Guyana will not have another opportunity

Feb 17, 2019 Features / Columnists, The Story within the Story

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By Leonard Gildarie

The year 2015 will be remembered for a number of reasons. That year, a coalition ended the 23-year-old rule of the People’s Progressive Party/Civic. Around the same time, one of the biggest companies in the world, ExxonMobil, announced it had struck oil, during exploration, in its concessions offshore Guyana.
Venezuela immediately laid claim to the area where oil was discovered.
The Stabroek Block area has since seen a dozen or so wells drilled and there is only one that missed.
The quality of oil is said to be the lighter sweet crude, which means it is like liquid gold to the industry…it costs less to process, in layman’s terms.
The find saw Exxon in a jiffy, announcing that in five years’ time, it would start production.
The Liza Destiny platform, which is a high-tech, refitted ship, is to start sailing in summer from Singapore where is it being put together, for Guyana. It will then be connected to the wells.
Some industry officials are not ruling out a 2019 start to production. It is all heady stuff.
It can and will change the fortunes of Guyana.
I drove along the Eccles access road to the Haags Bosch dumpsite area recently and saw a huge building. Halliburton.
Yes, it is one of the world’s largest providers of products and services to the energy industry. The US company says it has over 60,000 employees, representing 140 nationalities in more than 80 countries.
Schlumberger is also here. It has purchased the riverside operations of Gafoors in Houston, setting up its huge tanks and heading into production of special liquid for the oil industry.
Gafoors has since relocated its operations less than half a mile south east.
We told you last week that lands are being snapped up. We can tell you too that not many of the riverside lands are still available. In fact, the ones that remain, the people are not scared to call the price, and they are in the US million-dollar range.
We can also talk about the huge interest now in exploring near the Stabroek Block. Other operators are gearing up.
In Guyana, the registry would be reporting that the number of companies being opened have risen sharply.
Marriott and Pegasus will report that business is excellent.
The advent of oil has raised several worrying things. We know now of the importance of local content.
According to World Bank’s Silvana Tordo, a lead energy economist, “Local content in the extractive industries is being given ever higher priority by host governments through a wide array of policy instruments. And oil, gas and mining companies now rate local content among the most significant expectations in the communities in which they operate.”
ExxonMobil wants to have a few more of the floating platforms, as it has intentions to ramp up production from the 120,000 barrels per day initially to over 700,000.
The find is in excess of five billion barrels.
The debate has been ongoing of the training of locals and transfer of skills, and partnerships. The importance in getting it right at this time cannot be overstated.
We only have to look to Venezuela and Trinidad and start preparing.
This past week, chief of the Department of Energy, Dr. Mark Bynoe, announced that locals will be shadowing hired experts.
Is that enough? Can we argue that the ball is in our court when it comes to negotiation?
We have shown a poor track record when it comes to ensuring that Guyana benefits.
We cannot ask for investments and then turn around and give out concessions galore for the sake of a few jobs, especially when we are dealing with resources that are finite – like oil and gold.
There must be a demand that local companies participate, and participate in a fair manner. Our first interest must be Guyana.
Local content has been described as the development of local skills, oil and gas technology transfer, the use of local manpower and manufacturing.
Some countries have seen the importance of transfer of skills and buying local.
Trinidad technicians will tell you that we need more universities and classes relating to oil and gas. We should be insisting that any oil company that comes here should have monies set aside to invest in education.
We know that our local products, in terms quality and packaging, still has some way to go. However, as a people, we are known to be industrious. We work hard and have contributed as good citizens around the world.
With that quantity of oil sitting in our backyard, we have to demand more. There is nothing wrong driving a hard bargain. We have many lawyers in our midst. We have access to lawyers if we want who specialize in negotiations. We have companies, which specialize in local content policy development.
To be fair, we have a draft local content policy that I am sure will encompass what we discuss. The problem is that while that is happening, we have ExxonMobil settling in, signing contracts, hiring companies, as the operator.
The question to be asked is, how much of a say do we have?
Have we done any sort of studies to understand how many of the jobs and contracts that could have been provided locally, instead was doled out to overseas interests?
I guess someone will tell you that we lack the skills.
Here is a good example.
We recently expanded the West Coast Demerara roadway.
The Jamaican company had to partner with a local contractor before it could have been awarded the contract. Maybe that is a model that can be replicated. We have to fight for it.

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