With Guyana approaching its second year as an oil-producing nation, the small South American country, with a population of approximately 750,000 continues to see increasing benefits from its resource-rich Exclusive Economic Zone (EEZ), in which its vast oil fields are located. With the Liza Phase 1 Development in operation, Phase 2 expected to come online in 2022 and a third development already approved for 2024 start-up, the country’s returns from the sector will increase exponentially.
So far, for 2021, Guyana has received three payments for its oil lifts, US$ 61,090,968 in February; US$ 62,617,616 in April and US$ 79,617,561 in July. That means, just halfway into the year, the offshore oil production has generated some US$203,326,145 for Guyana. This has brought the total oil lift payments since production began to US$388,777,840. When added to the interest and royalties accrued, the total in the country’s Natural Resource Fund—in which the oil revenues are depsoited— now stands at a whopping US$436 million.
The benefits being received by the country, however, go beyond the revenues, with local businesses tapping into the supply chain to provide services to the industry and spearheading projects, which have seen and continue to see increasing employment being created for locals.
2021 so far
The government, this year, commenced the formal pursuit of the gas-to-energy project through a partnership with ExxonMobil Guyana. The project summary has since been submitted to the Environmental Protection Agency. Scoping meetings on the project were also carried out. This gas-to-energy project is expected to slash the cost of electricity by up to 80 percent for domestic consumers. It is also anticipated to give the local manufacturing sector a competitive edge. The project summary also indicated that some 775 jobs would be created by this project—which will see the establishment of an industrial zone at Wales on the West Bank of Demerara, where a number of other production plants will be constructed.
ExxonMobil’s Project Environmental and Regulatory Manager, Erik DeMicco has gone on record as saying, “We’ll look at, very importantly, employment and livelihoods and will make sure that during the project…we provide chances and opportunities for Guyanese to actually participate in the construction of this project, as well as the operation of this project.”
The prime contractors in the industry have also undertaken investments, which have resulted in spin-off benefits for Guyanese. On June 5, 2021, Saipem—with 80 percent of their onshore staff being Guyanese—formally launched their construction yard, creating employment for an additional 50 persons. Meanwhile, Schlumberger—an oilfield services company—will be expanding its fluids laboratory at the Houston Port on the East Bank of Demerara. This would see some 15 to 20 local contractors benefiting from contracts for services such as sourcing of materials, electrical, plumbing, heating, ventilation and air conditioning (HVAC) installation, as well as support in the installation of laboratory equipment. Some US$750,000 is anticipated to be injected into the local economy through said project.
Meanwhile, local businessman and former Chief Executive Officer of the Guyana Office for Investment, Owen Verwey has announced plans to invest some GY$115 million to develop a Laydown / Outdoor Storage Yard for Non-Hazardous Materials at Houston, East Bank Demerara. Verwey had previously disclosed to OilNOW that he decided on the investment after realising that this is a demand in the oil and gas sector which could be fulfilled by a Guyanese.
A similar initiative has been undertaken by Toolsie Persaud Limited, an indigenous company, that is moving to construct a warehouse that would be used for storing and distributing oil-well cement for the offshore petroleum industry. This facility will be developed at Le Ressouvenir, East Coast Demerara and will also create employment opportunities for Guyanese.
One of the most recent project announcements is the Port of Vreed-en-Hoop, located on the West Bank of Demerara, with anticipated job opportunities for 1000 persons. The investment, which is expected to stand between US$200-600 million, will be undertaken by a Guyanese consortium—NRG Holdings Incorporated.
These investment announcements come on the heels of continuous appeals by President Irfaan Ali for Guyanese to invest in the sector, which he had said, is necessary for the development of the country. Without investments, Mr. Ali said, the country will remain poor and vulnerable. “Neither will we miss the opportunity to maximise gains, especially in instances where only a narrow window exists for such gains to be derived. We have to make the best of the best of times,” the President stated.
