With an expanded focus and already a premier event in the region, the third edition of the Guyana Energy Conference and Supply Chain Expo will attract participation, at the highest level, from more than 21 countries and will see 19 sectors – outside of the energy sector – involved. Kurt Campbell reports…

US$20m petroleum training facility launched

Sep 11, 2022

Prime Minister, Brigadier (Ret’d), the Honourable Mark Phillips, said the Government intends to continuously bolster investments in human capital to build local content capacity and foster a sustainable future for all Guyanese.

He made the remarks while attending the official launch of the US$20m 3T EnerMech Guyana Training Centre of Excellence and graduation ceremony at the company’s headquarters in Lusignan, East Coast Demerara.

The launch of the petroleum training facility, the Prime Minister noted, would enhance Guyana’s human resource development.

“A crucial factor to the success of our nation lies in our people. We must ensure that we utilise the benefits of the oil and gas sector to build a bright future for this, the next generation of Guyanese and beyond. To do that, we must undertake a culture of ownership, a culture where our local content – our people – can thrive and that includes within the workforce itself.”

The training facility, Guyana’s premier in-country, state-of-the-art facility is a collaborative venture between 3t EnerMech, Orinduik Development Incorporated and Windsor Technologies.

Persons will be taught through blended learning software and technology, and via fully immersive simulators for high-hazard activity learning.

CUTTING EDGE DEVELOPMENT

Prime Minister Phillips, during his address, lauded the drive and innovation of the facility and those responsible for its establishment.

“As the first entity with approval to deliver OPITO (Offshore Petroleum Industry Training Organisation)-accredited training to the oil and gas sector in Guyana, our human resources are now strengthened at a global standard to actively and competently participate in the building of this new and abundant area of the country. With an industry that requires high skills and knowledge, it is reassuring to know that these capacities can be imparted to our people without having to leave their home soil.”

LOCAL CONTENT AT WORK

The Senior Government Official added that the “benefit of strong partnerships can never be understated, for these are the binds that allow goals that may otherwise seem unattainable to be achieved”.

He said that the Government would collaborate with 3t EnerMech to offer a blended technical and vocational training programme for Guyanese interested in careers in the oil and gas industry through the Guyana Online Academy of Learning (GOAL).

“Our Government has continually engaged in the training of our workforce to be able to occupy positions in the oil and gas sector and contribute to the building of this sector, which extends to the development of Guyana. In the past, much of this training was conducted away from home, but today, and from hereon, our people will be able to access such training right here in Guyana.”

In conjunction with the launch, the graduation ceremony, for the first group of students, was also held.

To this end, the Prime Minister charged the graduates to put their skills to use.

“I congratulate the first cohort of participants who underwent training at this facility. May you take your skills and put them to their fullest use as you proceed in your daily tasks of helping to build a better Guyana.”

He said that as a people, Guyana’s success depends on proper resource management, transparency and accountability.

The training programme provides a level one qualification from the Engineering Construction Industry Training Board (ECITB) and is divided into three phases: pre-learning assessment and safe passport, which are completed online, and the technical pathway, which is the practical journey, which is completed at the 3T EnerMech headquarters.

ExxonMobil’s Whiptail Petroleum Licence reflects evolution of Guyana’s permitting process – Senior Petroleum Coordinator

Apr 21, 2024

By Kiana Wilburg
CEO, Guyana Energy Conference and Supply Chain Expo
[email protected]

 

Since assuming office in August 2020, the Guyanese Government has implemented numerous reforms to strengthen the permitting process for oil licences and environmental permits.

Senior Petroleum Coordinator at the Ministry of Natural Resources, Bobby Gossai Jr. recently noted that the Petroleum Production License (PPL) that was granted to an ExxonMobil-led consortium for its US$12.7 billion Whiptail Project exemplifies the regulatory advancements enveloping the sector.

The Whiptail PPL was issued on April 12, 2024. This sixth oil project is targetting the production of 850 million barrels of oil at 250,000 barrels per day. By 2027, it will take Guyana’s total output from the Stabroek block beyond 1.3 million per day.

During his first appearance on the Energy Perspectives Podcast, Gossai examined some of the provisions which underpin the evolution of the permitting process for the oil sector.

The Senior Petroleum Coordinator explained that the Guyana Government has thus far approved four PPLs for ExxonMobil’s projects styled Payara, Yellowtail, Uaru and Whiptail.

He said these PPLs, and their accompanying Environmental Permits, are armed with provisions that significantly improve upon those granted for the Liza Phase 1 and Liza Phase 2 projects.

