20. ExxonMobil 7, 8, 9, 10th oil discovery offshore Guyana

ExxonMobil
ExxonMobil
ExxonMobil 8 Discoveries @ June 2018
ExxonMobil 8 Discoveries @ June 2018

20. Discovery nr. 10, 3th December 2018

The Pluma-1 well encountered approximately 121 feet (37 meters) of high-quality hydrocarbon-bearing sandstone reservoir. Pluma-1 reached a depth of 16,447 feet (5,013 meters) in 3,340 feet (1,018 meters) of water. The Noble Tom Madden drillship began drilling on Nov. 1. The well is located approximately 17 miles (27 kilometers) south of the Turbot-1 well. The Noble Tom Madden will next drill the Tilapia-1 prospect located 3.4 miles (5.5 kilometers) west of the Longtail-1 well.

ExxonMobil makes 8th oil discovery offshore Guyana – Longtail 1- 20th June, 2018

http://news.exxonmobil.com/press-release/exxonmobil-announces-eighth-discovery-offshore-guyana

ExxonMobil makes 7th oil discovery offshore Guyana

United States (US) oil giant, ExxonMobil, has found even more oil offshore Guyana but a company spokesman would not be drawn into comment about the amount found.

Spokeswoman, Kimberley Brasington confirmed an announcement earlier Tuesday by Minister of Natural Resources that there has been another major oil find.   

She said the Pacora-1 Well, where the latest oil deposit has been found, is located about four kilometers north-west of Payara well and the rock. The well, saw the discovery of approximately 65 ft of oil-bearing sandstone reservoir that is expected to bring Guyana production to more than 500,000 B/D.

Last month, the company said the Ranger 1 well which contains 230 feet (70 meters) of high-quality, oil-bearing carbonate reservoir. The well was drilled to 21,161 ft depth in 8,973 ft of water. Appraisal drilling at the Ranger discovery may take place later this year 2018.

Barring Wednesday morning’s scheduled announcement of the details of Pacora, the company said it has so far found 3.2 billion barrels of oil from six wells at the 6.6 million acre Stabroek Block.

Stena Carron

The Minister of Natural Resources labelled as an “excellent record” the work of the drill-ship, Stena Carron. “We so far have an excellent record and I would like to congratulate the crew of the Stena Carron which has been the ship that has done ninety percent of the discoveries without a day lost or any injury or any man-hours lost and that is commendable and, of course,  it has been done in a very efficient way,” Trotman said in a video release.

ExxonMobil is scheduled to begin commercial oil production from the Liza 1 well offshore Guyana in 2020.

Reference; reblogged from:

https://guyaneseonline.wordpress.com/2018/02/28/exxonmobil-makes-7th-oil-discovery-offshore-guyana/

2) Feb 28, 2018 – 08:00 a.m. EST

ExxonMobil Announces Seventh Oil Discovery Offshore Guyana
Pacora-1 well encounters approximately 65 feet of high-quality, oil-bearing sandstone
High quality resources to be integrated into giant Payara field development
Further drilling on the Stabroek Block planned in 2018
Dateline: IRVING, Texas

Public Company Information:
Exxon Mobil Corporation (NYSE:XOM) announced today its seventh oil discovery offshore Guyana, following drilling at the Pacora-1 exploration well.

ExxonMobil encountered approximately 65 feet (20 meters) of high-quality, oil-bearing sandstone reservoir. The well was safely drilled to 18,363 feet (5,597 meters) depth in 6,781 feet (2,067 meters) of water. Drilling commenced on Jan. 29, 2018.

“This latest discovery further increases our confidence in developing this key area of the Stabroek Block,” said Steve Greenlee, president of ExxonMobil Exploration Company. “Pacora will be developed in conjunction with the giant Payara field, and along with other phases, will help bring Guyana production to more than 500,000 barrels per day.”

The Pacora-1 well is located approximately four miles west of the Payara-1 well, and follows previous discoveries on the Stabroek Block at Liza, Payara, Liza Deep, Snoek, Turbot and Ranger.

Following completion of the Pacora-1 well, the Stena Carron drillship will move to the Liza field to drill the Liza-5 well and complete a well test, which will be used to assess concepts for the Payara development. ExxonMobil announced project sanctioning for the Liza phase one development in June 2017. Following Liza-5, the Stena Carron will conduct additional exploration and appraisal drilling on the block.

The Stabroek Block is 6.6 million acres (26,800 square kilometers). Esso Exploration and Production Guyana Limited is operator and holds 45 percent interest in the Stabroek Block. Hess Guyana Exploration Ltd. holds 30 percent interest and CNOOC Nexen Petroleum Guyana Limited holds 25 percent interest.

”  All-in-1 Consultant,  Available-to-Serve-You.

For grounded, vintage stewardship to successfully find lots of oil, mineral resources, develop your business and get sustained value for money ?

See <Contact & Contract Me> at marcelchinalien@gmail.com “.

Doei, salu2, ciao, até logo, grüssen, cordialement, salut, добрый день, ajoo, tur kos bon mi dushi hendenan na Switi Sranan i mi famiri na switi Korsou, tan bun allamala !

 

19. Guyana. Concerns about ExxonMobil Deal

ExxonMobil
ExxonMobil

19. Guyana. Concerns about ExxonMobil Deal. V.210817

Guyana
Guyana

Contents (4)

1. FYI, related 12 posts are nr. 6, 7, 8, 10, 11, 12, 13, 14, 15, 16, 17, 18. from Marcel Chin-A-Lien

2. Agreement with ExxonMobil…“Matters not if Guyana secured a good or bad deal, we got a deal…time to move on” – Minister            Jordan

3. Guidelines to Acquiring Petroleum Prospecting and Production Licenses – Fiscal Package – www.ggmc.gov.gy – 15/8/2017

4. Guyana armed with world’s leading financial and petroleum experts
Aug 17, 2017 News 0 Comments –

”  All-in-1 Consultant,  Available-to-Serve-You.

For grounded, vintage stewardship to successfully find lots of oil, mineral resources, develop your business and get sustained value for money ?

See <Contact & Contract Me> at marcelchinalien@gmail.com “.

Doei, salu2, ciao, até logo, grüssen, cordialement, salut, добрый день, ajoo, tur kos bon mi dushi hendenan na Switi Sranan i mi famiri na switi Korsou, tan bun allamala !

1. FYI, related other 12 posts are nr. 6, 7, 8, 10, 11, 12, 13, 14, 15, 16, 17, 18. from Marcel Chin-A-Lien

2) Agreement with ExxonMobil…“Matters not if Guyana secured a good or bad deal, we got a deal…time to move on” – Minister Jordan

Aug 15, 2017 News 0 Comments – Re-blogged from kaieteurnewsonline.com – By Abena Rockcliffe-Campbell

Finance Winston Jordan wants Guyana to start looking ahead. He said that it makes no sense

(Photo: Minister of Finance, Winston Jordan).

continuing to waste time lamenting on whether or not Guyana may have received a good or bad deal. The Minister said that what is now important is for Guyanese to look to the future with hope for development.

Jordan hosted a press conference yesterday at his Main Street Office. At that forum, he was asked if he was happy with the deal Guyana has secured with oil giant ExxonMobil.

Jordan refused to answer the question in the simple negative or affirmative. He took a different route. The Minister told reporters, “It is not for me to be happy or unhappy.”

Jordan said that once Cabinet approves a document, all members have a collective responsibility. “If you do not like something (a Cabinet decision) and you are passionate about it, you have the option to resign. It (the agreement) has been discussed, received and approved by Cabinet. We have gone beyond that.”

The Finance Minister took the opportunity to note that there have been tremendous attempts at oil exploration in Guyana. He even referred to a time in Guyana’s history when oil was reportedly found in Takutu. The Minister said that the announcement back then about an oil find sparked much celebration. However, a few days later there was another announcement that the oil found was not commercially viable.

Cartoon Kaieteurnewsonline - August 15, 2017 - MCAL
Cartoon Kaieteurnewsonline – August 15, 2017 – MCAL

Further, Jordan sought to point out that ExxonMobil had no easy task in accessing Guyana’s oil.

The Minister noted that “ the depth of water that ExxonMobil is currently drilling in is unheard of. So they had to have specific types of technology not known to too many ”.

Jordan also made note of the level of financing that has to be available to ExxonMobil for it to carry out drilling of that magnitude. “And, I believe the further out they go will be more depth which will require even more technology.”

Jordan said that the deepest ExxonMobil ever drilled before is said to be in the Gulf of Mexico and that is nothing in comparison to the depth at which it has gone offshore Guyana.

Jordan went on to state that APNU+AFC did not have full control over what kind of deal Guyana secured. He said that the current government did not renegotiate the contract.

“ With all this issue about good deal and so on, you are making an assumption that we renegotiated the contract. That contract was already in place, we inherited that contract,” said Jordan.

The Minister summed up his discussion on the matter by saying it is time Guyanese look to the future and hope for the best. He said, “We can talk till cow come home but in going forward, we can say that discoveries not covered by this contract we have a basis to drive a harder bargain and negotiate for more. But when people are going to go (that length) it’s a risk and private people look for reward.”

Minister Jordan gave an analogy of the situation at hand. He said that someone can choose to stand up in a gambling den and look on all night. However, Jordan said that at the end of the night that person will be no richer or poorer. “But if I go with the big boys or girls and put my millions, at the end of the night I can be x millions poorer or y millions richer, it is about the risk.”

The Minister continued, “When you put all together it is not whether we got a good deal or bad deal or whatever… we got a deal.” Using another gambling metaphor, Jordan said that “hindsight will always be 20/20, but at the time you are making a deal it depends on what cards you hold and what the other person holds. If you think you have the best hand, then you can drive the bargain. At the time when this deal was put together by the last government you have to ask what cards did we hold? Did we know anything was under there?

Jordan said that while the deal has already been made, Guyana still has a chance to experience real growth.

He said, “We can discuss this over and over, but I believe the positive that you can take away is that we now have resources coming to Guyana that can finally put Guyana on the path to sustained high end development where two percent and three can become things of the past.”

The Minister noted, “It depends on how well we use these resources.”

3) Guidelines to Acquiring Petroleum Prospecting and Production Licenses – Fiscal Package – www.ggmc.gov.gy – 15/8/2017

Guyana - Guidelines for applying for an E&P license 1 - MCAL

Guyana – Guidelines To Acquiring Petroleum Prospecting and Production Licenses 1 – MCAL

Guyana - Guidelines for applying for an E&P license 2 - MCAL
Guyana – Guidelines To Acquiring Petroleum Prospecting and Production Licenses 2 – Fiscal Package – Procedures – MCAL

Important note:Not updated as per August 15, 2017, on www.ggmc.gov.gy of Guyana:

” Procedures for Petroleum Production License:Guyana has NO (???) commercial discovery for which such a license apply…..etc”.

4) Guyana armed with world’s leading financial and petroleum experts

Aug 17, 2017 News 0 Comments – Reblogged from: www.kaieteurnewsonline.com

…Trotman says advice being received on spotting loopholes

“We are being advised in terms of possible loopholes, pitfalls, areas of concern. We can’t say that we have detected or discerned any sign of the company trying to hoodwink us, but we are not going to be naïve. We are going to be prepared….”
– Minister of Natural Resources

By: Kiana Wilburg
It will be highly unlikely for USA oil giant, ExxonMobil to manipulate its books to rob the nation

(Photo: Minister of Natural Resources, Raphael Trotman)

of what is due to it, without being detected.

In fact, Minister of Natural Resources, Raphael Trotman is confident that the Government and its relevant agencies will be able to keep this multi-billion dollar and multinational company in check.

Trotman recently told Kaieteur News that Guyana is armed with some of the world’s leading financial and petroleum experts.
The politician said that Guyana is receiving expert advice from the World Bank, the International Monetary Fund (IMF), the United Nations Development Fund (UNDP), Chatham House, the United States Government and even the Mexican Government.
Trotman said, “The point I am making is that we have some of the world’s leading financial and petroleum experts advising us. And so while we are not going to say we have seen no evidence of manipulation or attempts to manipulate, the government is relying on the very best international advice and expertise.”

The Natural Resources Minister also revealed that the Government is consulting with Experts from Deloitte which happens to be one of the top financial companies in the world. He said that Deloitte officials are consulting with the Ministry of Finance.
Trotman therefore feels that Guyana being fleeced by ExxonMobil is highly unlikely.

Trotman also stated that the World Bank, the Inter-American Development Bank (IDB) and the IMF are expected to formulate a programme which will support those agencies in providing further advice to Guyana.

“We have met with their technical people and it has been determined that they will work out a shared responsibility in terms of advising us. We know that there are concerns and pitfalls but we are working…and as I said, we are not relying on our own judgment and understanding. We are learning and we are not leaving everything in the hands of the foreign consultants.

“But we are being advised in terms of possible loopholes, pitfalls, areas of concern. We can’t say that we have detected or discerned any sign of the company trying to hoodwink us, but we are not going to be naïve. We are going to be prepared.”
Trotman believes that the most important thing for the Government is to satisfy the Guyanese people that they are getting value for money.

EXXONMOBIL’S WORRYING PAST
This oil and gas superpower has faced a wave of litigation regarding the underpayment of royalties.
In the case of Chad, ExxonMobil was fined US$74 billion as it was ruled in the courts that the nation was underpaid in the royalties it was entitled to from the oil giant.

Research indicates that the fine itself is about five times more than Chad’s Gross Domestic Product, which the World Bank estimates at US$13 billion.
The fine imposed against the company was handed down October 5, last by the High Court in the capital, N’Djamena. The ruling was in reaction to a protest from the Finance Ministry in Chad that a group led by the ExxonMobil giant did not honour its tax commitments.

According to www.bloomberg.com, the court also demanded that the Texas-based oil explorer pay US$819 million in overdue royalties.
Legal minds believe that Chad would not see most of the money as ordered by the court.
ExxonMobil has since said that it disagreed with the Chadian court’s ruling. At the time of the judgment, it was examining other options.

Additionally, in 2003, ExxonMobil was found to be defrauding the state of Alabama out of royalty payments and was ordered by the courts to pay up more than US$100 million in back-pay royalties.

According to www.classaction.org., in August 2012, a Kansas judge approved a US$54 million settlement with landowners who claimed they were underpaid royalties when ExxonMobil made deductions for expenses that occurred downstream of their wells.
The settlement also ended a lawsuit filed in Kansas state court against ExxonMobil over royalties dating back to 2000.

 

 

18. Guyana – How much money will Guyana receive – All Hands On Oil – Concerns ExxonMobil’s Agreement

18. Guyana – How much money will Guyana receive – All hands on Oil – Concerns ExxonMobil’s Agreement – V.150817

From “Rags to Riches”, “ a nation that did not expect to win the lotto”, “ soon to be the richest corner of South America”.

Ahead ?

The prime goal and objective ?

Convert these 5.5+ billion barrel recoverable (@ April 2019), 13 discovery wells, proceeds and income in equal, high prosperity, happiness and excellent qualty of life for all Guyanese.

