Guyana. This line up of projects is the basis for planning among our major contractors, many of whom have opened headquarters here.”

According to him, to date, all of the major international oil and gas contractors have a presence in Guyana and have steadily been moving activities from the United States, Brazil and Trinidad and Tobago.

As a result of this movement of resources, almost the entire supply chain for ExxonMobil’s offshore activities have been relocated to Guyana.

This, Routledge said, has created opportunities for the Guyanese private sector, whether it is build-outs for shore base, warehousing, or waste treatment facilities.

“As part of the Yellowtail project, we also plan to invest in a project shore base that will enable an increase in fabrication and load-out activities in Guyana,” the ExxonMobil Guyana President related.

PREPARE
Ahead of this, he encouraged the local private sector to use this opportunity to build capacity, capability and experience for long-term international competitiveness. It is Routledge’s firm view that the private sector, in so doing, could transform the national economy with a profound, positive effect on lives across the country.

As the industry itself gears up for further production, there are six drill ships operating offshore Guyana, namely the Stena Carron, the Stena DrillMAX, the Noble Bob Douglas, the Noble Tom Madden, the Noble Don Taylor and the Noble Sam Croft.

Westmount Energy had said that Guyana, with its positive prospects and vast potential, remains one of the few areas of “blue-chip” interest in high-impact exploration. Investopedia defines blue-chip stocks as secure investments because they pay out dividends as well as consistently and steadily grow over time.

As it is now, Guyana is expected to end the year with over US$600 million in its Natural Resource Fund (NRF). Revenues reaching close to US$70 million could be earned from the sale of the country’s final oil lift for this year, which was completed recently.

Guyana had earned close to US$80 million from the sale of its penultimate lift for 2021, taking the total earnings in the NRF to over US$534 million.

According to the Bank of Guyana’s monthly report on the NRF, the aggregate sum moved from US$436,132,855.53 in September to US$534,016,987.03 in October.

This is as a result of the country earning G$16,757,920,000 from “profit oil” and G$3,647,083,000 (approximately US$17 million) in royalties from ExxonMobil.

A report compiled by the Inter-American Development Bank (IDB) early this year showed that earnings from Guyana’s oil and gas sector could reach US$31 billion (roughly G$6.7 trillion) by 2035.

Moving ahead, considering the immense direct and indirect benefits that will accrue to Guyana from the oil and gas sector, President Ali said there will be key initiatives for managing the sector, with some already in the draft stage.

Among those initiatives are the draft Local Content Policy and Bill, building local content for audit, revising fiscal management, and establishing an accountability and transparency framework.
“Resources will be used to enhance the traditional economy and create a pathway to build sustainable and diversified sectors to bring long-term prosperity,” Dr. Ali said.

The overarching plan, as outlined by the Head of State, is to build an equitable society, in which every Guyanese person, irrespective of the region in which they live, irrespective of their ethnic or religious background, would have an equal opportunity and stake in the development of the country.