By Kiana Wilburg, CEO at Guyana Energy Conference & Supply Chain Expo

While an ExxonMobil-consortium in the Stabroek block has furnished Guyana with a US$2 billion parent company guarantee for oil spills, as well as a US$600 million insurance package, authorities are empowered to ensure all liabilities beyond these are covered.

This was recently noted by Head of the Environmental Protection Agency (EPA), Kemraj Parsram during his appearance on the Energy Perspectives podcast, a programme powered by the Guyana Energy Conference and Supply Chain Expo.

According to Parsram, the Environmental Protection Act is clear about full liability.

“In the words of the Act, it is ‘strict liability.’ What that means is that if you are a permit holder, you are fully responsible and fully liable for any pollution that you cause and that does not have to be proven.”

Expounding on how this translates to securitization, the EPA head said an estimate had to be arrived at, as per the conditions of the law. In this regard, the EPA reviewed guidelines used by the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) as well as authorities in the United Kingdom, USA and Canada.

Parsram said international guidelines require conducting an exercise to arrive at an estimate of the reasonable credible cost of an oil spill. This would then be used as a guide on what the parent company guarantee would be, hence US$2 billion was arrived at for the Stabroek block.

“Now please note that the US$2 billion is the floor. With increasing developments, that estimate can go up. So, it is not the ceiling, it is the floor. Now, let’s say we find the cost is more, there is a clause that says the EPA and the guarantor can negotiate fulfilling that. But irrespective, the polluter stands the full cost,” the EPA head emphasised.

He was also keen to note that the EPA requires ExxonMobil and its partners – Hess and CNOOC – to provide authorities with an annual declaration of their liquidity. This ensures that at all times, the regulator is aware that the companies can cover their liabilities.

As an added layer of protection, he said ExxonMobil and its partners are required to keep a capping stack in country. This device is critical as it stops or redirects the flow of hydrocarbons, buying engineers time to seal the well permanently. ExxonMobil is also required to maintain a subscription to another. Further to this, Parsram said inspections are done on ExxonMobil’s blowout preventers to always ensure their integrity.

On the reporting side, he said there is a requirement for environmental effects monitoring. In this regard, he said ExxonMobil must monitor the effects of its discharges and emissions on water quality and biodiversity.

Overall, he said these are some of the key mechanisms in place to protect Guyana, and which also lend to the EPA’s goal of becoming a world-class regulator.

Foreign Secretary, Exxon Boss discuss Guyana’s sustainable oil operations, local empowerment at Houston event

May 08, 2024

By Kiana Wilburg

CEO Guyana Energy Conference and Supply Chain Expo

Guyana’s Foreign Secretary, Robert Persaud and President of ExxonMobil Guyana, Alistair Routledge participated in a panel discussion on Tuesday titled, “Bridging Oceans: Guyana’s New Horizon” hosted in collaboration with the Greater Houston Partnership and Guyana Business Journal.

The event was held at the Crystal Ballroom At the Rice Tower in Houston, Texas.

Moderated by Wazim Mowla, Associate Director of the Atlantic Council’s Caribbean Initiative, the roundtable discussion also saw participation from John Cypher, VP of International Investment & Trade, Greater Houston Partnership. Also present were Head of the Georgetown Chamber of Commerce and Industry (GCCI), Kester Hutson and Dr Terrence Blackman, Founder of the Guyana Business Journal.

The Foreign Secretary noted that Guyana has come a far way since the first page was written on its oil and gas story in the 90s.

“But where we are going is an even more exciting story,” said the official, adding that the vision for Guyana’s trajectory is perfectly outlined in the Low Carbon Development Strategy (LCDS) 2030.

“Should we hit oil, we have always thought of what model we should emulate…in ensuring that oil is not a curse but a bane of development for traditional industries as well as new ones.

“The activities in the oil sector, and the revenues we make, we intend to use that to create new opportunities while planning beyond its end. And that is captured perfectly in our LCDS …,” the Foreign Secretary said.

During his contribution, ExxonMobil Guyana’s President, Alistair Routledge was keen to note that his company sees the development of Guyana’s hydrocarbon resources as an opportunity to ensure prosperity for all stakeholders involved.

“Since  the discovery of oil in 2015, we have felt a strong connection with the people of Guyana in working towards this goal …and we have US$55 billion in investments for Guyana and have already spent around US$30B,” Routledge said.

The ExxonMobil official also underscored the importance of the company’s commitment to ensuring all Guyanese benefit not just from resource revenue but from opportunities for employment and technology transfer.

He said it was evident in the beginning that Guyana lacked certain capabilities to tackle opportunities in the sector. To overcome those shortcomings, he said Exxon committed to investing in local content to ensure Guyanese are at the forefront of supporting the industry.