In 2045 ?

Yeahhh, we have achieved it, we are definitely a high developed, rich country. Comparable with e.g. Singapore. Just come and see with your own eyes. And check. Our high level of infrastructure, modern roads, bridges, housing facilities, education, hospitals, hotels, airport, social welfare etc. etc.

Hopefully !

1. Introduction – by Marcel Chin-A-Lien

2. Petroleum Geology Offshore Guyana – March 2017 – from Newell Dennison.

3. All hands on oil – August 3, 2017 – Reblogged from Verian Mentis-Barker.

4. Guyana: will its oil boom benefit the people ? Al Jazheera, Video, July 30, 2018

1) Introduction by Marcel Chin-A-Lien – For further info, also see my other posts on Guyana, in Chapter Petroleum Exploration

1.1. Guyana. Concerns about arrangement with ExxonMobil.

1.2. How much money would Guyana get from ExxonMobil’s offshore oil production?

1.1 Guyana. Concerns about arrangement with ExxonMobil.

The contents of the arrangement that the Guyana Government in 1999, has signed and apparently recently renegotiated with ExxonMobil, has never been published (P.D.@ december 2017: finally published by Guyana Government; this blog was written august 15, 2017).

(P.D.1, inserted August 15, 2017 – kaieteursnewsonline.com – Abena Rockcliffe-Campbell :“ With all this issue about good deal and so on, you are making an assumption that we renegotiated the contract. That contract was already in place, we inherited that contract,” said Jordan.

P.D. 2, The arrangement was finally released and published in december 2017, after much pressure from the Guyanese society.

My observations in this post of august 2017 are nonetheless still valid. In the course of 2018 I will publish my personal full observations on the published contract).

The first contract was signed on or around June 14th 1999 by Mrs. Janet Jagan.

With the appendage of Her Excellency and President (Re. V. Mentis Barker – All hands on oil, august 3, 2017).

FYI.: Cheddi Berret Jagan (1918 – 1997) was minister-president (1957-1964) and president (1992-1997) of Guyana.

Janet Jagan – Rosenberg (1920-2009) was the wife of Cheddi Jagan, married in 1943. She was president of Guyana from december 1997 – august 1999 and signed the first contract.

MInister Trotman recently declared that his government had decided that ” it was not in national interest to discuss contract details at this time ” (kaieteurnewsonline.com).

Therefore there is presently, 18 years later, a lot of uncertainty and public discussions on the arrangement, on its exact content, on transparency. Amongst all the stakeholders, inhabitants and de facto “owners” of their own natural resources, regarding this important item.

This to know for example how much money Guyana would get from its offshore production.

In 1998, also when Mrs. Janet Jagan was president, Guyana signed an arrangement (PPL) with CGX.
My educated-guess is that the arrangement signed with ExxonMobil in 1999 could resemble the arrangement signed previously with CGX.

The contents of this PPL can be found by researching Internet publications.
The Petroleum Prospecting License (PPL) was signed between CGX Energy,Inc.(Company) and the Government of Guyana (Government) on June 24, 1998.

The main articles/clauses are:

  1. Cost recovery production allocation is as follows.
    Maximum Cost Recovery is 75% during the first 3 years.
  2. Afterwards 65%.
  3. Profit Oil Split (Developer Share):
  4. During the first 5 years, 50% for the first 40,000 b/d.
  5. And 47% for Production above 40,000 b/d.
  6. After 5 years, 45 % for all production.
  7. The Developer does not pay income tax (…what a blessing from Heaven…there are almost no places on this globe where no income tax is paid…).
  8. The PPL provides that the income tax is paid from the Government’s share of the profit oil (…what a piece of cake for contractors, CGX and/or ExxonMobil, how beautiful negotiated).
  9. The Company has an exemption from VAT, exercise taxes, duties, fees, levies and from property tax.
  10. The Company does not pay royalty. ***
  11. This is considered to be included in the Government’s share of profit oil.
  12. (…what a piece of cake for CGX and/or ExxonMobil).
  13. This was apparently re-negotiated with ExxonMobil in 2016.
  14. Was upgraded from 0% formerly to 2% presently.
  15. In my opinion this is still very/far to low.
  16. I would suggest/negotiate if I were to be in the negotiating team, at least 6.5% in post-2017 Licenses. This is almost standard in surrounding areas.

(*** Also see: Petroleum (Exploration and Production) Act 1986 – Act. No. 3 of 1986. And Act No. 4 of 1992:

that is an Amendment of only section 51 in the previous act 1986,  ” Part V – Financial – Royalty on petroleum obtained under license “:

45 (1) Subject to this Act, the holder of a petroleum production license shall, in accordance with his license and this Act, pay to the Government royalty in respect of petroleum obtained by him in the production area to which the licence relates. vs.

50 (1) Royalty payable pursuant to section 45 and any penalty under section 48 is a debt due to the State and recoverable in the same manner as revenues due to the State ***).

Inserted comment: how beautiful is life. You first pay royalty. And immediately recover it back. What is the purpose ? To earn royalty and to give it back immediately? Do not understand this. Cannot believe it.

17. Training expenses of US$ 40,000 per year are required, only during the exploration period. These are qualified as exploration expenses. A very low amount.

17. Annual license rental payments of US$ 40,000 per year are required during the exploration and production period. An extremely low amount.

In my opinion this represents a very good deal (arrangement) for the Company.
And a rather ” inconvenient deal ” for the Government.

Tip that can benefit a country with billions of US$:

Always be so diligent to first design, negotiate and only later sign your own PSC.
Customised with those clauses and articles you wish to have.
Consult e.g. with a clever and seasoned PSC and E&P specialists and advisors with worldwide experience. Once signed it is extremely difficult to change and adapt it substantially. It can yield you really billions US$ extra income, a good contract.

From what I perceive from internet publications the Government did recently renegotiate the original PPL with ExxonMobil and obtained somewhat better conditions.
Including a royalty (2%) and possibly a 50% – 50% overall share.

(P.D. August 15, 2017 – kaieteursnewsonline.com – Abena Rockcliffe-Campbell :“ With all this issue about good deal and so on, you are making an assumption that we renegotiated the contract. That contract was already in place, we inherited that contract,” said Jordan.)

One would assume that the original 1999 PPL was rather favourable for ExxonMobil. Given that it was signed in a period when there was relatively little interest of IOC’s in offshore Guyana.
As is usual in such cases and in high risk, still non-oil-proven basins, it is to be assumed that Guyana has granted rather favourable (“soft”) conditions to ExxonMobil. In order to attract exploration investments with a clear work program, including seismic and drilling.

Present situation.

From “Rags to Riches”, “a nation that did not expect to win the lotto”, “soon to be the richest corner of South America”.

As a blessing from Heaven and the El Dorado, the subsurface of the prolific Guiana-Suriname Basin. In tandem with the splendid assistance of ExxonMobil and their superb team of explorationists and drillers. Already 13 discoveries on a row. Unbelievable. Never seen earlier in a virgin exploration area. Chapeau, top.

Completed with a contract already signed in 1999 Guyana is now beginning to reap the benefits of an unprecedented oil boom.

Much has been debated on the 1999 Petroleum Agreements.

Very good, necessary, lessons learned?

More important now.

The way ahead?

Now that it has become a proven basin, it is a different ball game.

Disclaimer.

This is my personal opinion as an independent global petroleum and mineral resources explorationist. And its intimately related business. commercial, strategy and policy development.

It represents what I would recommend or aim to achieve myself.

If I were part of a Country negotiation or any other team.

(…Sure, if I was sitting on the IOC/Contractor side, as I have so often been.

Then it would negotiate the reverse, most certainly…But that is the game of doing business…

The smartest guy wins.

The innocent, weak and poorly prepared guy looses.

The ” fittest survives “, as Darwin already stated in his famous evolution theory in 1895).

  1. Contracts with new entrants could / should be negotiated with a much better share for Guyana.
  2. Focussing on items as the royalty percentage: least 6.5%.
  3. Mind you:
  4. Sixty one (61) relevant (sub-)articles and clauses are omitted. Not included and not defined in this slender contract.
  5. These all cover items that can/will have an impact. Such as on profit share, environment and fluent, efficient management of the petroleum assets, by the host country.
  6. Ring fencing:
  7. Mind you, does not even appear in the Definitions. Should have been included on page 7. Was omitted, on business as usual purpose, by ExxonMobil ?? Though, financially could/will be impacting positively on cost recovery purposes for the IOC; and negatively for Guyana.
  8. Article 10 – p.25, Annual License Rental Charge: US $ 1 million. Far to low. A real piece of cake for such an unusual massive area. Could be some US $ 20 million.
  9. Dutch fees (” Dutch treats”) in the Netherlands licenses vary around 500 Euro’s/km2/year (with a sliding, increasing scale).
  10. Ceiling for cost recovery, can be adapted/lowered.
  11. Above all:
  12. Drastically optimise Guyana’s Profit Share:
  13. From  ‘ Profit Oil “,
  14. With a sliding scale, immediately after the IOC has recouped it’s investments from the ” cost oil ” .
  15. For Guyana Profit Oil Share for example the following sliding R-Factor Slices:
  16. 1) 0-1.25
  17. 2) 1.25- 1.50
  18. 3) 1.50- 1.75
  19. 4) 1.75 – 2.0
  20. 5) 2 – 3
  21. 6) > 3
  22. This would yield a sliding and gradually increasing Guyana Share (%) of respectively 20, 25,30, 40, 50, 70.
  23. Plus the flat, fixed royalty.
  24. Total profits ? Much, much higher, up to some 65%; how many billions US$ does this represent ? Just calculate, run your own cash flow and revenue model.
  25. Much better, higher (really billions US$) than with the actual Agreements.
  26. That have just 2% Royalty.
  27. And a flat 50% from cost oil, for host country share.
  28. Calculate how the revenue through time would be for Guyana in following case:
  29. Given some 5.5 billion barrels reserves (…at April 2019 and more to come…). A production increasing from of 100.00 in 2020 up to 600.000+ barrels in the near future (2025).
  30. As a comparison, with Suriname, next door. Still frontier, not-proven offshore @ august 2018. Most contracts signed before the 2015 Liza discovery.

    Operators in Suriname are obliged to pay a royalty equivalent to 6.25% of gross production value and corporate tax at a rate of 36%.

  31. Financial Engineering:
  32. Valuation and cash flow modelling
  33. In tandem with the expected/prognosed production profiles from the prospects & leads in the-to-be-licenced-areas and in existing fields.
  34. The Fiscal Regime/clauses in the PSC has/have to be flexible, not static.
  35. Why? Adapted to the prognosed prospectively of each block and license. These (can) rank very different in prospectivity.
  36. This includes using exploration and production geology, geophysics, reservoir engineering, that are fundamental.
  37. ???
  38. The best results that I myself could obtain was in the following setting:
  39. An efficient negotiation & fiscal regime team has to consist of merely technical capable persons (…no politicians, unless they have this following knowledge), thus:
  40. An integrated multi-disciplinary team.
  41. Including and where All individuals have extensive grounded knowledge of following 7 (seven) items:
  42. Petroleum exploration and production geology (1)
  43. Reservoir production engineering (2)
  44. Geophysics (3)
  45. Petroleum Sharing Contracts and Fiscal modelling (4)
  46. Contract negotiations (5)
  47. Petroleum laws (6)
  48. (7) Environmental clauses in the present PSC do not cover all possible casualties and clear responsibilitues for the Operator/Contractor:
  49. Social Responsibility and the protection of the Environment.
  50. Article 28. Sub-Articles 28.1 to 28.6, page 63 and 64:
  51. Just 40 sentences. 
  52. In case of a major oil spill ? That could reach neighbouring countries as Venezuela, Trinidad, Barbados etc. in some 48 hours with the westward flowing Gulf stream.
  53. What if ?
  54. Such as in the 2010, with Macondo, 3.2m barrels  oil spill.
  55. Cost BP 13.8 bn US$ in damages @ January 2015 New Orleans courts
  56. Additionally the Clean Water Act penalties would come on top of the more than US$ 42 bn that BP set aside or spent for clean-up, compensation and fines.
  57. By the time you are not Friends but rather big Enemies, and in Court?
  58. Because of all the claims from neighbouring countries due to environmental damages caused by a/your major oil spill.
  59. Do the meager 40 sentences of Article 28 cover and safeguard and cover All your country interests ? Sure about that ?
  60. Will you win a possible (many, many billions US$) lawsuit with just these 40 sentences and 1.2 pages of text in your trembling hands ???
  61. Personally I have my most, most serious doubts.
  62. My own Article on Environment would cover all these casualties. Such as also in the past negotiated for Clients that I served. 
  63. Faites vos jeux, international and petroleum law specialists.
  64. You would by then be in the driver’s seat. In Court.
  65. In case of an oil spill
  66. (…But, sure…you would be in Gold Rush Business. Making lots, millions and millions of money… for legal advise and corresponding fees…from your Clients…during many, many years…).

The main objective of Guyana should be to maximise its petroleum wealth by encouraging appropriate levels of offshore activities.
To this end Guyana must design a robust fiscal system with for example the following characteristics.

It should provide a fair return for both the state and the international companies. It has to be clear and avoid undue speculation, just as is now frequently surfacing in the press. Administration has to be efficient without undue rules, permits and burdens. At the same time it should provide enough flexibility and create a healthy, competitive competition and market efficiency.

Guyana Oil Boom - Sovereign Wealth Fund - - from www.kaieteurnewsonline.com - MCAL
Guyana Oil Boom – Sovereign Wealth Fund – – from www.kaieteurnewsonline.com – MCAL

A much different Petroleum Sharing Contract (Petroleum License Agreement) is certainly highly recommended in my opinion.

Designed and ” financially & subsurface potential engineered ” to produce a contemporary, ” larger and higher fair share distribution and fractionation ” for Guyana and IOC’s.

(Inserted note @ May 2018:

I published this blog in august 2017. On my site and on Linkedin.

During 2017 IMF elaborated a confidential report for the Guyana Government (Nov. 2017). Unfortunately it is not published on internet. Apparently it includes the main and same observations that I made before in my blog.

Morale:

Most important PSC items for offshore exploration and production one can figure out on its own. Or with just a small seasoned technical team.

One does not need a whole (…super expensive…) IMF team to ” unveil ”  the most important items.

But just a few seasoned global explorers.

One way to do this is to first develop a clear view of the leads, prospects and play types that Guyana’s offshore acreage has and can offer to IOC’s. This is geology, geophysics, reservoir and production engineering.

Especially on what their expected rewards potential is (subsurface areal OIP – GIP and financial – NPV, cash flow).

Align and link the potential of the different licensing areas with specific corresponding PSC clauses. Customised PSC profit share scales. Not a static fiscal profit share scheme, for all the differing/different leads, prospects, licences.. 

This is usually and frequently done.

