Wednesday, September 22, 2021

Report on QC Alumni Association Oil and Gas Symposium, by Dr. Terrence R. Blackman

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By Terrence R. Blackman, Ph.D. – OilNOW

Part 1

On June 09, 2021, ExxonMobil announced newly identified, high-quality hydrocarbon-bearing reservoirs below the original Longtail-1 at Longtail-3 offshore Guyana. The well, located approximately two miles (3.5 kilometers) south of the Longtail-1 well, was drilled in more than 6,100 feet (1860 meters) of water. This announcement has brought into sharper focus the ideas emerging from the recently concluded Memorial Day Weekend symposium on Navigating the Opportunities and Imperatives in Guyana’s Oil and Gas Economy, presented by the Queen’s College of Guyana Alumni Association, NY Chapter (QCAANY).

QCAANY, the New York Chapter of the Queens College of Guyana alumni association, is a registered non-profit corporation incorporated for thirty (30) years. Its mission is to further Queen’s College, Guyana’s interests, and ensure its continued high contribution to education in Guyana. QCAANY has done this by way of scholarships to high-performing students and scholarships to financially challenged students. In addition, the group has conducted programs such as summer math camps and student conferences aimed at better preparing Queen’s College students for the world after graduation.

QCAANY’s President, Mr. John Campbell, in his opening remarks, noted that the organization is also engaged in fostering constructive civic engagement on matters of public interest throughout the Guyanese diaspora and that Guyana’s emergence as a major oil-producing nation and the potential positive transformative impact on the lives of Guyanese in education, healthcare, infrastructure, and much more that this development portends necessitated the presentation of the symposium. He noted that Guyanese are concerned by the numerous unanswered questions surrounding the exploitation of this resource and the possible challenges that the nation will encounter along this developmental path and that the symposium was a forum in which Guyanese nationals and other interested parties of all backgrounds could participate in a forward-looking conversation to position Guyanese at home and in the diaspora to take advantage of the emerging oil and gas opportunities. The symposium, he noted, would outline strategies for mitigating the potential challenges for private investment and business opportunities, workforce development and training, local content imperatives, diasporic engagement, and environmental health and safety.

The first panel focused on opportunities. The panelists were Dr. Dennis Pieters and Mr. Fareed Amin, and the moderator was Mr. Aftab Karimullah. The second panel focused on the imperatives consisted of Mr. Edwin Callender and Ms. Abbigale Loncke. Ms. Rosalind McClymont moderated the discussion.

In Part I of my Report from the symposium, I will speak to the contributions of Dr. Dennis Pieters, an international Reservoir Engineering consultant, professor, and author who currently serves as a Director of Mid-Atlantic Oil and Gas Inc., in Georgetown, Guyana. Dr. Pieters obtained his Ph.D. in Petroleum Engineering from the Colorado School of Mines and is a Queens College of Guyana alumnus. Over the past forty (40) years, he has held a series of staff engineering, consultant, and management positions in the United States and internationally with Amoco, Saudi Aramco, Shell Oil, and Halliburton. In addition, he has managed horizontal well engineering teams in Siberia and served as a Subject Matter Expert for the U.S. Army Corps of Engineers on location in Iraq. Dr. Pieters has taught reservoir engineering and economics in Saudi Arabia and the United States. He is the author of numerous scientific papers and a book on oil and gas decision-making.

Dr. Pieters began his presentation by sharing a Guyana Basin Regional shelf to basin geologic cross-section with the audience. This innovative framing for the presentation provided the audience a geographic perspective of the seafloor, the layout of the various blocks, and an overview of Guyana’s opportunity. This overview also highlighted many of the obvious environmental risks.

To better understand the context of oil and gas exploration in Guyana, imagine yourself starting at the Seawall and walking into the Atlantic Ocean. For the first 50 to 100 miles, the water is relatively shallow with depths no more than 300m, after which there is a steep drop, and we encounter depths that exceed 1000m. Along this walk, we first encounter, in the shallow waters, Total’s Arapaima I, drilled in 1990. Unfortunately, the offshore Arapaima-1 well proved to be non-commercially viable. A little further on, we come upon Tenneco’s Guyana Offshore II. The first company to drill a well was Tenneco, which spudded the Guyana Offshore #1 and #2 wells in 1967, the year after Guyana achieved independence. Further along, we arrive at Shell’s Mahaica I and II, drilled in 1974 and 1976. Unfortunately, they were both abandoned dry. We next find Shell’s Abary I, unsuccessfully drilled in 1975, and Shell’s Berbice I and II drilled in 1971 before encountering Exxon’s Liza 1, successfully operating in waters of depths of close to 2700m!

