Guyana President Dr. Mohamed Irfaan Ali has launched Guyana’s competitive bid round for 14 offshore oil blocks, comprised of eleven shallow water blocks and three ultra-deepwater blocks.
Officially open today, December 9th 2022, the bid round is expected to be open for 4 months and will close on April 14th 2023.
With the massive potential for “25 billion barrels”, President Ali outlined that evaluations of the proposals will take place and following an expedited negotiation period, awards of blocks are expected in Q2 2023.
Minister of Natural Resources Vickram Bharrat is expected to publish a notice in the Official Gazette in keeping with the Petroleum Act.
Guyana has seen extraordinary success with offshore discoveries in the last 5 years. The country continues to grow and expand the opportunities to increase production and the inflow of investment into the energy industry and other sectors. The largest upstream player to date has been Exxon, who produces more than 340,000 barrels of oil per day from two FPSOs. The company has had significant success in Guyana and indicates that additional FPSOs are already in development for future projects.
The government has made it clear in the past that the industry must be to the benefit of all Guyanese citizens. At the launch of the bid round, President Ali, stated, “We are hoping that there will be maximum participation and that Guyana would be part of a partnership that creates greater benefit and greater wins for our country and our people.”
Improved fiscal terms have been outlined that provide greater balance of the share of revenue between the government and contractor, while maintaining Guyana’s competitive edge in the region globally.
The International Energy Conference and Expo will take place from February 14-17 2023 at the Guyana Marriott Hotel. At the conference there will be keynote addresses by the leadership of the country including: His Excellency Dr. Mohamed Irfaan Ali, President of Guyana, Prime Minister Mark Anthony Phillips, Vice President, Dr. Bharrat Jagdeo and Minister of Natural Resources, Vickram Bharrat.
At the conference we will also hear from senior experts in Guyana’s oil and gas sector, including John Hess, Chief Executive Officer, Hess and Alistair Routledge, President, ExxonMobil Guyana.
Hess Corporation and the Government of Guyana announced an agreement for Hess to purchase high quality carbon credits for a minimum of $750 million between 2022 and 2032 directly from the Government of Guyana.
Carbon credits are mechanisms used to reduce CO2 emissions. Carbon credits are generated by the avoidance of CO2 emissions. Guyana’s extensive natural rainforests provide an avenue to remove substantial quantities of CO2 from the atmosphere.
This agreement will serve to support Guyana’s efforts to protect the country’s vast forests and provide capital to improve the lives of Guyana’s citizens through investments made by the Government as part of Guyana’s Low Carbon Development Strategy (LCDS) 2030.
If you would like to learn more about Guyana’s Low Carbon Development Strategy click here:
Guyana’s President, His Excellency Dr. Irfaan Ali stated, “In 2009, Guyana produced the first low carbon development strategy from a developing country. As one of only nine national jurisdictions in the Amazon Basin, we said long ago that national or jurisdiction-scale action on forests, coupled with access to global private finance, could create solutions that benefit the peoples of forest-rich countries while also achieving global climate goals.”
President Ali was joined by Vice President, Dr. Bharrat Jagdeo and John Hess, CEO of Hess Corporation for a signing ceremony to commemorate this historic agreement.
The multi-year agreement is for 37.5 million REDD+ jurisdictional carbon credits (current and future issuances). These credits will be on the ART (Architecture for REDD+ Transactions) registry and will be independently verified to represent permanent and additional emissions reductions under ART’s REDD+ Environmental Excellence Standard 2.0 (TREES).
Avoiding global deforestation is foundational to the Paris Agreement’s aim of limiting the global average temperature rise to well below 2°C and was one of the major commitments made at the COP26 climate summit, where more than 130 countries, including Guyana, pledged to end deforestation by 2030.
Guyana’s more than 18 million hectares of forests are estimated to store approximately 20 billion tonnes of carbon dioxide equivalent. Through Guyana’s Low Carbon Development Strategy 2030, the country has a roadmap for preserving its forests, while growing its economy and creating a development pathway that is diverse and includes opportunities for all Guyanese citizens.
The purchase of these carbon credits is an important part of Hess’ commitment to support global efforts to address climate change and for the company to achieve net zero greenhouse gas emissions by 2050. The agreement adds to the company’s ongoing and successful emissions reduction efforts, which are described in Hess’ annual Sustainability Reports.