Myself I had the opportunity to contribute, with this licensing strategy and philosophy, in other areas, such as nearby Guyana. Where PSC’s have been signed optimal for the home country.

Otherwise you give away for free billions of €€€ and $$$ that you want & need to have in your very own pocket.

Cartoon Kaieteurnewsonline - August 15, 2017 - MCAL
Cartoon Kaieteurnewsonline – August 15, 2017 – MCAL

 

1.2 How much money would Guyana get from ExxonMobil’s offshore oil production, Liza Phase 1?

Guyana - Revenues - Liza Phase 1 Development
Guyana – Revenues – Liza Phase 1 Development – ExxonMobil figure.

How much money would Guyana get from ExxonMobil’s offshore oil production. From coming Liza Phase 1 development.

See on figure the Government Revenue from Profit Oil, in green color. Figure published by ExxonMobil.

This gives a fair idea of what everyone wants to know.

Guyana Government Revenue from Profit Oil is some 7 billion US$.

This amount would be received in the period 2020 – 2033.
Payout is successful in about 4 years.

The economics of the Liza – Payara – Snoek giant fields development is thus highly profitable, with an IRR exceeding 100%.

Eco Atlantic O&G - Liza 1 - Sept. 2018
Eco Atlantic O&G – Liza 1 – Sept. 2018

Guyana earnings, according to its Business Minister Mr. Gaskin ?

” Minimum of US$300 million annually from 100 barrels of oil per day at today’s estimated US$60 per day.”

From march 6, 2018, Demerara Waves – https://guyaneseonline.wordpress.com/2018/03/11/exxonmobils-contract-will-yield-more-royalties-than-gold-business-minister-dominic-gaskin/#more-65372

” Addressing the opening of a Private Sector Commission- organised seminar under the theme “Oil and Gas in Guyana: Perspectives in Guyana”, Gaskin said he had no problem with criticisms of the contract but contended that comparisons with Ghana and Uganda amounted to “incomplete and misleading” information.

Noting that ExxonMobil was not compelled to renegotiate the valid 1999 agreement with Guyana, the Business Minister said the 2016 “revised” Production Sharing Agreement which provides for a two percent royalty and 50 percent of profit oil would earn the country a minimum of US$300 million annually from 100 barrels of oil per day at today’s estimated US$60 per day.”

Marcel Chin-A-Lien – Advisor Petroleum Exploration & Production, Business-Commercial-Policy Development, PSC’s.

” FYI:

All-in-1, Available-to-Serve-You.

For grounded, vintage stewardship to successfully find lots of oil, develop your business and get sustained value for money ?

Contact & Contract Me at marcelchinalien@gmail.com ”

2) Petroleum Geology Offshore Guyana – March 2017 – from Newell Dennison.

Question:

What kind of exploration concepts, playtypes, leads, prospects and subsurface elephants exist in offshore Guyana ?

Taken from and published on internet:

Petroleum Geology Offshore Guyana by Newell Dennison – GGMC –

Guyana Oil and Gas Association Inc. – Oil and Gas Conference – Marriott Hotel Georgetown, Guyana – March 26-28, 2017 –

A brief account of features typical of the offshore Guyana & Takutu bains.

Guyana - Petroleum Geology - N. Dennison - MCAL
Guyana – Petroleum Geology – N. Dennison – MCAL – Fig. 1

 

Guyana - Offshore Concession Status - MCAL
Guyana – Offshore Concession Status – MCAL – Fig. 2

 

Guyana - Petroleum System - MCAL
Guyana – Petroleum System – MCAL – Fig. 3

 

Guyana Basin - Exploration history - MCAL
Guyana Basin – Exploration history – MCAL – Fig. 4

 

 

Guyana - Play Types 1 - N. Dennison - MCAL
Guyana – Play Types 1 – N. Dennison – MCAL – Fig. 5

 

 

Guyana - Play Types 2 - N. Dennison - MCAL
Guyana – Play Types 2 – N. Dennison – MCAL – Fig. 6.

 

3) Guyana, oil, Exxon, Hess, CNOOC China, Lisa, Stabroek

Reblogged from : Verian Mentis – Barker – August 3, 2017

Reference, read more: http://xpressblogg.com/all-hands-on-oil/

Guyana - Hands on Oil - V. Mentis-Barker - MCAL
Guyana – Hands on Oil – V. Mentis-Barker – MCAL

When the International Financial News Organs mention the Liza 1 and 2 and the Stabroek oil wells found in the waters of its off-shore, it’s always with Guyana as the subtext.

Just look at the swagger in these headlines of Forbes Financial Magazine, June 30th 2016, in article by Christopher Helman “With Second Big Oil Discovery, Exxon Puts Guyana On The Map”…yeah, putting Guyana on the map…as Economist Magazine ‘Gusher in Guyana’, article of June 29th 2017 tops it off with sub heading ‘It will take better politicians to resist the corrosive power of petrodollars’

Just for the record….if there is any noble propensity here, it is certainly tempered by a reputation of avarice and narcissism and this is what makes these magnates mount their horses of hubris and ride in to town…not because they are overtaken by any zealous munificence and definitely not because they want to make Guyana its benefactor… only because they are driven to multiply their riches by oil.

First off, their mental image of the leader of Guyana -of any third world country for that matter- comes pre-packaged. For them he’s a meretricious caricature of leadership, achieves spectacularly little, an unrepentant dictator who constantly revises the laws to ensure longevity of rule – as he sips quality champagne from a diamond glass on the tax payer’s dollar…maybe on a private 747 – just to add to the visual.

There’s a famous recount of what happened when Esso Chad, a consortium led by Exxon Mobil, brought business to the little African country and paid USD 4 million to farmers whose lands were spoiled for farming and $1,000 USD for every mango tree cut down to facilitate oil extraction. The choices made by the farmers on spending their new found wealth grew into a common joke and became the prevailing anecdote for the oil magnates when discussing contract compensation.

Reportedly, in their unworldly joy, they spent their money only as they knew how. One took a bath in beer, another left his mud hut and checked in to a four star hotel in Ndjamena for several weeks, others took several more wives. Some did invest in wind mills and more cattle but the focus was on those who did the less enterprising things.

And, in this presumed unsophistication of the third world leader, capitalist buccaneers like Exxon find justification in exploiting their simplicity – a charge copiously documented in Exxon’s multiple Court Cases, legal defenses and its numerous charges and settlements with third world countries.

These modern day marauders never really stumble upon oil, you know.

When they show up, they’ve already done their home work…analyzed the politics of the country, identified the venal politicians, the philistine business men and developed the right kind of palm oil – for those whose palms would be greased.

The Integrity Forum calls it the ‘Voracity Effect’ but it’s really just public officials at their dishonest best.

Thing is, there was a thriving culture of local corruption, when Exxon first sought its exploration in Guyana’s waters. That first contract, covering the Stabroek Block, was signed on or around June 14th 1999 by Janet Jagan with the appendage of Her Excellency and President –titles that will not be validated in this forum, since their legitimacy remain under question.

Nevertheless, Janet signed that exploration contract during the tenure of a dictatorship that did business with foreign governments and conglomerates through murky agreements, creative accounting; much of which landed the country on world Corruption Indices and remain the subjects of internal forensic audits- audits we hope to see completed before the next national elections. She was a pliable subject, undoubtedly and fit the profile of many that resource extractors do business with.

It may be coincidence that resource rich third world countries have this type of politics but it’s incontrovertible that big oil finds a great deal of its holdings in these countries and remains the number one culprit cited when there are discussions involving the paradox of plenty, in these poverty stricken zones.

We were motivated, primarily, by the need to keep an eye on the nation’s patrimony; much of which has been pawned for returns that cannot be shown, by clear accounting, to have benefited Guyanese other than those who served under the PPP dictatorship… recalling the generous $115 million paid by Norway as disincentive to preserve the rain forest which was then sold by the Jagdeo Government to Bai Shan Lin, Vaitarna, Barama in a cross-selling, bid-rigging, price-gouging racket, then covered up in a crafty accounting scheme by, then, Finance Minister, Ashni Singh and signed off by Gitanjali Singh the Director of the Audit Office (Auditor General) who was none other than his wife.

But we were propelled by the involvement of Exxon, this business magnate, steeped in a series of investigations, an unscrupulous chaser of natural resources and market share through investment in resource extraction from small underdeveloped nations.

These are some of Exxon’s not so illustrious deeds:

In 2000, the construction of the USD 4.2 billion Chad-Cameroon pipe line with the promise of 35,000 local jobs …only that it was grossly inflated and deliberately exaggerated …many of the jobs were for bush cutters which lasted no more than 2 days at $6.50 per day and for those with a few more skills, jobs lasted just about three weeks…while Exxon flooded the job site with its imported western laborers.
The promise to the Chadians and Cameroonians to bypass wild life and fishing the mainstay of locals; of improved education and the installation of electricity – leaving instead, half constructed homes, non functional parks, and abandoned fish ponds and electricity projects.
In 2003, its $ 500 million bribe paid directly into the private account of Teodoro Obiang Nguema Mbasogo, the President of Equatorial Guinea, for concessions to the nation’s oil.
Hess is no better. We read the exposé of Hess oil and its link to the Russian mob through Rosnef, -Russia’s oil- and its culture of bribery, more notably to Latin American countries and to African countries through trading name, Amerada Hess.

The Chinese Government’s CNOOC has had its share of bribe, scandals and litigation as far away as Iraq and as close to home as the Caribbean.

And Halliburton, the latest natural resource pariah to join this school of sharks, comes with decades of investment misbehavior, creative accounting that overstates its investment in collusion with corrupt leaders and uses that overstated amount to grease the palms of sleazy government officials.

So, when we learnt of the Coalition’s reticence to declare the details of the oil extraction contract, with Minister Trotman declaring that his government had decided that “it wasn’t in national interest to discuss contract details at this time”, that “they didn’t want to expose all their business to the world”, we thought of the salt-goods shop mentality of the previous government and remembered how these same officials, these upper echelon Coalition members, lambasted the PPP Government from the podium of the Opposition for withholding information on contracts with the Chinese de-foresters – information that would have served the nation better, were it known before they were scammed by them.

And don’t get us wrong.

We see Jagdeo’s demand for ‘full disclosure’ as political impiety, as the hallmark of hypocrisy, as barefaced duplicity and dismiss it as lamentation, distraction, by an insidious loser who is dying to know if contract negotiations are as nefarious as his were – overflowing with personal perks, coordinated with corruption, governed by grifting and grand larceny – and as a pitiful Pavlovian response at the thought of missed undue enrichment that is coming out as cries of foul.

What Trotman said may have sound basis but it was delivered in unprofessional political parlance. The grand take away is that this Coalition is engaging in the same covert behavior that it decried when it was in the Opposition…a takeaway that could have been avoided at the Communications/Public Relations level.

The fact is, Guyana’s natural resources and government –owned service delivery systems are the property of the people; even if there was massive misappropriation of millions of dollars for the failed Amalia Falls project, quiet gifting of land along the country’s defunct train lines, the siphoning of funds and unconscionable compensation for the unqualified engineers in the fiber optic debacle.

Guyanese have a right to know what is being done with their property, as well as, the prerogative to reject the advancement of any argument that suggests a waiting period, before they are told what is being negotiated on their behalf.

There’s a growing disquiet amongst the electorate.

They are now beyond jaded.

Many went to the polls as swing voters, identifying political matters with a transcendent moralism, casting their votes more for moral order than the traditional political ideology and ethnicity. They were tired of being marginalized by a government that flagrantly stole from them, that offered no hope to the generations after them.

The swing vote mattered.

This is political capital that cannot be squandered.

Behind the strategic and tactical problems- not to emphasize the frequent humiliations – things are not coming out right from the Coalition. It’s time for it to sense the limits of its actions, as voter reaction confirms a constantly diminishing yardage of these limits.

People are aware of the discovery of the humongous reserves; know that the harvesting of oil will bring in billions of dollars. Why not give them a sense of how this thing works, an idea of how the contracts are being negotiated?

It is the petroleum contracts that detail the flow of money; that will tell them if Exxon, an investor renowned for rapacious behavior, is not going to hog the revenue from the two blocks…Stabroek and Lisa. There is growing trepidation that Exxon owns 45% of the stake, Hess owns 30% and the Chinese via CNOOC owns 25%. To them that’s 100% of ‘outside’ ownership.

So, tell the people how this thing works, what ownership really means, in this case.

Explain the general parts of the agreement. Let them know, first of all, that the contract will be between the government on behalf of the people of Guyana and oil companies.

Explain that the typical petroleum contract may have hundreds of subsidiaries to it.

Assure them that the contract conforms to the dictates of the Constitution and that the land still belongs to Guyana.

Reassure them that there is built- in environmental protection, biodiversity protection and land conservation – violations of which comprise parts of Exxon’s rap sheet.

Let them know that it is a Production Sharing Contract, that it includes the finding of diesel, butane and petrol as well…that they will all be represented as petroleum in their contract with extractors, that the oil companies will bear the upfront financial burden, pay off their investment expenses, then split the remainder, giving Guyana 50% of those proceeds.

We get that these contracts can be complex, providing for the politics of both government and corporate practices but there is an abundance of empirical evidence that attests to a greater frequency than not of kick backs and payoffs, when transactions are executed in virtual secrecy.

So, answering questions along the way can’t hurt. Moreover, it offers an opportunity for government to let citizens know that it has enlisted the help of proven professionals and the elements of the contract are being discussed on equal footing with these oil magnates …who have designed these contracts… and mostly for their advantage.

The fact is, people are suspicious of outsourcing, engaging foreign countries and conglomerates, offering Guyana’s resources for development because they did not see any benefits or feel the effects of any inflow of revenue, when this happened during the past Administration.

In acceding to power, along with the reins of government, the Coalition inherited a presumption of lawlessness; the image of a government with a Potemkin feel, driven by propaganda and bogus activity, where under qualified and even less suitable staff showed up for work and executed a partisan ideology – much of which steered national gains into individual pockets.

The general sentiment is that elected officials are all corrupt, compromised by the culture of bribe.

And, who can blame them.

Power remains too heavily concentrated in the executive, and, without a robust Judiciary created through long awaited Constitution Reform, the electorate will remain leery of political actions, feeling that there is no real oversight.

This is an opportunity for the Coalition to show that they have chosen the competent ahead of the compromised and that it will go for the upstanding, even if inexperienced.

So stop hemming and hawing…

A refusal to issue contract details, updating upon dramatically changing events, will only cause the Coalition Government to suffer from the twin afflictions of opaque dealings and pernicious intent…not unlike its most recent predecessor.

This new charge for Guyana’s natural resources by these oil titans could become another story of corporate entitlement and government misdeeds or an unprecedented opportunity for economic development.

Oil escalates to a poor country’s most powerful industry – when bad economic planning allows it to subvert other industries …whole other conversation– and is too often allowed to become a parallel government…employing kick back mechanisms and gift envelopes to local officials, to get its way.

