Business community updated on oil find…Production could reach 200,000 barrels daily
– Jobs will be in hundreds, not thousands
Oil production in the ExxonMobil concessions offshore Guyana could see as much as 200,000 barrels of oil per day during full operations.
Updating the local business community on the oil find which is promising to change this country’s fortunes, the US-owned local subsidiary, Esso Exploration and Production Guyana Ltd (EEPGL), earlier this week briefed the members and executives of the Private Sector Commission (PSC) on the company’s exploration activities in Guyana and on the results and findings of its LIZA 2 appraisal well.
The oil company officials said that results of the Liza 2 well confirmed the preliminary findings of its predecessor, the Liza 1 well, which saw sufficient deposits of oil to develop and extract commercially.
“Recent data from the Liza 2 appraisal well and 3D seismic survey indicates that the discovery contains some 0.8 billion to 1.4 billion barrels of oil deposits.
EEPGL, according to the commission, estimates that production can be realized within five years and can be as much as 100,000 barrels per day from one Floating Production and Storage Offtake (FPSO) vessel. It is likely that two of these vessels could be in place when commercial activities kick off.
“EEPGL confirmed that the development of Guyana’s resource is feasible despite the levels of oil prices currently,” PSC disclosed.
Currently, oil is just below US$47 per barrel on the world market, after reaching more than US$100 more than a year ago. The prices have been raising fears around the world and especially for Guyana especially about when the US Company is likely to start production.
The PSC, during Tuesday’s meeting, urged for local businesses to benefit from demands of services and jobs that the oil activities will create.
According to EEPGL, the local benefits could be up to 95 percent.
“The Private Sector Commission emphasized the importance of local content (utilization of local resources) and was assured by the officials of EEPGL that the local content in their operations globally averages between 75% to 95%.”
However, it is unlikely thousands of jobs will be created from the oil activities, the exploration company warned.
“PSC said that it was also highlighted that due to the nature of the operations being offshore and the high levels of technology being utilized, the direct labour footprint overall will be within the hundreds rather than in the thousands.”
Chairman of the Private Sector Commission, Edward Boyer, noted that it is crucial that Guyanese businesses and the citizenry educate themselves in preparation for the changes which will occur in the economy when the country begins to receive significant revenues from oil.
PSC said that Guyana has to move quickly to establish mechanisms for the benefits that will come.
“It is important that the Sovereign Wealth Fund be established and managed professionally and that Guyana become a member of the Extractive Industries Transparency Initiative (EITI). These will facilitate the transparency in the allocation and use of revenues generated from the oil and gas sector,” PSC urged in the statement reporting on the meeting.
The commission also said it was encouraged by the assurances of Natural Resources Minister, Raphael Trotman, with whom they met earlier in the week also, that local content is a focus of the Government and that local content rules will be legislated.