Dr. Pieters noted for the audience that, in its basic structure, the historical and geographic imperatives made the Guyana opportunity a high-risk, capital, and tech-intensive endeavor. To amplify this point, Dr. Pieters outlined the various formations that make up the seafloor, i.e., The Corentyne, Pomeroon, Georgetown, New Amsterdam, Canje, Potoco, and Stabroek formations, which descend to a depth of more than 5000m from the seafloor. He noted that the oilfields being exploited in Liza 1 operation are in the Maastrichtian Campanian New Amsterdam formation more than 2500m below the seafloor! These reservoirs were deposited as deepwater turbidites from sediment brought from onshore by the Berbice and Essequibo rivers to the slope and basin offshore Guyana and charged with oil that migrated from the Canje source rock. It is the mud that has given us the Oil today. Thus, Deepwater Oil and Gas exploration can reasonably be said to approach the complexity of space exploration in terms of its economic and technical challenges. Implicit in the geographical understandings are the environmental and ecological challenges that the region faces from an oil or gas leak from an underwater pipeline in the Atlantic, as has recently occurred in the Gulf of Mexico, leading to a raging fire on the ocean’s surface.

Dr. Pieters then delineated for the audience the division of the Oil and Gas industry into three major areas: upstream, midstream, and downstream operations. The upstream aspects of the industry refer to opportunities related to exploration, drilling, and producing, i.e., bringing crude oil and natural gas to the surface. Midstream Oil and Gas opportunities are those related to the transportation of crude oil and the liquefaction and transportation of natural gas, and downstream options are those which accompany the processing of crude in a refinery. Dr. Pieters noted that Oil and Gas activities in Guyana currently consist primarily of upstream activities. He delineated five (5) significant upstream areas: Exploration, Appraisal, Development, Production, and Abandonment and noted that Guyana’s Oil and Gas efforts currently center on the first four areas. He opined that local efforts to engage the industry should focus on drilling and production opportunities. He noted the need for drill crews, seismic crews, and the expertise for building ground structures. In support of local content efforts, Dr. Pieters remarked: “Don’t confuse local content with just filling a percentage workforce with Guyanese. This is not about numbers; this is about investing in assets, investing in people, the long-term benefit for Guyana and the Guyanese people”, as he noted the need for Engineers and other Service Technicians to support the Exploration, Appraisal, Development, and Production efforts. One notes that while there is currently a heavy focus on highly specialized jobs like petroleum engineers, the reality is that there will be significant, and longer lasting more demand for other less specialized jobs like accountants, lawyers, structural engineers, and welders to support the emerging Oil and Gas industry.

One of the highlights of Dr. Pieters’ presentation was his discussion of the Liza Destiny FPSO. Liza Destiny is the floating production system that receives fluids (crude oil, water, and a host of other things) from a subsea reservoir through risers, which then separate fluids into crude oil, natural gas, water, and impurities within the topsides production facilities onboard. Liza Destiny, built in Singapore, requires five support vessels, and its attendant shore base operations require a significant number of support personnel. As an example, for the Lisa 1 Development, the FPSO is the control center for the seventeen wells drilled (of which eight are producers), six water injectors, three gas injectors, and various flowlines, pumps, and compressors that make up the operation. Liza Destiny can produce up to 120,000 barrels of oil per day. In addition, it has an associated gas treatment capacity of approximately 170 million cubic feet per day and a water injection capacity of nearly 200,000 barrels per day. The FPSO is moored in a water depth of 1,525 meters and can store 1.6 million barrels of crude oil. Liza Destiny is 334 m long, 58 m wide, and 31 m deep, i.e., the size of three football fields that can hold 20,000 mini-buses! Around 80 people work on the vessel during operation, and the FPSO can accommodate 120 workers.

Dr. Pieters reiterated the need for Guyanese to focus on the workings and function of the FPSO as an entry point for engagement with the industry. He closed his presentation by addressing the opportunities protecting the environment and promoting the sustainable use of Guyana’s Oil and Gas resources. He reminded the audience that Guyana is unique in that 85% of the land is virgin rainforest and called for economic policies that support a stable and diverse economy. Dr. Pieters articulated the critical importance of Guyanese developing the infrastructure to protect and enhance the quality of the air, water, land, native vegetation habitat areas, fish and wildlife, and other natural resources. He noted the need for local skills to monitor the industry and a baseline local flora and fauna database. Finally, he amplified the need to build communities around environmental and resource stewardship that enhanced the social benefits of the Oil and Gas industry for all Guyanese.

In keeping with this theme, In Part II of the Report from the Symposium, I will discuss the presentation of Edwin M. Callender, Attorney & Energy consultant of the Callender Law Firm in Houston, Texas. Attorney Callender’s presentation focused on optimizing the exploitation of Guyana’s Oil & Gas resources for the maximum sustainable benefit of the Guyanese People. We will explore these strategies in my next Report from the Symposium: Navigating the Opportunities and Imperatives in Guyana’s Oil and Gas Economy, presented by the Queen’s College of Guyana Alumni Association, NY Chapter (QCAANY).

About the Author

Dr. Terrence Richard Blackman is a member of the Guyanese diaspora. He is an associate professor of mathematics, and a founding member of the Undergraduate Program in Mathematics at Medgar Evers College. He is a former Dr. Martin Luther King Jr. Visiting Professor at MIT and a Member of The School of Mathematics at The Institute for Advanced Study. He previously served as Chair of the Mathematics Department and Dean of the School of Science Health and Technology at Medgar Evers College, where he has worked for more than twenty-five years. He’s a graduate of Queen’s College, Guyana, Brooklyn College, CUNY, and the City University of New York Graduate School.

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