“To date, we have had 1,700 local companies supporting the industry and that to me speaks volumes about the entrepreneurial spirit of Guyanese…,” Routledge said. He noted that ExxonMobil remains committed to helping local companies not only thrive but also become globally competitive.

Diaspora support

Foreign Secretary Persaud also noted the invaluable contributions that can be made to Guyana’s development story by members of the diaspora.

He shared that the government is acutely aware of the invaluable expertise and experience that can be tapped in this community, hence there is a more structured approach in engaging remigrants through the Ministry of Foreign Affairs and International Cooperation.

Persaud also noted that the government plans to ramp up engagement with the diaspora through job fairs and other initiatives.

“We also have an incentive regime laid out for this too. But I must say, the diaspora has to be proactive too… come back to your country, don’t wait for someone to hold your hand and bring you; have a positive outlook…,” the Guyanese official said.

He concluded, “There is absolutely no reason why any person in the Diaspora should feel like they can’t play a part in the exciting future ahead of us. What is before us is bigger than any of us can conceptualize.”

By championing local content, Guyana set to triumph with oil and gas -Nestoil Group Chairman

Jun 18, 2024

By Kiana Wilburg

CEO, Guyana Energy Conference & Supply Chain Expo

If Guyanese authorities continue to effectively champion local content, as well as leverage the experiences of nations like Nigeria and Norway, it would be set for triumph with its world class oil and gas resources. This is according to Dr. Ernest Azudialu-Obiejesi, Chairman and CEO of Nestoil Group.

The Chairman and his team that included Tecon Oil, were on a four-day fact finding mission in Guyana from June 9 to 12, 2024, to understand the opportunities that abound. And during his appearance on the Energy Perspective Podcast, powered by the Guyana Energy Conference and Supply Chain Expo, Dr Azudialu-Obiejesi explained that Nestoil has been a major player in Nigeria’s oil and gas industry since 1991.

It is recognized as the largest indigenous engineering, procurement, construction, and commissioning company for major international oil and gas companies in Sub-Saharan Africa. Nestoil is also renowned for redefining industry standards in pipeline construction, repairs, and maintenance.

With Guyana expected to host over US$55 billion in investments across six projects in the ExxonMobil-led Stabroek Block, the Chairman underscored the importance of ensuring that Guyanese capture a portion of that expenditure. He insisted that championing local content and its associated legislation allowed for his company to become what it is today, adding that the same can happen for many Guyanese.

“The local content initiative or the laws in Nigeria helped Nigerians to be part of the oil development and also to make sure investments that happen over the years permeate throughout Nigeria…Nestoil was one of the companies at the forefront of local content,” shared Dr. Azudialu-Obiejesi. As a result of this, he noted that Nestoil was able to move from being a service company to now an exploration and production company.

“We have producing fields and there is no way we would have been able to achieve that feat without Local Content Laws that protect the indigenous people and ensure their participation in the oil and gas business…,” said the Chairman.

Dr. Azudialu-Obiejesi was keen to note his optimism that Guyana will be replicating such an approach to ensure locals are able to participate as much as possible and even become exploration and production giants soon enough. At the same time, he warned that there are a few pitfalls of which authorities should be mindful.

He said, “The government has to look at the availability of funding to ensure that the locals are empowered, that funds are made available for them to participate…they also have to ensure that the training programmes of oil companies incorporate locals to ensure they are able to participate…”

Dr. Azudialu-Obiejesi added, “Guyana needs to make sure what we call CapEx (capital expenditure) permeates through the economy and it touches the lives of the people of Guyana…The government should also ensure that the people are prepared for the offshoot of services such as those in tourism and technology that come from oil and gas development…”

Overall, the Nestoil Chairman categorically stated that Guyana is well positioned to succeed with oil and gas. By championing local content, ensuring the requisite laws are enforced, and learning from the missteps of Nigeria and other nations, he believes the country will truly realize its potential to become one of the biggest oil and gas players in South America, and the region by extension.

‘Significant discovery’ at Lancetfish-2 oil well

Oct 26, 2023

See below full statement issued by the Ministry of Natural Resources:

The Ministry of Natural Resources (MNR) is pleased to announce that the Lancetfish-2 appraisal well in the Stabroek Block has resulted in a significant discovery.

This marks the fourth offshore discovery in Guyana for the year 2023 and brings the total number of discoveries from 2015 to date to a total of 46.

The earlier discoveries made in 2023 include Fangtooth SE-1 and Lancetfish-1 in the Stabroek Block, as well as the Wei-1 discovery in the Corentyne Block.

The Lancetfish-2 discovery in the Liza Petroleum Production License area has unveiled an estimated 20 meters of hydrocarbon-bearing reservoir, along with approximately 81 meters of additional hydrocarbon-bearing sandstone.

This newly discovered reservoir will undergo a comprehensive appraisal process, which aligns with the ongoing appraisal activities for other discoveries in the region.

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