While one of the better-known improvements includes strict conditions for flaring, (such as the application of a US$50 fee per tonne of carbon dioxide equivalent (CO2e) emitted), there are other new features to note. In this regard, Gossai expounded on the strengthened requirements for resource and reservoir reporting.

“…We want to make sure that we are updated on what the reservoir has, what is the oil in place…and the amount of resources that can be developed commercially…What we want to ensure is that there are monthly, quarterly and half-yearly reports and ultimately, we will see annual updates that make their way to the minister,” said Gossai.

According to the Whiptail PPL, the provision on resource and reservoir reporting is as follows:  “The Licence Holder shall submit quarterly resource and reserve reports to the Minister in respect of the Whiptail Project in such form and manner as the Minister may direct from time to time. (ii) These reports shall cover all potentially saleable products for the Whiptail Project including, but not limited to: oil, gas, natural gas liquids, and all such reports will be developed in accordance with and to the standards set by the Petroleum Resources Management System (PRMS).

“The Licence Holder agrees to cooperate with the Minister in auditing the Licence Holder’s statement of reserves. This cooperation shall include providing reasonable access to the required petroleum data in the Licence Holder’s possession necessary to the Minister, or any person or government agency duly authorised by the Minister, including the Minister’s procured reserves assessor’s evaluation and/or reports.”

That provision also demands that three years following first oil, an unaffiliated, independent third-party consultant must be procured to produce an independent assessment of the resources and reserves for the Whiptail project.

LOCAL CONTENT

While the promulgation of the Local Content Law in December 2021 secures the right of Guyanese to be considered for opportunities across 40 categories of work, the PPLs awarded by the current administration have been armed with an added layer of protection. According to Gossai, the Whiptail PPL demands that ExxonMobil and its partners, Hess and CNOOC, identify all opportunities for Guyanese participation.

“So the operator has a certain timeframe within which to make sure the opportunities for locals are submitted to the Local Content Secretariat,” the Senior Petroleum Coordinator added.

The Whiptail PPL states: “The Licence Holder shall within six (6) months of the date of this Licence provide a list of potential opportunities for local and overseas training or secondee positions within the organisations of the Licence Holder or affiliated companies, together with estimated costs. The Licence Holder shall maintain and update such list no less frequently than each calendar year. The Licence Holder shall accept the Government of Guyana personnel nominated by the minister for such positions…”

ENVIRONMENTAL MONITORING & AUDITING

While the Environmental Permit for the US$12.7B Whiptail project carries its suite of protective measures, the PPL also contains several complementary provisions. The licence states for example that Exxon and partners shall include methane emissions detection and reduction technology in the design of the floating, production, storage and offloading (FPSO) vessel.

The companies are also required to submit a report detailing clearly, how and what methods were used to calculate/ estimate emissions for each pollutant.

The Stabroek block consortium is also required to implement a monitoring programme for environmental resources (such as marine water quality, air, sound, mammals, fish, special species, coastal habitats, birds, benthos etc.) as identified in the Environmental and Social Impact Assessment (ESIA).

Further, the PPL demands that the licence holder conduct routine annual external/third-party environmental audits in accordance with an internationally accepted Environmental Management Standard such as ISO 14001:2015.

DECOMMISSIONING

Decommissioning occurs at the end of the life cycle for an oil and gas project. It involves the safe removal of all equipment used to extract the resources, as well as restorative works to ensure the environment is, as much as possible, returned to its original state.

Gossai said this provision in the Whiptail PPL is perhaps one of the most significant improvements compared to the arrangements in place for the Liza Phase 1 and 2 Projects.

“If we go back to Liza 1 and Liza 2, what we would have had at that time was a Decommissioning Security Agreement between the (co-venture partners) and government. That was a security agreement, in the sense that you say if this field is going to be for 20 years, by the time you reach the decommissioning stage, whether in year 18 or 19, we have some funds in place in an account somewhere to take care of those activities…but that was just an agreement,” said Gossai.

He noted that the Petroleum Activities Law mandates the establishment of a fund on mutually agreed terms, essentially ensuring that at no point will Guyana be saddled with such costs.

According to the Whiptail PPL, Exxon and partners shall, no later than 120 days from April 11, 2024, the date the licence was signed, submit to the minister, cost estimates for the alternative disposal methods considered in creating the Preliminary Decommissioning Plan and Budget submitted with the Whiptail Field Development Plan (GYWT-GP-BPFDP-00-0001).