If you would like to learn more about Hess’ sustainability reports, you can click here:
Canadian based CGX Energy along with Frontera Energy Corporation have indicated their readiness to spud (begin drilling) the Wei-1 well in the Corentyne block offshore Guyana.
The partners have issued a press release stating their commitment to drill the Wei-1 well and that final preparations are complete in advance of spudding the Wei-1 well.
The well will be spudded no later than January 31, 2023 utilising the NobleCorp Discoverer semi-submersible mobile drilling unit.
The Wei-1 well will be located approximately 14 kilometres northwest of the Kawa-1 exploration well in the Corentyne block, approximately 200 kilometres offshore from Georgetown, Guyana
To go alongside this activity, CGX intends to support the Government’s effort to accommodate increased vessel activity in Guyana. According to a statement from the partners, in-river construction activity has begun for a deepwater port at Berbice.
Work has already begun at the Berbice Deepwater Port (BDWP) on a 50 x 12 metre access trestle from the quayside yard westward into the Berbice river, together with the necessary dredging of the river.
Construction of the wharf, perpendicular to the trestle, will follow.
The cargo terminal aspects of the BDWP are targeted to commence in mid-2023 and operation of oil and gas support base in late-2023, subject to construction schedules and supply chains.
In collaboration with the Government of Guyana, CGX has shifted the immediate focus of the Port to service expected demand for aggregates and building materials to support the Government’s infrastructure development in Berbice which must be imported into the region from elsewhere in the country and offshore.
Photo credit: www.noblecorp.com
The Government of Guyana through the Ministry of Natural Resources has announced that BP International Limited has been selected to market Guyana’s share of petroleum from the Liza Destiny and Liza Unity floating production storage and offloading (FPSO) vessels.
The award for the contract comes after the completion of a competitive procurement process launched by the Ministry of Natural Resources. The Ministry opened a Request For Bids from September 16, 2022 to October 11, 2022 after the previous marketing contract with Aramco Trading Limited ended.
According to DPI, fourteen (14) bids were received by the National Procurement and Tender Administration Board (NPTAB).
The procurement board appointed an Evaluation Committee to review the bids. After the evaluation, BP International was recommended by the committee. The recommendation was was cleared by NPTAB and received Cabinet’s ‘no objection’.
The duration of this contract will be for twelve (12) months.
The marketer will provide the following services:
- Provide support and guidance to the Government of Guyana in all operating and back-office responsibilities of managing the crude sales and each individual lift whilst facilitating timely and cost-effective crude operations;
- Support the government in the continued introduction of the grade to multiply geographies and refinery systems, and provide benchmark and performance comparisons of prices paid for Guyana’s crude;
- Work closely with the government to understand the behaviour and yields of the Liza blend and how these can affect pricing differentials.
The Guyana Government has indicated that it will continue to employ transparent and international best practices in the management of the nation’s petroleum resources so as to attain maximum returns and advance the livelihoods of all citizens.
Photo credit: www. bp.com
ExxonMobil Guyana renews sponsorship of Energy Conference for second edition in 2023
– Government welcomes the International Energy Conference and Expo 2023” says Natural Resources Minister
The International Energy Conference and Expo Guyana 2023 (IECEG 2023) today announced ExxonMobil Guyana as the premier sponsor of the second edition of the Conference & Expo.
Commenting on the sponsorship, President of ExxonMobil Guyana, Alistair Routledge said, “The event’s theme, ‘Harnessing Energy for Development’, aligns with our commitment to sustainably produce energy and products to meet society’s needs in a manner that protects people, the environment and communities where we operate.”
Routledge added, “Guyana is a thought-leader on low carbon development with an ambitious strategy to secure growth and prosperity for current and future generations. These credentials, I believe, put Guyana in the driver’s seat on energy issues regionally if not globally, and the International Energy Conference is an ideal platform to learn of developments and engage in the debate. ExxonMobil Guyana is proud to be associated with this event and is excited to be part of the transformational journey taking place in Guyana.”
The Conference, which is expected to assemble policymakers, academics, industry professionals and entrepreneurs from around the world, will again see the participation of Heads of State and Government, and global energy thought-leaders, most notably, Professor Jeffrey D. Sachs, world-renowned economics professor, bestselling author, innovative educator, and global leader in sustainable development.