We’re not saying that this will happen in Guyana but Exxon, Hess, Halliburton and China’s CNOOC are quite dexterous in these activities and have stood across from various Prosecutors in defense of these activities enough times to be considered pros.

What we are saying is that President Granger, in his eloquent and impressive address to the The Committee on Economic, Social and Cultural Rights (CESCR) at the United Nations on September 28th 2015, spoke of the prodigious potential of the oil find and said that his government’s plans were to ensure that oil revenues reached future generations of Guyana…that efforts to establish a Sovereign Wealth Fund – a state-owned fund established for the benefit of the people, now and future – are well underway.

This lines up with the Coalition’s Manifesto under Natural Resources and the Environment #3: The Fair and Equitable Sharing of benefits arising from commercial utilization of natural resources….

We like the idea of there not being an extractor elite…like there was when logs were being felled by foreigners in our forests.

The promise now is for democratic accountability….

We’re hanging on to that, during this current scramble for the country’s resources…..because the foreign companies that come to the country to make profits never generate wealth for Guyanese….

So far, we’ve only been ripped off.

Reblogged from: http://xpressblogg.com/all-hands-on-oil/

4) Guyana: will its oil boom benefit the people? Al Jhazeera, July 30th, 2018, Video.

https://youtu.be/Akd4RogA-gI

17. Guyana Giant Offshore Petroleum Potential

Guyana Basin - Offshore - MCAL
Guyana Basin – Offshore – MCAL

17. Guyana Giant Offshore Petroleum Potential – V.200618

http://news.exxonmobil.com/press-release/exxonmobil-announces-eighth-discovery-offshore-guyana

@ 20th June 2018 # Breaking News Oil Discoveries

Guyana Discoveries & Prospects – MapStand Ltd. 2008

Inserted April 2019 (published data from Linkedin):

Guyana – Orinduik, prospects

Contents:

1. Comments – Birth Announcement of a Massive Oil Region: on behalf of ” Guyana Basin ” – by Marcel Chin-A-Lien

2. “To Whom it May Concern” – Marcel Chin-A-Lien.

3. Suriname sluit produktiedelings contracten af met ExxonMobil en Statoil, Blokken 59 en 60.

4. ExxonMobil, with Statoil has now also moved into prospecting the Suriname area.

5. Map Suriname Offshore and Onshore Blocks

6. Map Inferred Jurassic Source Rock

7. Map Canje Formation Source Rock (Time equivalent / ” Cousins” of Cenomanian La Luna, Querecual, Naparima Hill Formations)

8. Is Guyana Giving Birth To A New Massive Oil Region? July 31, 2017

9. Guyana Basin, basin floor fans (Liza, Payara)

10. Discovery number 8 – Longtail 1 well

11. Discovery number 9 – On waiting list of 2018: Hammerhead @ 30 aug. 2018 Discovery.

Discovery number 10 – Waiting list 4Q 2018.

Discovery Pontonoe-1 in Suriname @ october 2018?

12. Eco – Orinduik Reserves – sept. 2018

1) Comments Marcel Chin-A-Lien:

In december 2009 I presented ” New Outlook for the Suriname NW Offshore ” in a congress in Trinidad. With the variety of leads, prospects, play types in tandem with the newly designed license areas (Energy Caribbean 2009 Conference, Trinidad, 7-8 December 2009).
This as a sound, comprehensive scientific subsurface and business playground basis. To promote the high prospectivity of offshore Suriname. As part of the strategy and continuous effort of Staatsolie since long ago.

I had the great privilige to serve Staatsolie for an extended period. Herewith also obtaining the opportunity to contribute to Suriname. Where the roots and history of my grandparents, parents, family and therefore also mine are located.

The presentation was based on my own grounded re-interpretation, re-evaluation and integration of all previous subsurface reports and information of the multinationals. Resulting in a whole both new and positive outlook on the petroleum potential of NW offshore.
Novel and repetitive high impact leads, traps, prospects, play types and mini basins were unveiled, mapped and highlighted.
The presentation and its content, at the 2009 Caribbean Oil Conference in Trinidad, fortunately was rated by the attendees as excellent (up to brilliant).

Soon following IOC’s, such as Tullow showed tangible interest in urgently obtaining certain areas presented. Especially after I promoted and discussed the prospects on my workstation with their exploration manager. These were negotiated and diligently signed with PSC’s. In-house Staatsolie, previous to the negotiations we had already analysed, determined and fenced the level playing landscape with the boundaries for the PSC clauses and work program we wished to obtain. This within others based on the size of the prospects and an accompanying valuation and cash flow modelling of the expected petroleum volumes of the prospects.

The present day licensed area covers also the north-eastern part. The Demerara High (some 40,000 km2), since long forgotten and mainly neglected because of 4 dry holes. Such as well Demerara A2-1 drilled 39 years ago, in 1978.

Following my interpretation of the petroleum potential of this area with the 2D available, I created awareness, promoted and presented it in Staatsolie to the BOED. In an effort to obtain budget for a modern 2D survey. Following I designed the specifics for the acquisition area, program and for the processing sequence. This was later acquired and executed.

It is now an authentic joy to see that the whole area, promoted since 8 years ago in Trinidad, is now under license covered by 12 IOC’s and covering more than half of the offshore area of 180,000 square km.

This thanks to the diligent, intelligent, continual updating, upgrading and pro-active promotion of offshore, by the very competitive group of professionals and specialists in Staatsolie.

A real big achievement. Congrats. Fersteri !

Based on the unique petroleum system(s) in this basin, I can only be convinced that the Guyana Basin is an awakening oil giant.
Clearly evidenced by the recent giant elephant discoveries of ExxonMobil in nearby Guyana.

” Birth Announcement ” of a Massive Oil Region: on behalf of ” Guyana Basin “.

In 1965 Guyana Basin proudly announced the birth of its first giant field in onshore Suriname:

Name: Tambaredjo.

Weight: Billion barrel oil field

Parents: Geological and Mining Service (ir. Hugo Coleridge). And Miocene sands at a depth of 150 – 180 metres.

Place: Tambaredjo, Calcutta, Saramacca district, Suriname.

Time: 13 October, 1965.

Details:

Discovered by accident while prospecting for water (….very sorry about that big mistake….).

Carrying out a water-drilling project to supply water to a nearby school and village (….our sincere excuses…but…unfortunately we found a giant oilfield….instead of the clean and abundant water we promised you all….).

Birth of its second and third giant fields was announced by the arrival of Guyanese twin-sisters Liza and Payara. In 2015 and 2017.

The continuing story of the whole Guiana-Suriname basin will certainly  involve many more giant discoveries in the near future.

Brothers, sisters, cousins and nephews of Mr. Tambaredjo, Mrs. Liza and Mrs. Payara.

Such as also in switi Sranankondre.

Guyana Basin, since 1965 slowly awakening, since 2015 accelerating and entering a new, prosperous and exiting booming petroleum cycle.

The big petroleum show is poised to go on.

2) To Whom it May Concern

Sranankondre?

Srananman, ala mala pasensi, nog ff, next december ?

Bigi pokoe en kaseko op Vrijheidsplein, wowww !

Waarde neef Errol, fa waka?

Begin s.v.p. alvast een mooi olie ontdekkingsliedje te componeren. En reserveer ook een datum voor de primeur tijdens het optreden met je gezellige band. Thx in advance.

South South West!

Deel van mijn recente antwoord – email aan mijn zeer lieve oude tante in Switi Sranan: over olie:

Lieve tante,

Om uw vraag te beantwoorden.

Het grote oliefonds waar u het over heeft in uw email. Dat ik u indertijd in 2009 had voorspeld, de olie ?
Terwijl het gras groeit sterft het paard, schrijft u zo vrolijk ?

Die komt zoals eerder beloofd nu wel heel spoedig.
Misschien wel samen met Sint en Piet, dit jaar nog dus, hopelijk:
Maar alles eerst keurig op een rijtje.
Eerst de grote olie Vondst.
Daarna het grote olie Fonds (….oliefonds, waar u het over heeft).
All-In, All-2-You, dus met al het goede en ook de verhoogde AOW, die erbij hoort.
Voor ala Sranansma na switi Sranankondre.

Ik ben slechts een hele simpele exploratie petroleum geoloog.
Die voortdurend snuffelt naar olie, al 40 jaar lang, op 4 continenten.
Dus wat ik zeg, schrijf en beweer is niet zomaar uit de lucht gegrepen.
Niet gegrepen uit de hedendaagse iCloud.
Maar gelukkig gebaseerd op grondige bestudering en op feiten.

Die reuze olie vondst in Sranankondre is zeer zeker op komst.
Nog ff pasensi tante.

Ik hoop dat in december ala Sranansma bigi pokoe en kaseko kunnen gaan dansen.

Ala sma. Zelfs die met bigifutu.
De bigisma, de bigiman’s, de bigitaki’s, de bigifisi’s, de bigifasi’s, de bigimemre’s, de bigidoin’s, de bigidagu’s, de bigi-ai’s, de bigi taki’s.

Gezamenlijk en gebroederlijk met de bigi-popokaisneki, bigitodo, bigi-watradagu, op bigibigi dei.

Op het Vrijheids plein. Voormalig Gouverneurs plein.
En tevens op Bigiwowoyo.
Bigiyari, srefsrefi.
Bigiyari.

Lieve tante,
Zet uw kotomisi maar alvast klaar.
Voor de bigi konfriyari, fesadei en opo opo fesa.
Om de olie ontdekking te vieren.Suriname.

Oli.

Made in Sranankondre, by Canje Formation.

Overigens, Guyana ? Poti sma ??

Zoals men aldaar pleegde te zeggen over de naaste buren ??
Fos’fosi, fosten. Voor 2015.

Tachtig (80) miljard US$ gross is Guyana’s recente reuze olie vondst waard.
Tachtig maal het jaar budget waar de Surinaamse regering en haar ministeries over beschikken voor switi Sranan, per jaar.

Guyana? Poti sma ?
Fos’fosi, fosten. Voor 2015.

Suriname?
Binnenkort, nog ff pasensi tangitangi.

Poti sma nanga poti Kondre??
Fos’fosi, fosten.
Voor 2018.

Tan bun ala famiri, God Bless You All.
Brief van MCAL aan zijn lieve, oude tante C.”

Suriname - Made - Canje Fm Olie - MCAL
Suriname – Made – Canje Fm Olie – MCAL

3) Staatsolie sluit produktiedelings contracten af met ExxonMobil en Statoil, Blokken 59 en 60.

From:http://www.worldnieuws.com/category/dagblad-suriname/ – 13 juli 2017

Staatsolie Maatschappij Suriname N.V. heeft op 13 juli 2017 productiedelingscontracten afgesloten voor twee offshore-blokken. Voor Blok 59 is een overeenkomst getekend met een consortium bestaande uit de oliemaatschappijen ExxonMobil, Hess Corporation en Statoil. Met Statoil is een contract getekend voor Blok 60.

De overeenkomsten zijn het resultaat van Staatsolies ‘Open Door Policy Offshore Suriname’, die liep van 15 september 2015 tot en met 7 september 2016. Gedurende deze periode konden internationale oliebedrijven een bod te doen op open offshore-blokken. Op basis van de vastgestelde criteria zijn de blokken 59 en 60 toegewezen aan respectievelijk het consortium en Statoil. De onderhandelingen met partijen zijn medio oktober 2016 gestart.

De overeenkomsten gelden voor dertig jaar. De contractduur is opgedeeld in een exploratie-, ontwikkelings- en productieperiode. Voor de exploratieperiode is er een minimumwerkprogramma overeengekomen, waarbij onder meer geologisch onderzoek, seismische datavergaring en exploratieboringen zullen worden verricht. Alle kosten in de exploratiefase zijn voor rekening van het consortium respectievelijk Statoil en worden pas terugbetaald nadat zij een commerciële ontdekking doen en die ook in productie brengen. Het contract biedt Staatsolie de mogelijkheid om tot maximaal tien procent te participeren in de ontwikkelings- en productiefasen.

In de productiedelingscontracten is nadrukkelijk aandacht besteed aan inspectie, veiligheid en het milieu. Eveneens zijn er voorzieningen opgenomen voor werkgelegenheid voor lokaal kader, trainingen, sociale programma’s en de wijze waarop de ontmanteling van faciliteiten aan het einde van de petroleumactiviteiten zal plaatsvinden.

Foto: Namens Staatsolie ondertekende Managing Director Rudolf Elias beide contracten. Voor het consortium tekenden Erik Oswald (ExxonMobil), Timothy Chisholm (Hess) en Martijn Smit (Statoil). De overeenkomst voor Blok 60 werd ook door Smit namens Statoil getekend.

Blok 59 is ongeveer 11.500 km2 groot en ligt ongeveer 400 kilometer uit de kust, in waterdieptes van meer dan 1900 meter (ultradiep). Blok 60, met een oppervlak van 6.200 km2, ligt ongeveer 250 kilometer uit de kust, in waterdieptes van 800 tot 1900 meter.

Het Amerikaanse ExxonMobil is het grootste beursgenoteerde olie- en gasbedrijf in de wereld met activiteiten in verschillende delen van de wereld. ExxonMobil heeft samen met haar partners recente, grote olievondsten in Guyana gedaan. Hess Corporation is een groot, onafhankelijk energiebedrijf actief in verschillende landen. Hess heeft samen met haar partners in Guyana de grote olievondst Liza-1 gedaan. In Suriname heeft Hess reeds een belang van 33,3 procent in Blok 42.
Statoil is het staatsoliebedrijf van Noorwegen dat is uitgegroeid tot een multinational actief in exploratie, productie, raffinage en verscheping van olie en gas. Statoil heeft sedert januari 2014
reeds een belang van 50 procent in Blok 54.

4) ExxonMobil, with Statoil has now also moved into prospecting the Suriname area.

An ExxonMobil Corp.-led group and Statoil ASA have been chosen to respectively operate two blocks offshore Suriname.

ExxonMobil Exploration & Production Suriname BV, along with partners Statoil and Hess Corp., have signed a production-sharing contract with Suriname’s state-owned Staatsolie Maatschappij Suriname NV for the 11,500-sq-km deepwater Block 59. ExxonMobil will serve as operator.

Block 59 is 305 km offshore Paramaribo in 2,000-3,600 m of water. It shares a maritime border with Guyana, where ExxonMobil is operator of three offshore blocks, including the one that holds Liza field, where the firm last month made a final investment decision on the first phase of development (OGJ Online, June 16, 2017).

Block 59 also is next to Suriname’s Block 42, where Hess, a Liza partner with ExxonMobil, already has 33.3% interest and Kosmos Energy Ltd. is operator.

Block 59 partners are preparing to begin exploration activities, including acquisition and analysis of seismic data. ExxonMobil, Hess, and Statoil each hold a third of the block’s interest.

Statoil separately signed a PSC with Staatsolie for the 6,200-sq-km Block 60. It lies 250 km offshore in 800-1,900 m of water and is next to Suriname’s Block 54, where Statoil already has 50% interest and Tullow Oil PLC is operator. Block 54 is the site of the Araku prospect on which drilling is planned for this year’s second half. The prospect is a large structural trap that has an estimated resource potential of 500 million bbl of oil.

