As Government expresses its interest in establishing an onshore oil and gas facility through private-public partnership, local stakeholders on Monday were encouraged to build a facility that caters for other investments.
At a recent Press Conference, Minister of Natural Resources, Raphael Trotman disclosed that the government has received a total of 18 Expressions of Interest for the establishment of an onshore oil and gas facility. He said the majority of the interests are from local companies while nine are from international companies, adding that they would all be making presentations to the Ministry.
On Monday, stakeholders were given the opportunity to interact with consultant from UK based; EY, Chris Pateman Jones who explained that the wider economic benefits need to be taken into consideration when building the facility.
Consultant, Chris Pateman Jones
“You do not want to build a base which is solely to the oil and gas industry, I’d be thinking about the bigger picture which you have here and be building a base which is supporting the oil and gas industry and is also supporting the other investment projects that you got, so your warehousing facilities, fabrication…I’d be building an industrial hub, rather than something that just supports the oil and gas industry…that’s the only way you can compete long term” he told participants.
During the session, questions were raised in relation to the timeframe for the completion of the facility as well as the necessity for such.
Jones explained that the current investor; Exxon Mobil can go ahead with its production without the local facility.
“Exxon can go into production without Guyana building anything onshore. They can do that and they can use other resources onshore base around the Caribbean. The challenge for you is how much of a piece of that pie you want to take” Jones said.
He added that “there is a long-term aspiration and there is a short-term aspiration and those two should align. You need to be getting on that trajectory. There is nothing that say you can’t proceed down the route with Exxon, go into production now and putting into the production sharing agreement, the fact that over a period of time, they should be transitioning their use of facilities to yours.”
However, he noted that the owner of the resource; local personnel, have more power than they’re aware of. Jones highlighted the need for efforts to be made to ensure that local businesses can support the oil company and also benefit from the industry.
The consultant also explained the positives and negatives of the developing industry, emphasizing that there is need for a plan that will ensure the long-term viability of the industry even in like of inevitable changes.
Also, present at the meeting was Ministers of Public Infrastructure, Natural Resources, Business and Tourism.
Minister Trotman noted that government has to file a development plan and it is at the stage of deciding whether to commit and at what speed. He added that the government will rely on foreign expertise on all aspect.
EY is a firm headquartered in London, United Kingdom, which offers professional services in several areas. The firm has recently opened an office here which is located at the Pegasus hotel.
Meanwhile, the Ministry has commissioned a study to determine whether it is economically feasible to set up an oil refinery. Chatham House will provide the expertise to undertake the study.
As Guyana develops the oil and gas sector, draft legislation on the complete overhaul of the Petroleum Act and the regulations that accompany it will be made available at the end of 2016.
Draft legislation for the establishment of a new Petroleum Commission, regulations for local content, and for health and safety for the environment are also expected to be presented later this year. Consultations on these legislations will begin in 2017.