In acknowledging the sponsorship from ExxonMobil Guyana, Kurt Baboolall, Chief Executive Officer of the International Energy Conference and Expo Guyana said, “We are grateful for the sponsors and exhibitors who are committing resources to supporting the conference and driving the energy conversation.”
Baboolall added, “ExxonMobil, as is demonstrated in Guyana, is an unparalleled leader in energy development today and remains committed to meeting current and future needs for development. The rapid development of energy resources being undertaken by ExxonMobil Guyana has positioned Guyana in the middle of the current global discussions.”
At full capacity, this year’s conference will feature 35 sponsors, 300 exhibitors, and 1200 delegates. Over 60% of all places have been taken and the remaining openings have become extremely competitive to secure.
Minister of Natural Resources, Hon. Vickram Bharrat, who attended the announcement, signalled Government’s continued support of the Conference and Expo saying that “The Government welcomes the International Energy Conference and Expo 2023, this is the second energy expo in Guyana showcasing the opportunities and what Guyana has to offer to the world. Guyana of course is one of the newest oil producing countries in the Latin America and Caribbean region, and we have been moving at an unprecedented rate in developing our oil and gas sector and at the same time we have been incentivizing and working towards developing the traditional non-oil sectors.”
Minister Bharrat further explained, “[The IECEG] It’s not just about showcasing Guyana as an oil producing country but showcasing Guyana as an investment destination, a land that offers many opportunities across all sectors.”
The Conference and Expo is now entering its second year under the theme ‘Harnessing Energy for Development’ and will be held from February 14-17, 2023 at the Guyana Marriott Hotel, Georgetown, Guyana.
The registration portal for the conference and expo can be found on the conference website, www.guyanaenergy.gy. Pre-registration is now open for sponsors, exhibitors, in-person attendees, virtual attendees, workshop participants, and members of the media, all being done online.
According to estimates by the WorldBank and International Monetary Fund( IMF), Guyana, one of Latin America’s smallest countries is set to post the world’s highest GDP growth. For several years, since the production of crude oil begun through Exxon’s Liza development, the country has outpaced global growth averages.
It is projected that at the end of 2023 Guyana’s GDP growth rate will be close to 100% compared with 2021 figures. According to IMF estimates, Guyana will grow 57.8% this year and 25.2% next year, resulting in a GDP increase of around 97.6% in two years. Meanwhile, the World Bank forecasts an increase of 47.9% for 2022 and 34.3% for 2023. This equates to a 98.6% GDP jump over the two-year period.
In comparison the IMF reports the Latin America and Caribbean average is approximately 3.5% in 2022 and 1.7 in 2023.
Bloomberg’s radio show featured an episode titled, “Guyana is the most exciting story in the world oil market”. In the episode, hosts shared the story behind Guyana’s meteoric rise in GDP growth and shared that since 2015 one in every three barrels of oil discovered has been in Guyana. You can listen to the full episode here.
In the energy industry Guyana continues to be one of the most prolific provinces in the world and the Government in Guyana has consistently reiterated that the people of Guyana must benefit from the hydrocarbon sector. The International Energy Conference and Expo will play part in highlighting these issues. The theme for the conference in 2023 is Harnessing Energy for Development.
The Government of Guyana has paved the way for the gas to shore project to come to life by 2024. The Cabinet today issued a “no objection” to the construction of the first of its kind facility in Guyana. The project includes the construction of a 300mw combined cycle power plant and natural gas liquids facility.
This breakthrough decision will now permit negotiations to begin in earnest between the government and the winning bidders CH4/Lindsayca — with a goal to have the terms of the agreement finalized by the end of this month.
This is a significant breakthrough for the project. Earlier this year at the inaugural International Energy Conference and Expo Guyana, focus was placed on Charting a Sustainable Energy Future. The gas to shore initiative will be a critical component to getting there.
H.E. President Ali made it clear at the event that the offshore gas drilling taking place at breakneck pace must benefit the Guyanese people as a whole and not just those connected to the business. This project will lead to lower energy costs significantly while maximizing the use of by-products from drilling.
