Tuesday, November 29, 2022

Shifting the tsunami of oil investments to Regions Three and Six in Guyana

Must Read

OilNOW
OilNOW is an online-based Information and Resource Centre

In just seven years, Georgetown has morphed into the oil capital of the country. Within its borders are several major shore base facilities such as G-Port and the Guyana Shore Base (GYSBI). It is also home to the headquarters of the Stabroek Block operator, Esso Exploration and Production Guyana Limited, and its partner CNOOC Petroleum Limited.

The epicentre of the oil industry is also overflowing with multiple investments not just for support services, but also for sectors like tourism which has seen an uptick in hotel construction. The oil boom also has several categories of skilled labour supply in the city nearing their apex.

To address this overconcentration of wealth and opportunities, the government has been noticeably driving the tsunami of oil investments to other parts of the country, specifically to the Essequibo Islands-West Demerara (Region Three) and East Berbice-Corentyne (Region Six). The regions are host to over 200,000 Guyanese.

In Berbice, historically home to major sugar estates, a pillar sector for the Guyanese economy, there are three key developments that are set to transform its economic geography. The government has announced plans for a 30,000 barrels per day (bpd) refinery. Construction work on the facility, to be located on public land near the Berbice River, is expected to begin by the first half of 2023 with project completion two years after. Requests for Proposals to design, finance, and build the facility are due in mid-December. This project will no doubt, open opportunities in transport and logistics, the service industry, the construction industry, the rental industry, and much more.

The government has also announced the transformation of the Port Mourant Training Centre into the country’s National Oil and Gas Institute. Part of that multi-million-dollar establishment will also provide training for hospitality.

There is also the imminent Deepwater Port being constructed by Canadian company, CGX Energy Inc., through its subsidiary Grand Canal Industrial Estates Inc. (GCIE). It is being developed on 30 acres of land on the eastern bank of the Berbice River. The Deepwater port facility is expected to serve as an offshore supply base for the oil and gas industry and as a multi-purpose terminal cargo handling base to service agricultural imports and exports as well as containerised and specialised cargo. It would also enable the provisioning of operators and vendors in the territorial waters of both Guyana and Suriname.

The West Bank of Demerara is poised to be the home of Guyana’s historic Gas-to-Energy project which will land in Wales. The project is being pursued by ExxonMobil and the government. While the government is responsible for the construction of the onshore plants, Exxon is responsible for building the pipeline and associated facilities to support the transportation of gas from the Liza field to the Wales Development Authority, where the natural gas liquids (NGL) and power plant facilities will be built. It is poised to come on stream in 2024 and slash electricity costs by 50%. The project holds the key Guyana needs to unlock the growth potential of its agriculture, manufacturing, and construction industries.

There is also the development of the massive Vreed-en-Hoop Shore Base, the brainchild of three experienced Guyanese businessmen, namely Azruddin Mohamed of Hadi’s World Incorporated; well-known businessman and miner, Andron Alphonso; and National Hardware Guyana Limited owner, Nicholas Deygoo-Boyer. The trio has established the consortium – NRG Holdings Inc. and has partnered with Jan De Nul (a Luxembourg entity that specialises in offshore services) to execute the GY$60 billion project. Its construction phase alone is set to create some 300 jobs.

Vice President, Dr. Bharrat Jagdeo recently disclosed that part of the administration’s blueprint for ensuring Guyana’s oil wealth is felt by all, is to have the hydrocarbon industry stimulate new growth poles outside the city.

Though there have been a few difficulties in realising the deepwater port in Berbice, Jagdeo has said the government intends to push through with making this a reality since the benefits for trans-border development between Guyana and Suriname are immense. At a press conference less than two weeks ago, the former President said the port can clearly be a growth pole for the region.

For the West Coast and West Bank of Demerara, he said it is the government’s intention to shift some of the development across the river from Georgetown, to diversify and fortify its economic interests which are currently deeply rooted in agriculture.

With the GY$52 billion (US$260 million) contract signed for the construction of the new Demerara River Bridge and the Vreed-en-Hoop port in the works, Jagdeo said businesses would be extremely incentivised to take their operations to the west as the logistics chain would be substantially improved.

He said too that government is also interested in channelling the oil boom to Region Five (Mahaica Berbice). One of the ways he envisions this being catered for is by improving the road networks there with four-lane highways and removing choke points where needed.

Importantly, the government has also announced that plans are in place for the construction of a new Berbice bridge and Corentyne River bridge (Suriname/Guyana) which will lay the framework for a new duty-free zone.

The administration has also revealed its plans to have a new stadium that will be built to International Cricket Council (ICC) standard, a new mall, hotel, and recreational centre, all of which will be situated at Palmyra, Berbice.

CONCLUSION

It is evident that the government is keen on using the oil and gas resources as a springboard for modern development in the outskirts of the country’s densely populated city. This is necessary to ensure Guyana does not widen the gap between the rich and the poor, or the city and its coasts.

It is also in keeping with the Vice President’s and the Head of State, Dr. Mohamed Irfaan Ali’s vision for Guyana to be a model state on not just oil development, but food security, agriculture, education, and technology.

The country’s leaders are demonstrating that they have the foresight and will to simultaneously tackle a multiplicity of issues to ensure the next generation is effectively prepared to take over the oil sector mantle.

Indeed, the stage is being set, and exceptionally so, for Regions Three, Six, and Five to be the new centrepieces of Guyana’s economic transformation with oil.

About Energy Insights

From the people who bring you day-to-day coverage through OilNOW – the Caribbean’s premier oil, gas and energy information service – the Energy Insights column offers perspectives and analyses on the evolving energy sector in the South American/Caribbean region, and further afield.

spot_img

Latest News

Canada could be next country to waive visa requirements for new oil producer Guyana

Partnerships between Guyanese businesses and their Canadian counterparts are on the increase. So, discussions have commenced for these trade relations to deepen...

More Articles Like This

spot_img