Guyana to earn US$300 million from oil sector in first year: official

Guyana to earn US$300 million from oil sector in first year: official

(NEWS ROOM GUYANA) — Guyana is expected to get US$300M next year from the Petroleum sector, according to Director of the Department of Energy, Dr Mark Bynoe.

He explained that this translates to $62 billion which is just 10% of the country’s Gross Domestic Product (GDP).

“…so it is not a significant amount of monies that everybody can start saying I’ll be a millionaire,” Dr Bynoe told Indigenous village leaders at the recently concluded National Toshaos Council (NTC) Conference held at the Arthur Chung Conference Centre last week.

US-oil major ExxonMobil is expected to begin producing up to 120,000 barrels of oil per day from the Liza Phase 1 development by early 2020.

Dr Bynoe said, “Guyana will not automatically be transformed with first oil.”

He noted that the Government will need to prioritise its developmental and other projects and initiatives.

Guyana will be earning a 2% royalty and 12.5% profit oil in the beginning, however, Dr Bynoe explained that after ExxonMobil recovers its investment cost, the country will be given 50% of the oil profits.

“It is no different from you taking the risk and purchasing a property. If you then decide to go with a joint venture partner, you would then expect to recover the money with which you purchase before you start splitting the profit,” Dr Bynoe told the participants at the NTC Conference

“It all depends on how soon we can be able to liquidate the cost that has already been incurred…two per cent royalty is not all that Guyana will be getting,” he said.

The Energy Director said ExxonMobil’s investment to drill a single well is between US$40-US$120M.

Additionally, he said the Floating Production, Storage and Offloading (FPSO) vessel uses 140megawatts of power which is in excess of 75 per cent of what the entire Guyana consumes.

“This is not a cheap venture; it is not a simple venture,” he said.

Jobs in petroleum sector

Many persons have been calling for employment opportunities for Guyanese in the oil and gas sector.

Dr Bynoe said there are opportunities for everyone including females.

“It is not just a male sector. You have females who are already employed therein and are going on training…anyone can be employed in the sector once you have the appetite,” he noted.

However, he said one of the areas which need to be looked at is a change in the work ethic. The Energy Director said more needs to be done to improve safety, security and the general conduct.

“We hear Guyanese do not want to wear safety equipment because it is a tropical country and we’re hot…If you don’t do that, you’re not going to be employed…A simple error can leave to billions of dollars in expenditure and loss of lives,” he explained.

Over 1300 Guyanese are employed in the sector, he said.

Investment in hinterland

The Indigenous leaders have also called for investments in the health and education sectors in the hinterland especially health and Education.

Dr Bynoe urged Indigenous leaders to craft a strategic plan to ensure their communities benefit equally from the promising resources.

“I am not trying to be critical of anyone but all the needs and requirements that are being asked for, it would be best if those are couched within a much larger framework where you can see that if I got three boats this year and three brush cutters next year, what is it leading towards.

“It must not just be a band-aid solution to address an immediate need, it should be focused towards where is it you want to go as a community, as a village, as a region, that will ultimately help us to get there,” he emphasized.

The Energy Director said the aim is to ensure that the investments are sustainable whether there is a change in Government.

General and Regional Elections are set for March 02, 2020, the same year as first oil.

To date, ExxonMobil has made 14 discoveries that are approximately six billion recoverable barrels of oil while Tullow has made two discoveries.


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