Country Director of the ExxonMobil Corporation Jeff Simons on Wednesday indicated that there would be greater involvement of locals in its operations as the company moves forward.
Appearing before the Parliamentary Sectoral Committee on Natural Resources, Simons said the company always works to maximise local participation wherever it is located around the world and it would be the same in Guyana. He said that in drilling the first well, Liza-1, there was not a lot of local participation but as they moved to the second well, Liza-2, this has been improved significantly and all of the supplies, including transportation and security, are being provided locally and this will be expanded as the company moves forward.
He pointed out that company is presently running a drilling rig that would be here for the foreseeable future. “The next step is when we get to actually putting that big ship out there in the water and getting a production operation that really takes it to a different level when we are having…fifty to a hundred people out on the ship…,” Simons said, while noting that there are already some Guyanese employed by the company.
And while Simons said that the company has provided support to some local charitable organisations as part of its corporate social responsibility, he did not give a figure. However, he indicated that as the company’s activity in Guyana expands, it will develop a much larger corporate responsibility programme and this has already started.
Last month, the company announced that drilling results from the Liza-2 well, the second exploration well in the Stabroek block offshore Guyana, confirmed a world-class find with a recoverable deposit of between 800 million and 1.4 billion oil-equivalent barrels.
On July 17, the company began drilling the Skipjack prospect, which is located approximately 25 miles northwest of the Liza-1 discovery well. This is the third well on the Stabroek Block.
Simons said the company will be drilling Liza-3 later this year as soon as it completes the well that it is currently working on.
Production
Minister of State Joseph Harmon, a member of the committee, asked Simons whether it will take approximately five years to move from exploration to production. Simons said this is indeed the timeframe that the company is working with, while adding that there are still some things that need to be put in place.
He said the company “has done this many times” and, therefore, it believes that five years is a reasonable timeframe although there are a number of things that would have to be taken into consideration.
Harmon asked about some of the factors that would determine the company’s investment and Simons said that the key things include getting a fix on what the cost in this climate will be and what are the things that they need to build and assemble.
He added that it would also include a view of what the company’s forecast is at the time of the “very significant” investment. “We are talking about a multi-billion dollar investment decision and we have not only ourselves but our partners to consider,” he said.
Modern agreement
Meanwhile, Natural Resources Minister Raphael Trotman, who also appeared before the committee, reiterated government’s plans to update the agreement between the state and the company in light of the significant changes since the inception in 1999, including the company’s confirmation of a major oil find.
In answer to a question posed by Committee Chair Odinga Lumumba, Trotman said that generally the government is satisfied with the work the company has done under the existing agreement. However, he said the government is looking to push the company on several areas, which includes local content and the company’s corporate responsibility.
He said that the acting Commissioner of the Guyana Geology & Mines Commission, who is well trained in oil and gas, has been doing the best that he could along with his team to ensure the compliance of the company. He added that there has been no complaint, even though it is “not to say that everything is perfect.”
“People does frighten big companies like Exxon you know,” Lumumba said in response.
“This is why government is relying on friends and others to assist us and give us guidance,” Trotman answered.
As to whether there would be any changes to the present agreement between the state and the company, Trotman said that government had indicated that it does desire to have some changes made and the company has said it wishes to have an extension to certain parts of the block in which it currently operates.
“Government has said we are prepared to consider the extension but we would like to also consider some amendments to the contract,” Trotman said, while revealing that the agreement is ongoing.
According to Trotman, the agreement that was signed in 1999 represented the best deal the country could have gotten at the time, since there were very few companies wanting to explore in the deep water and also because of the threat of aggression from “elsewhere.” The Minister was referring to neighbouring Venezuela and Suriname, which have laid claimed to some of Guyana’s territories.
“And so we are not criticising the 1999 agreement. We are thinking about modernising and just bringing to 2016, so I wouldn’t, sir, cast it in terms of bad and better…,” the minister said.
Trotman also told the committee that the government is optimistic that all Guyanese would enjoy the wealth that is “going to come relatively soon” as a result of the oil find.
“By relative, I mean in the normal course of things a well like this may take between five [and] seven or even to ten years to develop…,” Trotman said, while adding that his ministry has been continuously preparing by having persons trained and being in contact with agencies that have offered support. It is in the process of coordinating the manner in which the support would come, he added.