The agreements for Blocks 59 and 60 are part of Staatsolie’s “Open Door Policy Offshore Suriname,” which took place from September 2015 to September 2016 and allowed bidding from international oil companies. The agreements are effective 30 years.

As part of the contracts, the firms during the exploration phase will pay all costs, which only will be reimbursed if a commercial discovery is made and brought into production. Staatsolie has the option to participate for up to 10% in the development and production phases.

Note: All my inserted figures and maps are taken from published open files on Internet, such as from Staatsolie.

5) Map Suriname Offshore and Onshore Blocks

Suriname - ExxonMobil block - MCAL

Suriname – ExxonMobil block – MCAL

Tullow - oct. 2018
Tullow – oct. 2018

6) Map Inferred Jurassic Source Rock

Map & info from Staatsolie internet publications.

Suriname - Inferred Jurassic SR. - MCAL
Suriname – Inferred Jurassic SR. – MCAL

 

7) Map Canje Formation Source Rock (Time equivalent / Cousins of, La Luna, Querecual,       Naparima Hill Formations)

 Map & info from Staatsolie internet publications

Suriname - Canje Fm. - MCAL
Suriname – Canje Fm. – MCAL

Article taken from:
Contact Matt Zborowski at matthewz@ogjonline.com.
http://www.ogj.com/articles/2017/07/exxonmobil-statoil-to-operate-blocks-59-60-off-suriname.html

8) Is Guyana Giving Birth To A New Massive Oil Region?

Ricardo Martinez Monday, July 31, 2017 – 12:30pm
Suriname, Guyana, ExxonMobil, Liza, offshore, oil and gas, Payara
With the success of ExxonMobil’s Liza discovery, Guyana and Suriname are on E&Ps’ radars again. (Source: Shutterstock.com) 3,726 330

Up until recently, Guyana and Suriname were practically out of the oil and gas industry’s radar in spite of their proximity to oil reserve-rich Venezuela. But that quickly changed in 2015 when ExxonMobil’s (NYSE: XOM) joint venture spotted massive reservoirs in its Guyana offshore acreage. Its Liza discovery made headlines beyond oil and gas media outlets.

On top of that, the American oil giant recently snagged a new deepwater block along with Hess Corp. (NYSE: HES) and Statoil (NYSE: STO) off Suriname’s coast, which is along a maritime border where Guyana blocks have already proven world class potential.

Combined, these recent developments are what some call the birth of a new oil region—the Guyana-Suriname Basin—with never before seen assets that could easily outpace other developments in the Caribbean, including economically sunk Venezuela.

On July 25, with partners Hess and CNOOC, ExxonMobil announced a new find at its Liza Field on top of the originally estimated 1.5 billion barrels of oil equivalent. Analysts have long expected the consortium’s exploration program at Liza to be highly successful, but this new well proves there are plenty of untouched riches available for other industry players in the future.

Around the corner from Guyana’s prolific Stabroek Block with 6.6 million acres—the country’s crown jewel—is Block 59, the Suriname gem with 2.8 million acres. The potential of Suriname’s blocks is still unknown, but the fact that operators are digging in as Liza pours oil out offers plenty hope.

 ” Inserted note Marcel Chin-A-Lien

   To who may be interested.

” Birth Announcement ”  of a Massive Oil Region: on behalf of ” Guyana Basin “.

In 1965 Guyana Basin proudly announced the birth of its first giant field: Tambaredjo giant field, onshore Suriname.

Parents: Geological and Mining Service. And Miocene sands at a depth of 150 – 180 metres.

Place and time: Tambaredjo, Calcutta, Saramacca district, Suriname. Year 1965.

Discovered by accident while prospecting for water (….very sorry about that big mistake….).

Carrying out a water-drilling project to supply water to a nearby school and village (….our sincere excuses…but…we found a giant field… instead of the clean and abundant water we promised you all….).

Subsequent birth of its second and third giant fields was represented by the Guyanese twin-sisters Liza and Payara. In 2015, 2017.

The continuing oil story will probably involve many more giant discoveries in the near future.

Brothers, sisters, cousins and nephews of Mr. Tambaredjo, Mrs. Liza and Mrs. Payara.

Such as in switi Sranankondre.

Guyana Basin, since 1965 slowly awakening, since 2015 accelerating and entering a new, prosperous and exiting booming petroleum cycle.

9) Guyana Basin, basin floor fans

Guyana - Berbice Canyon and Basin Plain - Gustavson Associates 2008 - Fig 4-9 - MCAL
Guyana – Berbice Canyon and Basin Plain – Gustavson Associates 2008 – Fig 4-9 – MCAL

10) Discovery number 8: Longtail 1 well @ 20th June, 2018

http://news.exxonmobil.com/press-release/exxonmobil-announces-eighth-discovery-offshore-guyana

11) Discovery number 9: On the waiting list, soon, 2018.

12) Eco – Orinduik Reserves

Eco - Reserves - 9/2018
Eco – Reserves – 9/2018

 

 

 

16. Guyana’s oil find $2.7B barrels

16. Guyana’s oil find $2.7B barrels – V.010817

Contents:

0. Arrangement Guyana Government with ExxonMobil.

How much money would Guyana get from ExxonMobil offshore oil production ? – Note Marcel Chin-A-Lien

1.Guyana’s oil find estimated at $2.7B barrels – July 29, 2017 – www.kaieteurnewsonline.com

2.ExxonMobil secures environmental permit ExxonMobil secures environmental permit – Eighth well to be drilled – Jun 13, 2017 News 0 Comments – www.kaieteurnewsonline.com

3. Several questions unanswered about nation’s oil find – July 31, 2017 – www.kaieteurnewsonline.com

0) Arrangement (PPL) Guyana Government with ExxonMobil

How much money would Guyana get from ExxonMobil’s offshore oil production ?

The contents of the arrangement that the Guyana Government in 1999, has signed and apparently recently renegotiated with ExxonMobil, has never been published.

Therefore there is a lot of uncertainty and public discussions on transparency going on regarding this important item.

This to know how much money Guyana would get from its offshore production.

In 1998 Guyana signed an arrangement (PPL) with CGX.

My educated-guess is that the arrangement (PPL) signed with ExxonMobil in 1999 could resemble the arrangement signed previously with CGX.

The contents of this PPL can be found by researching Internet publications.

The Petroleum Prospecting License (PPL) was signed between CGX Energy,Inc.(Company) and the Government of Guyana (Government) on June 24, 1998.

The main articles are:

Cost recovery production allocation is as follows.

Maximum Cost Recovery is 75% during the first 3 years, afterwards 65%.

Profit Oil Split (Developer Share): During the first 5 years, 50% for the first 40,000 b/d. And 47% for Production above 40,000 b/d. After 5 years, 45 % for all production.

The Developer does not pay income tax. The PPL provides that the income tax is paid from the Government’s share of the profit oil.

The Company has an exemption from VAT, exercise taxes, duties, fees, levies and from property tax.

The Company does not pay royalty. This is considered to be included in the Government’s share of profit oil.

Training expenses of US$ 40,000 per year are required, only during the exploration period. These are qualified as exploration expenses.

Annual license rental payments of US$ 40,000 per year are required during the exploration and production period.

In my opinion this represents a very good deal (arrangement) for the Company.

And a rather ” inconvenient deal ” for the Government.

Tip that can benefit a country with billions of US$:

Always be so diligent to first design, negotiate and only later sign your own PSC.

Customised with those clauses and articles you wish to have.

Consult with clever and seasoned PSC and E&P specialists and advisors with worldwide experience. Once signed it is extremely difficult to change and adapt it substantially to your benefit.

From what I perceive from publications the Government did recently renegotiate the original PPL with ExxonMobil and obtained somewhat better conditions.

Including a royalty and a better overall share.

One would assume that the original 1999 PPL was rather favourable for ExxonMobil. Given that it was signed in a period when there was relatively little interest of IOC’s in offshore Guyana.

As is usual in such cases and in high risk, still non-oil-proven basins, it is to be assumed that Guyana has granted rather favourable (“soft”) conditions to ExxonMobil. In order to attract exploration investments with a clear work program, including seismic and drilling.

Now that it has become a proven basin, it is a different ball game.

Contracts with new entrants could be negotiated with a much better share for Guyana.

By focussing on items such as the royalty percentage, ring fencing, the ceiling for cost recovery. By drastically optimising its profit share, from the profit oil. Immediately after the IOC has recouped its investments from the ” cost oil ” .

Financial engineering, valuation and cash flow modelling, in tandem with the expected production profiles from the fields are fundamental in this respect.

The main objective of Guyana should be to maximise its petroleum wealth by encouraging appropriate levels of offshore activities.

To this end Guyana must design a robust fiscal system with for example the following characteristics. It should provide a fair return for both the state and the international companies. It has to be clear and avoid undue speculation, just as is now frequently surfacing in the press. Administration has to be efficient without undue rules, permits and burdens. At the same time it should provide enough flexibility and create a healthy, competitive competition and market efficiency.

A much different Petroleum Sharing Contract is certainly highly recommended in my opinion.

How much money would Guyana get from ExxonMobil’s offshore oil production ?

The following estimate represents merely my own and personal opinion.

Assuming that the ExxonMobil PPL contains the same articles as the PPL with CGX.

A ballpark estimate of the monies involved is as follows.

Precise data must be obtained by making a full DCF economic analysis.

Assumptions are:

Gross oil production volume of 1.5 billion barrels, 160 thousand /bbls /day /during 13 years, oil price US$ 50 / barrel, Capex-Opex 11 billion US$, initial production starting 2020:

Total oil revenue is some 75 billion US$.

Total profit oil is 68 billion US$.

Guyana Government Profit Share is some 35 billion US$.

This amount will be received in the period 2020 – 2033.

Almost 3 billion US$ per year.

Payout (end of negative cash flow) is reached in about 4 years, in 2024.

The economics of the Liza – Payara – Snoek giant fields development is highly profitable, with an IRR exceeding 100%.

Marcel Chin-A-Lien – Advisor Petroleum Exploration & Production, Business-Commercial-Policy Development.

1) Guyana’s oil find estimated at  $2.7B barrels

Jul 29, 2017 News 0 Comments –  www.kaieteurnewsonline.com –  V.30717

-Says govt. will receive revenue from day one

ExxonMobil’s Operations Manager, Doug Mc Gehee, on Thursday updated a room full of entrepreneurs about the oil giant’s activities in Guyana. This was at the launch of the eighth edition of the Georgetown Chamber of Commerce and Industry’s (GCCI) Business Guyana Magazine.

Mc Gehee painted a bright picture about what Guyana can expect when oil production begins. So detailed was Mc Gehee’s presentation that GCCI’s Nicholas Boyer, said that he learnt a lot and was reminded of many details surrounding ExxonMobil’s activities in Guyana.

However, much of what was said focused on the drilling and exploration activities itself as opposed to the agreements that it has with the government on oil production. Mc Gehee spoke extensively about the drilling activities and went into some technicalities about the drilling activity.

He noted that the overall estimation of oil already discovered in Guyana is now between 2.25 billion and 2.75 billion oil equivalent barrels. This, according to Mc Gehee, represents oil bearing rocks found in Liza one, two, three and four wells, Liza deep, Payara and Snoek. He reminded that oil was not found in commercial quantities at the SkipJack well.
Mc Gehee even joked that when Skipjack was found empty, they decided that the luck was with Liza so they named the others Liza three, Liza four and Liza deep.

The Operations Manager said that ExxonMobil is committed to exploiting the full potential of the Stabroek Block and “so we will keep drilling.”
He said that about 120 barrels of oil will be produced a day for the first 20 years in Guyana.
During his speech, President of GCCI Deodat Indar charged Mc Gehee to shed light on a few issues. Indar was keen to note that the GCCI is pleased that a world class company such as ExxonMobil has invested heavily in Guyana.

He said, “We are committed to working with you. It is with a degree of excitement that I say, I am pleased to see the announcement that over 140 Guyanese companies now supply either goods or services to ExxonMobil offshore operations.
“Also that you have created a Local Content Center aimed at developing Guyanese businesses to become oil industry compliant suppliers.”
Indar said that it takes a supply boat approximately 10 hours travelling at 9.5 nautical miles per hour to reach the offshore operations compared to 24hours from Chaguaramas, Trinidad to reach Exxon Offshore Operations.

He said that this speaks to time and costs, obviously Guyana being cheaper in this case. He added, “So I am also pleased to see the contract for the onshore base being awarded right here in Guyana, which I understand, Muneshwers’ are hiring Guyanese like crazy.”
The Chamber President noted that ExxonMobil has license to explore 6.6 million acres of land offshore Guyana. “To put that in perspective means that the Island of Trinidad can fit 5.2 times in the blocks now controlled by ExxonMobil.

“The world class finds in the Liza field and Payara Field say clearly that the oil reservoirs are huge. In some corners of the oil industry this is termed, ‘basin masters’. So with this large resource at your control comes a huge responsibility to the Guyanese people.”
He then charged Mc Gehee to inform this gathering “how you see the role of Exxon in the development of Guyana.” But Mc Gehee did not say too much on this.
“Let us understand where you intend to direct resources to build internal capacity in the areas of labour, providing goods and services to you as a major operator. Over the past three years you have conducted exploration and drilling activities in Guyana.

“We would like to see more Guyanese involvement in the workforce for low end jobs such as cooks, chippers and painters, ablebodied riggers, ablebodied Unlimited riggers, Banksmen on the supply boats and Stena Carron if that’s possible at this time.”
In this regard, Mc Gehee said that already, 60 to 70 percent of the crew on the supply vessel is Guyanese. He said that more are to be employed by ExxonMobil. However, he did not speak to how a Guyanese business can bid to provide service to Stena Carron.

Guyana - Payara 2 Giant discovery - ExxonMobil - MCAL
Guyana – Payara 2 Giant discovery – ExxonMobil – MCAL

“At the end of the day it is Guyanese taxpayers who will be footing the bill as a deduction from its future earning; therefore it is only fair that we be given first priority as they say in Canada, for all things soap, rope and dope. “

2) ExxonMobil secures environmental permit ExxonMobil secures environmental permit –   Eighth well to be drilled – Jun 13, 2017 News 0 Comments — www.kaieteurnewsonline.com

While politicians and anti-corruption advocates alike continue to call for more transparency in the activities of ExxonMobil and its negotiations with the Government of Guyana, the oil giant continues to move closer to

(Photo: The Stena Carron will be part of the drilling programme at the Payara-2 well.)

getting its production licence. Kaieteur News understands that within the last week, the Environmental Protection Agency (EPA) granted ExxonMobil its Environmental Permit. ExxonMobil’s Senior Director of Public and Government Affairs, Kimberly Brassington confirmed this yesterday.