It further notes that the licence holder shall prepare periodic updates to the “Preliminary Decommissioning Plan and Budget” as contemplated by section 10.7 of the Field Development Plan, and shall submit the final proposed Decommissioning Plan and Budget, for the approval of the minister in keeping with the Act and Regulations.

The PPL also states that within 24 months from the date of the licence, the minister and the Stabroek block consortium shall agree on the terms and conditions for the administration of a Decommissioning Fund.

The concerned parties shall also agree on the terms and conditions for the disbursement of payments for the cost of decommissioning to protect the State from the risk of having to fund decommissioning liabilities. Terms and conditions shall consider, but not be limited to the creation and structure of the fund, governance and contributions to the fund, payment and disbursement procedure, and protection against insufficiency of the fund.

Guyana arms multi-trillion-dollar oil sector with most modern laws in Western Hemisphere – AG

Jun 14, 2024

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

 

Since assuming office in August 2020, the Guyana Government has embarked on an aggressive programme for legislative and regulatory reform. This approach has produced a modernised Petroleum Activities Law which the nation’s Attorney General, Anil Nandlall, SC hails as “the most modern expression” of its kind within the western hemisphere.

During his first appearance on the Energy Perspectives podcast, a programme powered by the Guyana Energy Conference and Supply Chain Expo, the Minister of Legal Affairs detailed the comprehensive nature of the revamped framework to govern the oil and gas industry.

The Attorney General noted that the Petroleum Activities Law, enacted in August 2023, replaced the Petroleum (Exploration and Production) Act of 1986. Nandlall noted that the 1986 legislation was promulgated at a time when there was no evidence of petroleum products in commercial quantities. By sheer passage of time, that legislation was rendered archaic and ineffective to govern the 11 billion barrels of oil equivalent resources unlocked by an ExxonMobil-led consortium in the Stabroek block during the period 2015 to 2024.

Nandlall was keen to note that the new oil law was not drafted locally.

“…That is the important thing about our government, we know when we don’t know. We are courageous and intelligent enough to accept that…we engaged in drafting that bill through engagements with experts that looked at models in Europe, Canada, several states in the U.S.A, the Middle East, and we came up with that law,” said the Attorney General.

He added, “It is the most modern expression of the law in this hemisphere, and it caters for everything…”

The reformed legislative and regulatory framework for the oil sector also saw the introduction of the Local Content Law in December 2021.

We recognised quickly that unless we protect local labour, it would be ousted from the sector completely…Why? The sector by itself has certain inherent, inalienable characteristics. The companies operating in the oil and gas sector, they move as a collective,” Nandlall said. In this regard, he noted that ExxonMobil moves with a well-developed ecosystem of service providers.

Unless you have some way of carving a niche out for your people, then that entire sector would be dominated by that congregation that follows the major operators,” the Attorney General. It is with this understanding that the government moved quickly to introduce the law which calls for Guyanese to be given first preference across 40 categories of work.

To ensure the prudent spending and saving of the nation’s oil revenues, Nandlall said the PPP/C government introduced a Natural Resource Fund law in December 2021. This legislation, he said, ensures that all revenues are subjected to strict reporting guidelines to ensure transparency and accountability, from the point of receipt to the spending of every cent.

The Ministry of Finance must disclose every deposit into the fund and seek parliamentary approval before spending. The Act also speaks to the use of the fund…the president and government can’t just go and decide they will buy 10 airplanes and two helicopters with the money. It can only be used for transformational national projects,” said the Attorney General.

He stressed that any violation of the law carries heavy penalties, humongous fines, and jail sentences.

With Guyana now host to over US$55 billion in offshore developments, there is an astounding growth in contracted commercial activity to support these initiatives. There is also substantial spin off effects for other industries such as agriculture, construction and services. Considering this growth and the contracts they are tied to, local authorities found it prudent to introduce a modernized Arbitration Law. This was done in May 2024.

In this regard, Nandlall said, “We are now operating in a modern, commercial environment. For the first time, we now have in the commercial sector, global operators and giants in every sphere of activity… You must prepare to regulate such a transformed environment with internationally accepted standards for the settlement of disputes when they arise, hence the passage of this Bill.”

Overall, Nandlall said Guyana is sending a resounding message to the world: “We are open for business, committed to transparent governance, and dedicated to creating a thriving investment climate.”

With a world class Petroleum Activities Law, a progressive Local Content Act, and stringent Natural Resource Fund legislation, Nandlall firmly asserts that Guyana is setting new benchmarks for governance that attract global investors and protect local interests. He said Guyana’s modern Arbitration Law further solidifies its position as a premier destination for international business, equipped to handle complex commercial activities with internationally accepted standards.

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