Use of local resources in the extraction of oil was emphasised on Tuesday by the Private Sector Commission (PSC) in a meeting with EEPGL, a subsidiary of Exxon Mobil which found a huge hydrocarbon deposit offshore last year.
A release from the PSC on Wednesday said that officials of Esso Exploration and Production Guyana Ltd (EEPGL) briefed the members and executives of the PSC on the company’s exploration activities in Guyana and on the results and findings of the Liza 2 appraisal well. The Liza 2 results confirmed the preliminary findings of its predecessor the Liza 1 that had found commercial quantities of oil. Recent data from the Liza 2 appraisal well and 3D seismic survey indicates that the deposit contains some 0.8 billion to 1.4 billion barrels of oil. The release said that EEPGL estimates that production can occur within five years and can be as much as 100,000 barrels per day from one Floating Production and Storage Offtake (FPSO) vessel of which two can be in place. EEPGL also confirmed that the development of the deposit is feasible despite the current oil price.
The PSC said that it was assured by the officials of EEPGL that the local content in their operations globally averages between 75% to 95%. The release said that it was pointed out that due to the nature of the operations offshore and the high technology being utilised, the “direct labour footprint overall will be within the hundreds rather than in the thousands”.
Chairman of the PSC, Edward Boyer said 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. The release said that it is important that the sovereign wealth fund (SWF) be established and managed professionally and that Guyana become a member of the Extractive Industries Transparency Initiative (EITI). These will enable transparency in the allocation and use of revenues generated from the oil and gas sector, it said.
The PSC added that it was encouraged by the assurances of Minister of Natural Resources 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. The PSC said that Trotman also expressed the Government’s commitment to the creation of a SWF and its intention to seek membership of EITI by November 2016.