Brassington said that the Environmental Permit is for the Liza phase 1 development project.She said, “Before a development project goes forward there are two key projects that Exxon, as an operator, looks for—the first is to have the Environmental Permit and then Production Licence.”

Brassington continued, “It is significant that we have the Environmental Permit to go forward with the project and now we are waiting on the Production License which will come on the government.” Brassington said that the final investment decision will follow the receipt of the production licence.

Back in May 2015, ExxonMobil made its first announcement of a huge oil find in the Liza-1 well and encountered more than 295 feet (90 metres) of high-quality oil-bearing sandstone.

A second well was drilled – Liza-2 – and the company confirmed the finding as “significant,” with a potential recoverable resource of 800 million to 1.4 billion barrels of oil equivalent.

Drilling operations on ExxonMobil’s Skipjack prospect, the company’s third well in the Stabroek Block offshore Guyana, yielded disappointing results. It was reported that the company did not find commercial quantities of hydrocarbons within that well.

The Liza-3 appraisal well was subsequently drilled to a total depth of 18,100 feet in 6,000 feet of water on a location about 2.7 miles from the Liza-1 discovery.

The well hit around 200 feet of net pay “in the same high-quality reservoirs” as the first two Liza wells, according to ExxonMobil partner Hess, which further solidified the potential recoverable oil in the reservoir.
EIGHTH WELLMeanwhile, the company through its affiliate Esso Exploration and Production Guyana Limited (EEPGL), is gearing up to drill its eighth well in the Stabroek Block offshore Guyana.

In an advertisement published in last Monday’s edition of the Kaieteur News, the Maritime Administration Department (MARAD) stated that the EEPGL will commence the drilling programme at the Payara-2 well next Tuesday, June 20.

This programme is scheduled to last for a three-month period.The drill site is approximately 108 nautical miles from the coast of Guyana and covers an area of one square kilometre.A previous well was drilled at Payara – Payara-1 – and is ExxonMobil’s second oil discovery on the Stabroek Block. It encountered more than 95 feet of high quality, oil bearing sandstone reservoirs.

The well data will be analyzed to better understand the full potential of the well. The Snoek-1 well discovery was announced in March 2017. Snoek is ExxonMobil’s third oil discovery on the Stabroek Block and was drilled in a new reservoir. It encountered more than 82 feet of high quality, oil-bearing sandstone reservoirs.

The well data is being analyzed to better understand the full potential of the well. Kaieteur News contacted ExxonMobil’s Head Office in Georgetown yesterday, and was told that the drill ship, Stena Carron is currently wrapping up an exercise at the Liza-4 well and will soon move over to the Payara area.

The drilling operation at the Payara-2 well, will utilise the following vessels: Stena Carron, M/V Cat Island, M/V Fast Titan, M/V Hannah Chouest and the HOS Commander.All mariners are required to stay clear of these vessels and navigate with caution when in this vicinity.

3) Several questions unanswered about nation’s oil find.
Jul 31, 2017 News 0 Comments — www.kaieteurnewsonline.com

– Georgetown Chamber of Commerce

The Georgetown Chamber of Commerce and Industry (GCCI) still has many unanswered questions about the future of Guyana with oil as one of the main resources contributing to the country’s economy.

GCCI recently launched the eight edition of its yearly magazine—Business Journal. This year’s edition focused on “the promise of oil.”
Because of the theme of the Magazine, GCCI invited an executive of ExxonMobil to speak at the event as well as Minister of Natural Resources, Raphael Trotman. While ExxonMobil’s Operations Manager, Doug Mc Gehee attended the event; Minister Trotman was a no show.

However, GCCI was hoping to have the Minister shed light on many issues at the event.
During his speech, GCCI President, Deodat Indar said that the Chamber is committed to working with the Minister and the Ministry of Natural Resources. He said, however, that like any good partner, the chamber will constructively criticize when necessary for the good of the private sector and by extension the Guyanese workers.

Indar commended Minister Trotman in his absence for his outreach with respect to consultation on the oil refinery prospects for Guyana, local content policy and the Petroleum Commission Bill.
He then expressed hope that Trotman can make a few things clear to the members of the Chamber who were present at that forum.
“Minister, in your delivery, I would like to first charge you to give this gathering of great minds here your thinking and intention on the local content policy that is currently in its draft stage, in terms of: the date we should expect an approved policy? And, what model was used as a framework to develop the current draft policy?”

With respect to the Petroleum Commission Bill that is before a parliamentary select Committee; Indar said that the GCCI is very interested in knowing, “What external model was considered in the drafting of the bill? And, was it Newfoundland, Norwegian, Australian, Alaskan?”

Photo; President of GCCI Deodat Indar

Also, Indar expressed hope that the Minister would explain the proposed Petroleum Commission Board and its makeup, independence, appointment, remuneration and removal of Board members.
Further, the GCCI president wanted to know how the bill meshes with good governance, transparency and being Bi-partisan.
“We see from many parts of the daily media and on social media that we have the potential to be a wealthy nation with flow of oil money. Guyana can witness an economic explosion with the Gross Domestic Product (GBP) growing between 400 to 2000% in the next two decades.”

He continued, “We also know as seasoned business people that basic management principles dictate a company with a diversified base of products and services are likely to be healthy and sustainable, these same principles apply to running a country.”

The businessman said that it is imperative that Guyana learns from the mistakes of others and recognizes that any country that has its economy dependent on one or two sectors will be doomed by it in the long term. He pointed to what is going on in Venezuela where 95.6 percent of its economy is dependent on oil which among other things has fractured its society. Indar said that a diversified economy will lead to a sustainable economy.

With that being said, Indar expressed hope that Trotman can shed light on government’s plan to ensure a diversified economy.
Indar said too that the GCCI hopes that the government is already working on strategies for the most effective use of oil revenues. He said, “We would like to see expenditure in the area of; education, healthcare, infrastructure such as bridges, roads, ports, ICT, quality infrastructure and programs for the alleviation of the poor.”

Finally, Indar turned his attention to the outstanding Sovereign Wealth Fund policy.
He noted that the Sovereign Wealth Fund is supposed to be a rainy day fund. He said however that the GCCI found that some countries use monies from their Sovereign Wealth Fund for current year running expenditure that are supposed to be funded from normal revenue cycles of government. Indar expressed his opinion that, “this is not what a SWF should be; I have just describe what would be tantamount to putting your money in a bag with holes if government is to take this approach. I warn against it.”

The President of the Chamber said that it would be welcomed if Trotman can give explanations on “What model was used to develop the framework for the SWF and when would we expect a first draft to be release so we can provide commentary?”
While all those answered requested by Indar remain outstanding, a few questions were answered by ExxonMobil’s Operations Manager, Dough Mc Gehee.

He gave those who gathered a detailed run down on the operations. Mc Gehee noted that the overall estimation of oil already discovered in Guyana is now between 2.25 billion and 2.75 billion oil equivalent barrels. This, according to Mc Gehee, represents oil bearing rocks found in Liza one, two, three and four wells, Liza deep, Payara and Snoek. He reminded that oil was not found in commercial quantities at the Skipjack well.

Mc Gehee even joked that when Skipjack was found empty, they decided that the luck was with Liza so they named the others Liza three, Liza four and Liza deep.
The Operations Manager said that ExxonMobil is committed to exploiting the full potential of the Stabroek Block and “so we will keep drilling.”
He said that about 120 barrels of oil will be produced a day for the first 20 years in Guyana.

4)

 

15. Guyana. ExxonMobil announces second giant field.

Guyana - Payara 2 Giant discovery - ExxonMobil - MCAL
Guyana – Payara 2 Giant discovery – ExxonMobil – MCAL

15. Guyana. ExxonMobil announces second giant field – Payara – 500 million barrels. V.020817

Stabroek Block contains 2.25 billion – 2.75 billion oil-equivalent barrels. July 25, 2017.  

 

Guyana - ExxonMobil - Payara 2 giant field - MCAL
Guyana – ExxonMobil – Payara 2 giant field – MCAL
Guyana - ExxonMobil - Payara 2 giant field - MCAL
Guyana – ExxonMobil – Payara 2 giant field – 12 publications – MCAL

Contents:

0. Note Marcel Chin-A-Lien – Arrangement Guyana Government with ExxonMobil –

How much money would Guyana get from ExxonMobil’s offshore oil production – July 27, 2017

1. ExxonMobil announces second giant oilfield offshore Guyana – Payara – 500 million barrels found – July 25, 2017 – D.Chabrol

2. ExxonMobil strikes more oil offshore Guyana – value could be US$6.2 billion –

3. Guyana: ExxonMobil says Liza to flow at 100,000 barrels per day – Jan 29, 2017,  Kaieteur News

4. Another find confirms Guyana’s oil deposits larger than envisaged – March 31, 2017, Kaieteur News

5. ExxonMobil to continue exploring in Guyana waters despite Venezuela’s claim – Map – June 24, 2015, Caribbean360

6. Guyana basin floor fans (Liza, Payara)

Deep-Water-Champion1

0) Arrangement Guyana Government with ExxonMobil

How much money would Guyana get from ExxonMobil offshore oil production ?

Note of Marcel Chin-A-Lien

The contents of the arrangement that the Guyana Government in 1999, has signed and apparently recently renegotiated with ExxonMobil, has never been published.

Therefore there is a lot of uncertainty and public discussions on transparency going on regarding this important item.

This to know how much money Guyana would get from its offshore production.

In 1998 Guyana signed an arrangement (PPL) with CGX.

My educated-guess is that the arrangement signed with ExxonMobil in 1999 could resemble the arrangement signed previously with CGX.

The contents of this PPL can be found by researching Internet publications.

The Petroleum Prospecting License (PPL) was signed between CGX Energy,Inc.(Company) and the Government of Guyana (Government) on June 24, 1998.

The main articles are:

Cost recovery production allocation is as follows.

Maximum Cost Recovery is 75% during the first 3 years, afterwards 65%.

Profit Oil Split (Developer Share): During the first 5 years, 50% for the first 40,000 b/d. And 47% for Production above 40,000 b/d. After 5 years, 45 % for all production.

The Developer does not pay income tax. The PPL provides that the income tax is paid from the Government’s share of the profit oil.

The Company has an exemption from VAT, exercise taxes, duties, fees, levies and from property tax.

The Company does not pay royalty. This is considered to be included in the Government’s share of profit oil.

Training expenses of US$ 40,000 per year are required, only during the exploration period. These are qualified as exploration expenses.

Annual license rental payments of US$ 40,000 per year are required during the exploration and production period.

In my opinion this represents a very good deal (arrangement) for the Company.

And a rather ” inconvenient deal ” for the Government.

Tip that can benefit a country with billions of US$:

Always be so diligent to first design, negotiate and only later sign your own PSC.

Customised with those clauses and articles you wish to have.

Consult e.g. with a clever and seasoned PSC and E&P specialists and advisors with worldwide experience. Once signed it is extremely difficult to change and adapt it substantially.

From what I perceive from publications the Government did recently renegotiate the original PPL with ExxonMobil and obtained somewhat better conditions.

Including a royalty and a 50% – 50% overall share.

One would assume that the original 1999 PPL was rather favourable for ExxonMobil. Given that it was signed in a period when there was relatively little interest of IOC’s in offshore Guyana.

As is usual in such cases and in high risk, still non-oil-proven basins, it is to be assumed that Guyana has granted rather favourable (“soft”) conditions to ExxonMobil. In order to attract exploration investments with a clear work program, including seismic and drilling.

Now that it has become a proven basin, it is a different ball game.

Contracts with new entrants could be negotiated with a much better share for Guyana.

By focussing on items such as the royalty percentage, ring fencing, the ceiling for cost recovery. By drastically optimising its profit share, from the ‘ profit oil “, immediately after the IOC has recouped its investments from the ” cost oil ” .

Financial engineering, valuation and cash flow modelling, in tandem with the expected production profiles from the fields are fundamental in this respect.

The main objective of Guyana should be to maximise its petroleum wealth by encouraging appropriate levels of offshore activities.

To this end Guyana must design a robust fiscal system with for example the following characteristics. It should provide a fair return for both the state and the international companies. It has to be clear and avoid undue speculation, just as is now frequently surfacing in the press. Administration has to be efficient without undue rules, permits and burdens. At the same time it should provide enough flexibility and create a healthy, competitive competition and market efficiency.

A much different Petroleum Sharing Contract is certainly highly recommended in my opinion.

How much money would Guyana get from ExxonMobil’s offshore oil production ?

The following estimate represents merely my own, personal opinion.

Assuming that the ExxonMobil PPL contains the same articles as the PPL with CGX.

A ballpark estimate of the monies involved is as follows.

Precise data can be obtained by making a full DCF economic analysis.

Assumptions are:

Gross oil production volume of 1.5 billion barrels, 160 thousand /bbls /day /during 13 years, oil price US$ 50 / barrel, Capex-Opex 11 billion US$, initial production starting 2020:

Total oil revenue is some 75 billion US$.

Total profit oil is 68 billion US$.

Guyana Government Profit Share is some 35 billion US$.

This amount will be received in the period 2020 – 2033.

Almost 3 billion US$ per year.

Payout (end of negative cash flow) is reached in about 4 years, in 2024.

The economics of the Liza – Payara – Snoek giant fields development is highly profitable, with an IRR exceeding 100%.

Marcel Chin-A-Lien – Advisor Petroleum Exploration & Production, Business-Commercial-Policy Development, PSC’s.

1) ExxonMobil announces second giant oilfield offshore Guyana – Payara – 500 million barrels found

> Inserted note at october 2018:

ExxonMobil announced its ninth discovery offshore Guyana at the Hammerhead-1 well on August 30, proving a new play concept for potential development. Hammerhead-1 encountered approximately 197 feet (60 meters) of high-quality, oil-bearing sandstone reservoir. The well was safely drilled to 13,862 feet (4,225 meters) depth in 3,373 feet (1,150 meters) of water.

The company said there is potential for additional production from significant undrilled targets and plans for rapid exploration and appraisal drilling. A second exploration vessel, the Noble Tom Madden, is due to arrive in Guyana in October to accelerate exploration of high potential opportunities and will commence drilling at the Pluma prospect approximately 17 miles (27 kilometers) from Turbot. <

IRVING, Texas–(BUSINESS WIRE)–Exxon Mobil Corporation (NYSE:XOM) today announced it has discovered additional oil in the Payara reservoir offshore Guyana, increasing the total Payara discovery to approximately 500 million oil-equivalent barrels.

These positive well results increase the estimated gross recoverable resource for the Stabroek Block to between 2.25 billion oil-equivalent barrels and 2.75 billion oil-equivalent barrels.    

The well was successfully drilled by ExxonMobil affiliate Esso Exploration and Production Guyana Limited and encountered 59 feet (18 meters) of high-quality, oil-bearing sandstone in the Payara field.

It was safely drilled to 19,068 feet (5,812 meters) in approximately 7,000 feet (2,135 meters) of water. The well is only 12 miles (20 kilometers) northwest of the recently funded Liza phase 1 project on the Stabroek Block, which is approximately 130 miles offshore Guyana.

