Tuesday, November 29, 2022

Guyana needs 10 FPSOs; renegotiation would kill the momentum – Dr. Jagdeo

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Guyana’s Vice President Dr. Bharrat Jagdeo said on Friday that Guyana needs 10 oil-producing vessels to keep the economic momentum for government’s development agenda.

He made the comment in defense of the incentives given to the Stabroek Block partners – ExxonMobil, Hess and CNOOC – to aggressively develop the resources at the prolific acreage.

The Stabroek Block Production Sharing Agreement (PSA) was signed in 2016 by the previous administration. Though the Vice President says he thinks the deal was too generous, he believes that it also facilitates aggressive development investments consistent with the government’s agenda.

“We need to extract this natural resource as quickly as possible and then convert it into monetary assets… Save some for the future and invest some now, as to generate a more sustainable non-oil economy,” the former Guyanese President told reporters, at a press conference.

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Furthermore, as some have argued for the deal to be renegotiated, the Dr. Jagdeo said doing that would kill the momentum in the local oil sector and in the wider economy.

“We can’t lose the momentum now, when the world can’t even generate momentum. Suriname and many of the other countries that have resources can’t generate a momentum,” he said. “If we don’t utilise this opportunity now and especially with net-zero, who is going to utilise it? It is Saudi Arabia and Norway and the others that are busy pumping more oil and gas.”

Presently, there are two floating production, storage and offloading (FPSO) vessels operating offshore. Two more have been approved for first oil in 2023 and 2025. By then, combined production offshore Guyana will exceed 800,000 barrels of oil per day (bpd).

Another project, called Uaru, is currently in the application stage.

ExxonMobil plans to have six FPSOs operating by 2027 offshore Guyana, with combined production in excess of 1.2 million barrels per day.

ExxonMobil Guyana President Alistair Routledge recently confirmed in an interview with Forbes that the company envisions 10 FPSOs to develop the proven resource of 11 billion oil-equivalent barrels.

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