‘Accelerated oil development with ad hoc governance, outdated laws could sink Guyana’s shipping, transport industry’ – Exxon’s study

Jan 13, 2023 News

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Kaieteur News – Guyana’s shipping, transport and harbour industry is expected to face increased pressure as ExxonMobil Corporation ramps up activities to develop resources in the Stabroek Block.

This forewarning was noted in the Environmental Impact Assessment (EIA) for Exxon’s fifth project. That development is expected to produce 1.3 billion barrels of oil from the Uaru field.

Exxon’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL) was keen to note that as activities increase in the oil sector, the shipping industry will face increased burdens, especially when one considers its inefficiencies in the legislative framework and overall governance.

The report notes that there are several bottlenecks that have been described over the years by credible third-party sources and which remain to this day.

Exxon’s study said the lack of a new Ports Act has delayed the establishment of National and Regional Ports. It said a Port Authority of a National Port should be managed by a Board of Directors nominated partly by the Central Government where the concerned port is located and if applicable, partly by the concerned Port City, in proportion to the shareholding of each party.

It said the old system of representation of interest groups in a port board should be abolished. It also noted that this was a recommendation that was outlined since 2014 by the Central Transport and Planning Unit (CTPU).

Further to this, Exxon noted in its EIA that the lack of a coordinated approach in the ports has resulted in all operators procuring their own equipment and employing their own labourers. Exxon said the total number of equipment and labourers is substantially higher than justified by the total combined cargo throughput. This too was raised by the CTPU in 2014.

Referencing the Caribbean Development Bank’s 2016 study, Exxon said that most terminals in Guyana use concrete pile structures with wooden decks for quay (docks or wharves) structures. Exxon said these quays entail substantial maintenance requirements and limit the use of heavy equipment. Additionally, lack of proper maintenance may result in safety issues.

Significantly, Exxon noted that Guyana’s access channel depth is often deteriorated. It said, “The key problem of Georgetown Harbour is the lack of regular maintenance dredging. This lack of water depth prohibits larger vessels from entering the port, thus severely restricting operational efficiency and economies of scale.”

Additionally, Exxon pointed out that the Maritime Administration Department (MARAD), part of the Ministry of Public Infrastructure, acts as the port’s authority. MARAD was established in 2003 and operates under the mandate of the 1997 Merchant Shipping Act. As there is no clear structure for overseeing and regulating the operations, Exxon said the individual public/private operators have substantial autonomy in developing their independent terminals.

PORTS

There are three key ports of Guyana namely: Port Georgetown, Port New Amsterdam, and Port of Essequibo River. At these ports, containerized cargo for import such as foodstuff, clothing and textiles, petroleum, heavy-duty machinery, etc. and exports including sugar, rice, bauxite, rum, etc. are traded.

The Port of Georgetown is situated on the north coast of Guyana, along the East Bank of the Demerara River. The southward boundary of the port is a line across the Demerara River, which stretches from the southern end of Plantation La Penitence on the East Bank of Demerara to the southern boundary of Plantation Klein Pouderoyen on the West Bank of the Demerara River.

It is important to note that the Port of Georgetown is the main access port of entry stretching 16 km inward from the river estuary, with an average depth of 4.5 metres at low tide. This port handles approximately 90 percent of cargo.

The Port of Georgetown also has several independent pier operators from both privately owned and public corporations. The larger operators include John Fernandes Ltd; Muneshwers Ltd; Guyana National Shipping Corporation Ltd (GNSC), Guyana National Industrial Company Inc. (GNIC); Demerara Shipping Company Ltd; Demerara Sugar Terminals Ltd; and Deo’s International Distribution Company Ltd (DIDCO).

Additionally, the Guyana Sugar Corporation and Caribbean Molasses Company Ltd operate bulk handling facilities for sugar and molasses, respectively. No operators provide fully dedicated container handling facilities; however, some of the operators do handle containers. Of these container cargo operators, Demerara Shipping, GNIC, GNSC, John Fernandes, and Muneshwers constitute the largest parties in terms of container throughput.

As for Port of New Amsterdam, it is situated on the North Coast of the Berbice River.

The Port of Essequibo River is located on the Essequibo River, the largest river in Guyana, often navigable by small ocean vessels. Together, the New Amsterdam and Essequibo ports handle approximately 10 percent of Guyana’s cargo.

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• Environmental Impact Assessment (EIA), Esso Exploration and Production Guyana Limited (EEPGL), Exxon's study, Exxon’s subsidiary, ExxonMobil Corporation

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