“Payara-2 confirms the second giant field discovered in Guyana,” said Steve Greenlee, president of ExxonMobil Exploration Company. “Payara, Liza and the adjacent satellite discoveries at Snoek and Liza Deep will provide the foundation for world class oil developments and deliver substantial benefits to Guyana. We are committed to continue to evaluate the full potential of the Stabroek Block.”

The Stabroek Block is 6.6 million acres (26,800 square kilometers). Esso Exploration and Production Guyana Limited is operator and holds 45 percent interest in the Stabroek Block. Hess Guyana Exploration Ltd. holds 30 percent interest and CNOOC Nexen Petroleum Guyana Limited holds 25 percent interest.

ExxonMobil, the largest publicly traded international oil and gas company, uses technology and innovation to help meet the world’s growing energy needs. ExxonMobil holds an industry-leading inventory of resources, is the largest refiner and marketer of petroleum products, and its chemical company is one of the largest in the world.

2) ExxonMobil strikes more oil offshore Guyana – value could be US$6.2 billion

Stena Carron oil drill ship

Stena Carron oil drill ship

US oil giant ExxonMobil made its third significant discovery in its drilling explorations offshore Guyana.
ExxonMobil’s partner, Hess Corporation made this announcement in its third-quarter earnings on Wednesday, noting that the Liza 3 exploratory well’s net present value could be US$6.2 billion based on calculations from the Bank of Montreal (BMO) Capital Markets.

Liza 3, the fourth well spud by the super major, is in the Stabroek block, about 193 kilometres offshore Guyana.   

In late June, Exxon’s drilling results at Liza 2 revealed more than 58 metres of oil-bearing sandstone reservoirs in Upper Cretaceous formations. The well was drilled to 5475 metres at 1692 metres water depth. Drilling results confirmed recoverable resources to be between 800 million and 1.4 billion barrels of oil equivalent. Data from the Liza 2 well test is being assessed.

In May 2015, Exxon confirmed its significant oil discovery at its Liza 1 exploration well, where more than 295 feet of high-quality oil-bearing sandstone reservoirs was encountered.
The Liza wells are being drilled with the Stena Carron harsh environment drillship.
On September 8, ExxonMobil announced that its third exploratory well, Skipjack (the third well drilled and not Liza 3 as reported in the local media) was unsuccessful since it did not yield commercial quantities of hydrocarbons.
ExxonMobil spud Liza 3 after Skipjack turned up unfavourable. Skipjack was a separate prospect 25 miles northwest of the Liza wells.
The Liza 3 well, like Liza 2, will be focused on testing the flank of the Liza structure to determine the aerial extent of the reservoir.
In July 2016, ExxonMobil submitted a development plan for Liza to Guyana’s Environmental Protection Agency to begin the environmental review process.
That plan calls for a pair of rigs to drill development wells from two drill centres, each with a corresponding water injection site to the east.

Business site Bloomberg in June this year reported that ExxonMobil’s oil discovery off the coast of Guyana may hold as much as 1.4 billion barrels, twice the size of the previous estimate, making it potentially worth about US$70 billion based on current prices.
Bloomberg observed that this announcement comes as the oil industry emerges from the worst market slump in decades. Since dipping to a 12-year low in January, Brent crude oil, the international benchmark for crude oil, has risen nearly 80 per cent to about US$50 a barrel.
However, the discovery may not add to global oil supplies for years as deepwater finds can take half a decade or more to bring into production.

ExxonMobil Country Manager Jeff Simmons had announced that the US super major was likely to start production in 2020 with up to 100,000 barrels per day.
He noted though that the estimated 100,000 barrels per day would not remain constant for the proposed 20-year period that the company would be drilling, since there would be continuous drilling and actual production of oil, causing the output to fluctuate.
According to a BMO report on Oil and Gas 360, ExxonMobil plans to use two drillships to simultaneously drill development wells beginning in 2019.

Exxon holds a 45 per cent interest in the project, with Hess holding 30 per cent, and the remaining 25 per cent belonging to China State-owned offshore oil producer CNOOC.
ExxonMobil is expected to make an announcement on this new find sometime this week.

3) Guyana: ExxonMobil says Liza to flow at 100,000 barrels per day

Jan 29, 2017  Kaieteur News –  17 production wells planned

Trinidad (Oil and Gas Journal)- ExxonMobil Corp.’s giant Liza discovery offshore Guyana will have an average production of 100,000 b/d of oil when it begins flowing in 2020 according to the company’s Country Manager Jeff Simons.

Country Manager Jeff Simons

It also expects to produce 165 MMscfd of natural gas that will be mainly used for re-injection into the wells.
Speaking last week at the Energy Chamber of Trinidad and Tobago’s annual energy conference, Simmons said the company will use a floating production, storage, and offloading (FPSO) unit to produce the oil and would then export it, and raised the possibility of it being refined in nearby Trinidad and Tobago.  

He told delegates that the company planned to drill 17 production wells with subsea tiebacks to the FPSO and that ExxonMobil was confident it could meet the early start up deadline because of its use of “cutting edge” technology.

Simmons said no decision had been taken as of yet on whether ExxonMobil would use one or two drillships during the development stage. He noted that ExxonMobil has always been committed to the maximum use of local content but admitted that during production very few jobs will be created in Guyana because a total of 60 people will be required for the production of the oil.

ExxonMobil’s Country Manager said the company has had to use Trinidad and its services during the exploration phase due to the Caribbean island’s relatively close proximity, its long history in oil and gas, and its capacity to service the industry.

Asked if he thought that the company’s production out of the Stabroek block could increase with additional discoveries in the offing, Simmons was careful to point out that there was no certainty in exploration and pointed to the Skipjack prospect, which he said was a geological lookalike to Liza and turned up a dry hole.

“Before drilling Liza our partner left us and we were looking for a new partner because we were not prepared to take the risk alone. Luckily we got Hess and Nexen and luckily we drilled Liza 1 before we drilled Shipjack, which, if you look at them, they look like a mirror image, and one was a massive find while the other failed. So I hope we will find more oil but I can only speak to what we know is there.” Simmons told the conference.

Earlier this month ExxonMobil and its partners announced its Payara-1 well offshore Guyana as its second discovery on the Stabroek block (OGJ Online, Jan. 12, 2017). The Payara-1 well targeted similar aged reservoirs that were proven successful in the Liza discovery.
The well was drilled by ExxonMobil affiliate Esso Exploration and Production Guyana Ltd., and encountered more than 95 ft of high-quality, oil-bearing sandstone reservoirs. It was drilled to 18,080 ft in 6,660 ft of water. The Payara field discovery is about 10 miles northwest of the Liza discovery.

ExxonMobil also announced that in addition to the Payara discovery, appraisal drilling at Liza-3 identified an additional high-quality, deeper reservoir directly below Liza field, which is estimated to contain between 100-150 million boe.

The Liza 1 well encountered more than 295 ft of high-quality oil-bearing sandstone in May 2015. With the second well on the block, Liza 2, the company confirmed the finding as significant with a potential recoverable resource of 800 million-1.4 billion boe of high-quality oil.

Esso Exploration and Production Guyana Ltd. is operator and holds 45% interest in the Stabroek block. Hess Guyana Exploration Ltd. holds 30% interest and CNOOC Nexen Petroleum Guyana Ltd. holds 25% interest.

4) Another find confirms Guyana’s oil deposits larger than envisaged – March 31, 2017.     Kaieteur News

Another find confirms Guyana’s oil deposits larger than envisaged

The Stena Carron drillship

Another discovery by United States (US) oil and gas giant – ExxonMobil, has confirmed that Guyana’s oil deposits are larger than what was previously envisaged by experts.

The Stena Carron drillship has moved back to the Liza area to drill the Liza-4 well. (File Photo)

The ExxonMobil Corporation, as promised, yesterday announced positive results on its sixth well – Snoek – located offshore Guyana, confirming a new discovery on the Stabroek Block. Drilling targeted similar aged reservoirs as encountered in previous discoveries at Liza and Payara.  

The announcement would come days after top officials and experts in the field of oil and gas journeyed to Guyana to participate in a major conference which was hosted in the nation’s capital, Georgetown.
Government announced that ExxonMobil was set make a major announcement on its latest well.

According to insiders, the findings so far would suggest that the deposit from the wells are accumulatively over 2.5 billion barrels of potential recoverable resources – way beyond what was previously estimated to be found in the Stabroek Block.
Back in May 2015, ExxonMobil announced a huge oil find in the Liza-1 well and encountered more than 295 feet (90 metres) of high-quality oil-bearing sandstone.

With the second well on the block, Liza-2, the company confirmed the finding as “significant,” with a potential recoverable resource of 800 million to 1.4 billion barrels of oil equivalent.

Drilling operations on ExxonMobil’s Skipjack prospect, the company’s third well in the block offshore Guyana, yielded disappointing results. It was reported that the company did not find commercial quantities of hydrocarbons within that well.

The Liza-3 appraisal well was subsequently drilled to a total depth of 18,100 feet in 6,000 feet of water on a location about 2.7 miles from the Liza-1 discovery. The well hit around 200 feet of net pay “in the same high-quality reservoirs” as the first two Liza wells which would further solidify the potential recoverable oil in the reservoir.

The Payara-1 well – the fifth well – located approximately 10 miles (16 kilometres) northwest of the Liza-1 discovery, was drilled by ExxonMobil affiliate Esso Exploration and Production Guyana Limited (EEPGL), and encountered more than 95 feet (29 metres) of high-quality, oil-bearing sandstone reservoirs. The well was safely drilled to a depth of 18,080 feet (5,512 metres) in 6,660 feet (2,030 metres) of water.

According to the Company’s website, the latest discovery at the Snoek well demonstrates the continued success the company has achieved in this ‘technically complex play’.

EEPGL commenced drilling of the Snoek well a little over a month ago and encountered 82 feet (25 metres) of high-quality, oil-bearing sandstone reservoirs.

The well was reportedly safely drilled to 16,978 feet (5,175 metres) in 5,128 feet (1,563 metres) of water on March 18. The Snoek well is located in the southern portion of the Stabroek Block, approximately 5 miles to the southeast of the 2015 Liza-1 discovery.

“As we continue to evaluate the full potential of the broader Stabroek Block, we are also taking the necessary steps to ensure the safe, cost-efficient and responsible development of this world-class resource, which can provide long-term, sustainable benefits to the people of Guyana,” said Steve Greenlee, the President of ExxonMobil Exploration Company.

The Guyana Government yesterday issued a statement welcoming the announcement made by ExxonMobil.
The administration noted its satisfaction with the ‘steady and safe progress’ being made in the execution of the exploratory work programme and congratulated the Captain and crew of the Stena Carron for the continued good results of their endeavours.

“The news of another find offshore Guyana is a source of great pride and pleasure for all Guyanese. The Government of the Cooperative Republic of Guyana, through the Ministry of Natural Resources, will continue to work with ExxonMobil and its partners in the exploration and development of resources in the Stabroek Block of the Guyana Basin even as it continues to engage and update the citizens and important stakeholders about the preparations for petroleum production and other related activities,” the release stated.

Meanwhile, following the drilling exercise Snoek, the Stena Carron drillship has moved back to the Liza area to drill the Liza-4 well – the seventh well – which is approximately 102 nautical miles from the coast of Guyana and covers an area of one square kilometre.

The Stabroek Block is 6.6 million acres (26,800 square kilometres).
EEPGL is operator and holds 45 percent interest in the Stabroek Block. Hess Guyana Exploration Ltd. holds 30 percent interest and CNOOC Nexen Petroleum Guyana Limited holds 25 percent interest.

Meanwhile, the RV Furgo Explorer will commence a geotechnical survey within the Stabroek Block of the Guyana Maritime zone. This exercise is scheduled for a period of six months.

5)  ExxonMobil to continue exploring in Guyana waters despite Venezuela’s claim

Deep-Water-Champion1CARIBBEAN360  – JUNE 24, 2015

GEORGETOWN, Guyana, Wednesday June 24, 2015 – Don’t expect Guyana to stop its offshore oil exploration because Venezuela is claiming territorial waters where the “black gold” was recently discovered.

President David Granger has made it clear that his government will continue to back oil giant ExxonMobil in its work because the exploration is taking place in Guyana’s exclusive economic zone.  He said he had met with officials from the company and assured them that they had nothing to fear as far as their operations in Guyana’s waters were concerned. 

Venezuela’s President Nicolás Maduro issued a decree on May 25, claiming sovereignty over Guyana’s territorial waters in the Essequibo region of the Atlantic Ocean. Maps created by Venezuela’s National Organisation for Rescue and Maritime Safety (ONSA), after the decree, indicate that the claim would include a large part of the Stabroek Block, where ExxonMobil discovered oil a month ago.

Granger said the Caribbean Community (CARICOM) has been notified of Guyana’s situation and leaders would be formally briefed on the situation at the 36th Heads of Government Conference in Barbados next week.

In addition, all the countries of the Organization of America States (OAS) and Union of South American Nations (UNASUR) have been notified of Venezuela’s claim.

Granger has described Venezuela’s claim as a “legal absurdity” and the worst intrusion on Guyana’s sovereignty.

“It is an affront to the nation and it collides with internal maritime law; it is completely in breach of the United Nations Convention on the Law of the Sea,” the president said.

On May 20, ExxonMobil, the world’s largest refiner of petroleum products, disclosed that it found a deposit of a “significant” amount of oil in the Stabroek Block, about 120 nautical miles offshore Guyana. The company said the discovery was made in one of the two wells it dug, which realized more than 295 feet of high-quality oil-bearing sandstone.

The total area allotted to ExxonMobil for exploration (the Liza Area or the Stabroek Block) covers 26,806 square kilometres.

Source: http://www.caribbean360.com/news/exxonmobil-to-continue-exploring-in-guyana-waters

Map showing Atlantic areas of Guyana claimed by Venezuela.

Venezuela has adjusted Decree 1787 adding a clarification that the delimitation of the Zodimain Atlantica (part of which covers almost all of Guyana’s maritime territory) is to be determined pending the resolution of the 1966 Geneva Agreement.

6) Guyana basin floor fans (Liza, Payara)

Guyana - Berbice Canyon and Basin Plain - Gustavson Associates 2008 - Fig 4-9 - MCAL
Guyana – Berbice Canyon and Basin Plain – Gustavson Associates 2008 – Fig 4-9 – MCAL

14. Guyana – IMF helping Government

Guyana
Guyana

IMF - Guyana - MCAL
IMF – Guyana – MCAL

 

14. IMF helping Government – V.010817

Guyana is presently experiencing and witnessing the Black Gold Rush.

These posts illustrate what is going on in this country in the process to prepare itself for the oil boom period. And its efforts to transform in an oil-curse-proof country, such as with the help of IMF.

