The shocked reactions at the announcement by ExxonMobil officials that at best only a hundred jobs may be available to Guyanese in our emerging “petroleum industry”, indicate there was an expectation that possibly thousands of jobs would have opened up to solve our unemployment problem. The Minister of Natural Resources Raphael Trotman should have done a better job of explaining what lies ahead in this area.
Exxon had never even hinted they would be processing any of the petroleum or natural gas from the Stabroek Field and, as was confirmed, this meant the only “technical” manpower needed was to operate two “Floating Production, Storage and Offloading” (FPSO) facilities. Basically an FPSO is a converted oil tanker hull that has been equipped with hydrocarbon processing equipment for separation and treatment of crude oil, water and gases, sourced from sub-sea oil wells via flexible pipelines.
The treated oil is transferred to cargo tanks in the FPSO ship’s hull where it is stored. Treated gas is used as fuel for on-board power generation, and excess gas is either re-injected back into the subsea reservoirs or exported via a pipeline to shore. Its “offloading” component then transfers the treated oil to tankers that transport it to refineries. FPSO’s are highly automated, requiring few trained personnel: in the case of Exxon the official indicated that only fifty of the latter are needed per FPSO. In terms of employment to produce the projected 100,000 barrels per day, all that is needed are 100 workers who will not be Guyanese in the beginning. What the Minister should negotiate is increasing the local content in this specialised area along a specified timeline. The 75% “local content” employment mentioned at this time – numbering 300 – are all in mundane peripheral areas such as security, food supplies etc.
The Exxon official took pains to emphasise it is the responsibility of the government to use its revenues from oil production to create industries and other means of creating jobs for Guyanese citizens. While this may be true, there should be a definitive statement by the government on its intentions towards downstream processing of the oil and natural gas that will be produced. A refinery, which will cost at least US$2B, is certainly out of the question at this time. Because of the US shale oil boom, their refineries are working at up to 94% capacity while Trinidad, for instance is below 50%. Two refineries have closed down in the Caribbean and at least a dozen in Europe.
However, it may be feasible to construct a bulk Liquified Petroleum Gas facility to utilise the gas that would be re-injected back into the undersea reservoirs by Exxon. This would be able to keep our present electricity generating equipment with some modifications to utilise the equivalent of the 10,000 barrels of oil per day we presently consume. Additionally, it would also create employment for hundreds of Guyanese and even open up the possibility of manufacturing fertilisers for later. The government should at least conduct a feasibility study to explore this option.
But the advise of the Exxon official on the government’s responsibility to utilise the revenues from the 100,000 bpd oil flow to create employment should be taken in good stead. There has already been discussions on the creation of a Sovereign Wealth Fund (SWF) that will ensure the revenues generate interest. But beyond that, it should be clear to the government that the country needs an economic plan that incorporates a strategic industrialisation component that will sustainably diversify our economy and soak up our high rate of unemployment.
As others, in addition to this newspaper, have warned, we have to avoid the temptation of simply using oil revenues to fund our consumption. In addition to ensuring that even our present productive capacity will wither, we will be denying future generations their national patrimony. The government must engage the Opposition to craft a truly national plan.
