ExxonMobil Guyana President Alistair Routledge on Thursday said the company’s current cache of offshore projects and those in the pipeline represent approximately US$30 billion in direct foreign investment in the country and that it will generate billions more.
“The Liza Destiny [FPSO vessel] began production in December 2019… The Liza Unity arrived in Guyanese waters in late October and is expected to begin production early next year. Its production target is 220,000 barrels per day, a significant almost threefold increase from the Liza Destiny. We have a third project approved by the government last year, Payara. The Prosperity [FPSO] is under construction in Singapore and is expected to sail for Guyana in 2023.
“And of course, as you know, we are currently in discussions with the government regarding the field development plan for the Yellowtail Project. Then, there is the Gas-to-Energy project which will deliver lower cost electricity and be a cornerstone of the Wales Estate Development. These projects cumulatively represent around 30 billion US dollars of foreign direct investment in Guyana that will generate billions of US dollars revenue to the country over the coming years,” Routledge told the Georgetown Chamber of Commerce and Industry’s gala dinner on Thursday night.
Routledge, who also said that the company has spent approximately US$540 million, with over 800 local suppliers since 2015, told those present that the projects that are currently taking place in the Stabroek Block offshore provide a foundation for the growth of the local private sector.
He said that Exxon believes that there is scope for up to 10 projects in the Stabroek Block, while pointing to the five additional discoveries made for 2021, thus far. He added that many of their contractors have set up headquarters in Guyana to take advantage of the opportunities while highlighting that it has also created a space for the Guyanese private sector to also benefit.
“To date, all of the major international oil and gas contractors have a presence in Guyana and have steadily been moving activities from the United States, Brazil and Trinidad and Tobago to Guyana. Almost the entire supply chain for our offshore activities have been relocated to Guyana. This has created opportunities for the Guyanese private sector— whether it is build-out the shore bases, warehousing, or waste treatment facilities. As part of the Yellowtail project, we also plan to invest in a project shore base that will enable an increase in fabrication and load-out activities in Guyana,” he related.
Routledge explained that Exxon believes that Guyanese should not only benefit from the oil revenues but also play an active role in the development of the resource as well. To that end, he revealed that there are more than 3,200 Guyanese working on various Exxon operations.
Providing an industry perspective on the role of the private sector in the future of energy in Guyana, he said that while the private sector has seized multiple opportunities, they should continue to be bold in their planning.
US$500 million in revenues and cleaner energy
The Chamber’s membership heard that the government of Guyana has received nine oil lifts of one million barrels each and that coupled with royalties produced more than US$500 million in revenues.
Routledge said that by bringing the energy to shore and adding additional sources of energy, Guyana has the opportunity to make economic diversification a reality. Guided by the revised Low Carbon Development Strategy, he noted that the government has enlisted the private sector in the mission of delivering more energy at cheaper prices, producing less emissions with the gas-to-energy project and others like the Amaila Falls Hydropower project.
He told the private sector operatives that ExxonMobil is deeply invested in a cleaner, more affordable energy future for Guyana, while noting that the construction of its Ogle, East Coast Demerara (ECD) head office is being done with a net-zero energy footprint.
“At a corporate level, ExxonMobil announced our Low Carbon Solutions business to commercialize our extensive low-carbon technology portfolio, which is initially focused on Carbon Capture and Storage, advancing plans for multiple new opportunities around the world to enable large-scale greenhouse gas emission reductions.
“Over time, the business will include other technologies, including biofuels and hydrogen, as they mature to commercialization,” he said
Local content
Routledge told the GCCI’s membership that while the private sector is dependent on its workforce and should invest in its employees, governments also have to play their part. He added that not only will the private sector be pivotal to the development of the energy sector, but the private sector can use this opportunity to build capacity, capability and experience for long term international competitiveness.
“A dynamic private sector requires an enabling regulatory and fiscal environment and I can commend the government for their commitment to improving the ease of doing business by reducing bureaucracy, improving access to finance, and enhancing transparency,” he noted.
He added that why Guyana needs to invest in its people through education and training, ExxonMobil is committed to building local content and national competitiveness. Routledge said that the company remains committed to the involvement of the Guyanese workforce and suppliers of goods and services.
“Just as with other countries with large or growing energy sectors, Guyana will need stable rules that facilitate large-scale investments and set priorities and outline achievable targets for the industry rather than trying to make rapid progress in every sector simultaneously,” he said.
“It is important that we all collaborate to drive growth in local content. We must be cognizant of the unintended consequences that mandated targets on outcomes can have in slowing, or potentially halting investment. We recognize our role in providing a sufficient flow of opportunities in order that local companies can recoup their investments. We need to work collaboratively to optimize investments, remove barriers and build capacity,” he, however, added.