In his announcement today Dr. Ali said “a family at the end of this project that now pays $20,000 per month in light bill or electricity costs will see that cost coming down to $10,000.”
SBM continues its relationship with ExxonMobil through the signing of a new MOU.
SBM Offshore has announced the signing of a Memorandum of Understanding (MOU) with ExxonMobil Guyana for construction of a multi-purpose floater hull for use on a future floating production storage and offloading (FPSO) project.
ExxonMobil and SBM Offshore have a long history of working together, with multiple FPSO projects underway.
Exxon has previously indicated that at least six FPSOs will be in service by 2027. They have also signaled that the resource base in Guyana has the potential to support up to 10 FPSOs.
MODEC has announced that it has signed a contract to perform Front End Engineering and Design (FEED) for a Floating Production, Storage, and Offloading vessel (FPSO) for the “Uaru” development project. The FEED contract award relates to the initial funding by ExxonMobil’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL), to begin FEED activities related to the FPSO design and to secure the second M350TM hull for FPSO service.
Following FEED and subject to government approvals in Guyana of the development plan, project sanction including the final investment decision by ExxonMobil and EEPGL’s release of the second phase (EPCI) of work, MODEC is expected to construct the FPSO and install it in Guyana. MODEC is also anticipated to operate the FPSO for an initial duration of 10 years, with potential options for continuation.
MODEC will design and construct the FPSO based on its M350 new-build design. Uaru will be the second M350 hull used for FPSO service. The FPSO will be designed to produce 250,000 barrels of oil per day and will have an associated gas treatment capacity of 540 million cubic feet per day and a water injection capacity of 350,000 barrels per day.
The FPSO will be installed in a water depth of about 2000 meters using a SOFEC Spread Mooring System and will be able to store around 2 million barrels of crude oil.
“We are extremely honored and proud to be selected to provide the FEED services for an FPSO for the UARU project,” commented Takeshi Kanamori, President, and CEO of MODEC. “We are equally proud of our robust track record of successful project deliveries in the South America region, and we look forward to cooperating closely with the client and its partners to make this project a success.”
Globally gas prices are an increasing burden to the motoring public however, in Guyana consumers will be seeing a further reduction in the prices at the pump in the near future.
The Guyana government through the Ministry of Finance has effectively reduced the cost of gasoline and diesel from the Guyana Oil Company Limited (GUYOIL) in a bid to bring further relief to consumers across the country.
Senior Minister in the Office of the President with responsibility for Finance, Hon. Dr. Ashni Singh announced on behalf of the Government a reduction of gasoline and diesel prices at the pump to be charged by the Guyana Oil Company Ltd (GUYOIL).
The prices at the pump charged by GUYOIL will be reduced as follows: gasoline prices reduced by 20 percent from $269 per litre to $215 per litre; and diesel prices reduced by 15 percent from $265 per litre to $225 per litre.
According to a press release, the Ministry of Finance indicated that during the first half of 2022, global oil prices surged more than 50 percent, increasing from US$77 per barrel at the end December 2021 to US$120 in June of this year; having risen as high as US$137 per barrel primarily because of the Russian invasion of Ukraine. The impact of the dramatic increases in oil prices were significant and given the interconnected nature of the global economy, translated into higher cost of landing fuel in Guyana.
The press release states that, to mitigate the impact of rising global fuel prices on domestic consumers and the productive sectors to which fuel is a key input, the Government lowered the Excise Tax rate on both gasoline and diesel from 10 percent to 0 percent in March of this year. It would be recalled that, previously, during the Budget 2022 presentation, the Government lowered the Excise Tax on both gasoline and diesel from 20 percent to 10 percent to minimize the impact of rising global oil prices.
The Government has been progressively lowering the Excise Tax rate on both gasoline and diesel, from 50 percent to 35 percent in February 2021, 35 percent to 20 percent in October 2021, in keeping with Government’s policy to adjust the taxes on fuel, to mitigate the impact of rising fuel prices on the world market.
Since resuming office in August 2020, the PPP/C Government has implemented a suite of measures to ease cost of living pressures and to improve disposable incomes. In an ongoing effort to address these issues head-on and to mitigate the effects of rising prices globally on all Guyanese citizens.
The reduction in excise taxes is one such of several measures implemented by the Government since assuming office.