Guyana is poised to become the world’s latest oil producing nation. When that happens, it is expected that Guyana will earn revenues that was previously not
Former T&T Energy Minister Kevin Ramnarine addressing the gathering in Guyana
obtained. However, oil fields do not last forever and according to former Trinidad and Tobago Energy Minister, Kevin Ramnarine, local industries to outlast the oil boom must be created. He also encouraged the Government to invest portions of the oil wealth into social programmes, health care and scholarship opportunities, among other ventures.
Ramnarine was at the time addressing a gathering at Savannah Suites, Pegasus, during the first lecture hosted by the Guyana Oil and Gas Association. He spoke about the ways that the Guyanese people can really benefit from the oil find.
The former Minister noted that there is an infrastructure deficit in Guyana when compared to other countries, which must be fixed. Ramnarine used comparisons with Norway, a prominent oil and gas producer, in explaining that Guyana had some catching up to do with its standards of living and infrastructure.
“When Norway discovered oil in 1969, Norway was pretty well off. In fact, Norway was marginally less rich than the richest country in Scandinavia, Sweden. And Norway already had pretty well established universities.”
“Norway in 1969 and Guyana in 2017 cannot be compared. Some people believe that all the oil wealth should be saved and put in the (Sovereign Wealth Fund). I disagree. There is an infrastructure deficit that has to be cured in this country and a portion of the oil wealth should be spent on health care, education and infrastructure, because Guyana is Guyana.”
Ramnarine spoke about the importance of creating a services sector which will live on for generations. He used the example of Levi’s, a company that started out making rugged jeans for gold miners in California. Decades after the gold rush tapered out, Levi’s is a world renowned company and brand.
“The public in Guyana will only benefit if industries are established downstream of oil and gas.”
He pointed out that Trinidad had developed its skill base, to the extent that it exported skills. Ramnarine advised that some of the monies collected from the production sharing contract between the Government of Guyana and ExxonMobil could go towards funding scholarships in the sphere of geosciences, including petroleum engineering, economics and law.
That being said, Ramnarine acknowledged the reality that not everyone could be accommodated in those fields.
“Not everyone can be an engineer or a geologist. The oil industry is not all about (those professionals). There are people who work as welders, technicians and operators and the training for that happens in the companies or in different schools.”
“Some of those people go on to make quite a bit of money, especially our welders, who are in high demand all over the world. Training does not only have to be in degree type areas. There has to be training in technical and vocational areas too.”
As per the Production Sharing Agreement (PSA) signed between Guyana and United States-based ExxonMobil, Guyana stands to gain a percentage from every barrel of oil extracted by Exxon. However, this agreement is currently under review.
Even before the first announcement of an additional oil find in the Payara -1 well, ExxonMobil had pegged oil production at 100,000 barrels a day. Guyana is currently in the drilling phase, with production expected to start by 2020.
ExxonMobil Country Manager, Jeff Simon, addressing the media at a press conference last year, had stressed that ExxonMobil would not be able to provide thousands of jobs to Guyanese. However, Simon had advice similar to Ramnarine’s to impart.
“The greatest benefit is the revenue stream provided to the country,” he had said. “If job creation is critical, then take some of that money and put it into areas where job creation could be exponential relative to what we are talking about here.”
On Thursday last, ExxonMobil announced that more oil was found offshore Guyana.
The Texas-based oil and gas company said the well was drilled by ExxonMobil affiliate Esso Exploration and Production Guyana Limited, and encountered more than 95 feet of high-quality, oil-bearing sandstone reservoirs. It was safely drilled to 18,080 feet in 6660 feet of water. The Payara field discovery is about 10 miles North-West of the 2015 Liza discovery.
In addition to the Payara discovery, appraisal drilling at Liza-3 has identified an additional high quality, deeper reservoir directly below the Liza field, which is estimated to contain between 100-150 million oil equivalent barrels. This additional resource is currently being evaluated for development in conjunction with the world-class Liza discovery.
Drilling on Payara began on November 12, 2016, with initial total depth reached on December 2, 2016.
In May 2015, Exxon confirmed its significant oil discovery at its Liza 1 exploration well, where more than 295 feet of high-quality oil-bearing sandstone reservoirs was encountered.