Contents (3):

1. IMF helping Guyana build capacity to manage oil proceeds

2. IMF encourages Guyana to improve public procurement

3. How much money would Guyana receive from ExxonMobil’s offshore oil production? – Marcel Chin-A-Lien – 29 July, 2017

1) IMF helping Guyana build capacity to manage oil proceeds

July 21, 2017 - www.kaieteurnewsonline.com

With Guyana shifting into position to start oil production in 2020, its ability to properly manage the proceeds is expected to see a significant boost, now that the International Monetary Fund (IMF) is here to provide a helping hand.

Minister of State Joseph Harmon, during the weekly post-Cabinet press briefing at the Ministry of the Presidency in Georgetown, told media operatives yesterday that the team is here providing technical assistance and advice to government with regards to building capacity to manage the monies that will come from the sector.

The delegation, he said, came here following a request made to the organisation by the Finance Minister, Winston Jordan.
Harmon said that Cabinet met the team recently and was informed of the delegation’s mission here.
The Minister said that the Mission Leader informed government that Guyana had become eligible for assistance from the IMF under a donor-funded trust fund.

The team is also expected to carry out a scoping assessment of government’s policy direction.
That assessment, Harmon explained, will enable the IMF to determine the areas in which assistance could be provided.
The Minister noted also that the team will meet with persons and agencies involved in managing revenues from the sector.
Further, a note providing the details of the IMF assessment and forms of assistance will be presented to the government at the end of the mission.

The team’s presence here would come three months after the Executive Board of the IMF concluded its Article IV consultation with Guyana.
Under this article, the organisation holds bilateral discussions with members usually every year, where a staff team visits the country, collects economic and financial information, and discusses with state officials the country’s economic developments and policies.
On return to headquarters, the staff prepares a report, which forms the basis for discussion by the IMF’s Executive Board.
The IMF Directors upon reviewing that compiled report, lauded the government’s plans to establish a comprehensive framework for managing its upcoming oil wealth, and stressed the importance of having a transparent and rules-based framework in place before production begins.

The IMF is an international organization comprised of 189 countries working together to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.

2) IMF encourages Guyana to improve public procurement – Jul 23, 2017 News 0 Comments

The International Monetary Fund (IMF) is encouraging the government to bring its procurement

Finance Minister, Winston Jordan

systems in line with international best practices so as to enhance the quality of public investment.
The global body made this statement in its 2017 report on Guyana’s economy.
According to the IMF, enhancing the efficiency of public investment management could help foster economic growth. It noted that public investment has been relatively low for the past two years. The IMF believes that this is due to the 2015 elections, and delays in the procurement and execution of projects in 2016.

It said, “This has been a drag on construction, with spillovers to other sectors. It is therefore important to avoid similar delays in 2017. Bringing project selection, public procurement and investment management in line with international best practices would enhance the efficiency, timeliness and quality of public investment, including through Public Private Partnerships (PPPs).”
In the near term, the IMF said that the government could help to unlock additional external concessional financing, reduce domestic financing needs and bring foreign exchange into the economy.

The officials noted that the IMF’s Public Investment Management Assessment (PIMA) could help streamline the appraisal, selection and execution of projects. So far, the Government has expressed an interest in that assessment.

Perceptions of corruption and favouritism have for years, sullied the image of Guyana’s public procurement system.
However, the APNU+AFC Government and top officials at the National Procurement and Tender Administration Board (NPTAB) have made it clear that while there remains room for improvement, they are very satisfied with the progress they have made in arming the system with effective anti-corruption mechanisms.

This was supported and reiterated by NPTAB Head, Berkley Wickham.
Wickham had informed this newspaper on some of the key initiatives and interventions made since he assumed office as Chairman of the NPTAB.

He said that every initiative or intervention undertaken thus far was aimed at changing the long held perception of a tainted public procurement process.

NPTAB Head, Berkley Wickham

The difficulty of this task was never underestimated but its success is rooted in the need to achieve transparency, accountability, fairness, integrity and efficiency, he added.
The NPTAB head said, “We are not there yet but significant advances have been made. Some of these are increases in the Threshold limits for Regional, Ministerial/Agency Tender Boards; work in progress in developing debarment procedures; the Bid Protest Committee has been established and is functional; The Public Procurement Commission has been established; and we have been an active participant in the Task Force for the development of the Caricom Public Procurement Regime”

Wickham said that NPTAB has also been working with the Ministry of Business to facilitate the participation of small businesses and women owned businesses in the Public Procurement process.

Pursuant to Section 17 of the Procurement Act 2003, Wickham said that the National Procurement and Tender Administration Board has been organizing training in public procurement.

The existing legislation does not provide for e-procurement, he added. He said that an upcoming legislation review will provide for this.
He promised, too, that a debarment procedure will be fashioned for implementation.
The NPTAB Head said, “There was further training in February in contract compliance and management. We have been very busy this past year. In my opinion, we are poised to take procurement out of a long period of stagnation.”
Wickham said that moves are being made to ensure that the Procurement system is elevated onto a pathway where electronic government procurement is the major tool to build a world class procurement process in Guyana.

Additionally, at a national consultation on Caricom Single Market and Economy (CSME) Public Procurement System requirements, Finance Minister Winston Jordan had outlined that a number of changes are in the pipeline.

The Finance Minister said that under the Public Procurement Modernization Project, for which funding has been provided by the Inter-American Development Bank under a Technical Cooperation Agreement called Public Procurement Modernization and Financial Management Strengthening in Guyana, Component One will provide support to improve efficiency and value for money in public procurement through strategic planning and introduction of e-government procurement.

He said that the successor initiative by the CSME is Development and Implementation of the Infrastructure and Instruments for an Integrated CSME Procurement Regime.
Jordan said that the deliverables include the Procurement Bill and Regulations, Procurement Software and Hardware Installation, Development of Training modules and the ability to roll out these modules online.

3) How much money would Guyana get from ExxonMobil’s offshore oil production ?

Assuming that the ExxonMobil PPL contains the same articles as the PPL with CGX.

This is a simple estimate of the monies involved. But it gives a fair idea of what everyone wants to know.

Precise data can be obtained by making a full economic analysis.

Assumptions are:

A gross oil production volume of 1,5 billion barrels, average production of 160 million/day during 13 years, oil price US$ 50 / barrel, Capex-Opex 11 billion US$, initial production in 2020:

Total oil revenue would be some 75 US$ billion.

Total profit oil is 68 billion US$.

Guyana Government profit share is some 36 billion US$. This amount would be received in the period 2020 – 2033.

Payout is successful in about 4 years.

The economics of the Liza – Payara – Snoek giant fields development is thus highly profitable, with an IRR exceeding 100%.

Marcel Chin-A-Lien – Advisor Petroleum Exploration & Production, Business-Commercial-Policy Development, PSC’s.

” FYI:

All-in-1, Available-to-Serve-You.

For grounded, vintage stewardship to successfully find lots of oil, develop your business and get sustained value for money ?

Contact & Contract Me at marcelchinalien@gmail.com ”

13. Guyana Offshore – CGX back in game

Guyana - Berbice Canyon and Basin Plain - Gustavson Associates 2008 - Fig 4-9 - MCAL
Guyana – Berbice Canyon and Basin Plain – Gustavson Associates 2008 – Fig 4-9 – MCAL

13. Guyana Offshore – CGX back in game – V.290717

Contents (4):

0. Arrangement (Petroleum Prospecting License) of Guyana with CGX and ExxonMobil – My note -July 28, 2017

1. CGX back in the game; looking to drill 6 wells over next 2yrs offshore Guyana – from Oil Now – April 23, 2017

2. CGX Energy to restructure debt ahead of future oil exploration in de-risked Guyana basin – from Business News – May 2, 2017

3. CGX acreage, prospects, leads map – from CGX Energy Inc. – July 2017

4. http://www.cgxenergy.com/cmsAssets/docs/analysts/Tudor%20Pickering%20Holt%20Co%20International%20LLP/TudorPickeringHoltCo-TheGuianas-Mar18-11.pdf

0) Arrangement (Petroleum Prospecting License) Guyana Government with CGX and ExxonMobil.

The contents of the arrangement that the Guyana Government in 1999, has signed and apparently recently renegotiated with ExxonMobil, has never been published.

Therefore there is a lot of uncertainty and public discussions on transparency going on regarding this important item.

This to know how much money Guyana would get from its offshore production.

Previously, in 1998 Guyana signed an arrangement (PPL) with CGX.

My educated-guess is that the arrangement signed with ExxonMobil in 1999 could resemble the arrangement signed previously with CGX.

The contents of this PPL can be found by researching Internet publications.

The Petroleum Prospecting License (PPL) was signed between CGX Energy,Inc.(Company) and the Government of Guyana (Government) on June 24, 1998.

The main articles are:

Cost recovery production allocation is as follows.

Maximum Cost Recovery is 75% during the first 3 years, afterwards 65%.

Profit Oil Split (Developer Share): During the first 5 years, 50% for the first 40,000 b/d. And 47% for Production above 40,000 b/d. After 5 years, 45 % for all production.

The Developer does not pay income tax. The PPL provides that the income tax is paid from the Government’s share of the profit oil.

The Company has an exemption from VAT, exercise taxes, duties, fees, levies and from property tax.

The Company does not pay royalty. This is considered to be included in the Government’s share of profit oil.

Training expenses of US$ 40,000 per year are required, only during the exploration period. These are qualified as exploration expenses.

Annual license rental payments of US$ 40,000 per year are required during the exploration and production period.

In my opinion this represents a very good deal (arrangement) for the Company.

And a rather ” inconvenient deal ” for the Government.

Tip that can benefit a country with billions of US$:

Always be so diligent to first design, negotiate and only later sign your own PSC.

Customised with those clauses and articles you wish to have.

Consult e.g. with a clever and seasoned PSC and E&P specialists and advisors with worldwide experience. Once signed it is extremely difficult to change and adapt it substantially.

From what I perceive from publications the Government did recently renegotiate the original PPL with ExxonMobil and obtained somewhat better conditions.

Including a royalty and a 50% – 50% overall share.

One would assume that the original 1999 PPL was rather favourable for ExxonMobil. Given that it was signed in a period when there was relatively little interest of IOC’s in offshore Guyana.

As is usual in such cases and in high risk, still non-oil-proven basins, it is to be assumed that Guyana has granted rather favourable (“soft”) conditions to ExxonMobil. In order to attract exploration investments with a clear work program, including seismic and drilling.

Now that it has become a proven basin, it is a different ball game.

Contracts with new entrants could be negotiated with a much better share for Guyana.

By focussing on items such as the royalty percentage, ring fencing, the ceiling for cost recovery. By drastically optimising its profit share, from the ‘ profit oil “, immediately after the IOC has recouped its investments from the ” cost oil ” .

Financial engineering, valuation and cash flow modelling, in tandem with the expected production profiles from the fields are fundamental in this respect.

The main objective of Guyana should be to maximise its petroleum wealth by encouraging appropriate levels of offshore activities.

To this end Guyana must design a robust fiscal system with for example the following characteristics. It should provide a fair return for both the state and the international companies. It has to be clear and avoid undue speculation, just as is now frequently surfacing in the press. Administration has to be efficient without undue rules, permits and burdens. At the same time it should provide enough flexibility and create a healthy, competitive competition and market efficiency.

A much different Petroleum Sharing Contract is certainly highly recommended in my opinion.

Marcel Chin-A-Lien – Advisor Petroleum Exploration & Production, Business-Commercial-Policy Development, PSC’s.

”  All-in-1 Consultant,  Available-to-Serve-You.

For grounded, vintage stewardship to successfully find lots of oil, mineral resources, develop your business and get sustained value for money ?

See <Contact & Contract Me> at marcelchinalien@gmail.com “.

Doei, salu2, ciao, até logo, grüssen, cordialement, salut, добрый день, ajoo, tur kos bon mi dushi hendenan na Switi Sranan i mi famiri na switi Korsou, tan bun allamala !

1) CGX back in the game; looking to drill 6 wells over next 2yrs offshore Guyana
By Oil Now – April 23, 2017

CGX holds the 2nd highest number of blocks in the Guyana-Suriname Basin.
Canadian-based oil and gas exploration company CGX Energy Inc. will soon recommence exploration work offshore Guyana and aims to drill as much as 6 wells over the next two years. CGX had come up empty-handed on previous attempts to hit a payload offshore the South American country, and that, coupled with changing financial conditions with its major shareholder, Pacific Exploration, saw a halt in further exploration activities.

But all that has changed. ExxonMobil and its partners have derisked the area by making significant discoveries of high quality crude in a location known as the Stabroek Block and prudent financial management has seen the fortunes of CGX/Pacific Exploration improving, moving from zero market capitalization to $2.5 billion.

Dr. Suresh Narine, CGX Chairman, says the company is now making a major comeback.

Photo:

Guyana Offshore - CGX - MCAL
Guyana Offshore – CGX – MCAL

Dr. Suresh Narine speaking at Guyana’s first oil and gas conference in March
“This is an extremely healthy company and suddenly CGX is back in the game,” Dr. Narine said.

The oil and gas junior has spent the past four months redoing its geology and is on the verge of recommencing drilling. “Our work plan calls for two wells offshore within the next 2 years. I can tell you that we are looking at six,” he said.

The CGX Chairman made these disclosures to participants of Guyana’s first oil and gas conference and exposition held in March at the Guyana Marriott Hotel. The conference, the next of which is scheduled for March 18-20, 2018, was organized by the Guyana Oil and Gas Association (GOGA).

2) CGX Energy to restructure debt ahead of future oil exploration in de-risked Guyana basin

The cash-strapped Canadian oil exploration company, CGX Energy, continues to borrow monies from its shareholder to stay afloat, and indicated that future oil exploration offshore Guyana would depend on restructuring its multi-million debts to several companies.

Now that American oil-giant, ExxonMobil, has found more than two billion barrels of oil offshore Guyana, CGX Energy hopes that will be an incentive for debt restructuring and further exploration. “While the global downturn in petroleum prices has significantly affected the company over the past two years, the de-risking of the Guyana basin through multiple large discoveries has simultaneously provided enough buoyancy to allow the company to take steps to restructure its debt and prepare to continue exploration,” CGX  said.

The highly indebted CGX Energy has suffered a delay in carrying out further exploration offshore Guyana and hopes that government will favourably consider its request for a new date. “Pursuant to the terms of the Petroleum Prospecting Licences (“PPL“) governing the Corentyne Block, the Company is currently negotiating the terms of an extension of the spud date for its next exploration well on the block. The previous spud date was July 1, 2016,” the company said.

CGX  says it continues to negotiate with its trade creditors, including with respect to the approximately $14.4 million owed to Japan Drilling Co., Ltd. (excluding interest), approximately $9.5 million owed to Prospector PTE. Ltd. (excluding interest), and the approximately $2.9 million owed to Teikoku Oil (Suriname) Co., Ltd. (excluding interest), with a view to determining how to address these significant payables in light of depressed oil prices.

Between March 2016 and April 2017, the company has borrowed a total of 7.1 million Canadian dollars from its major shareholder, Pacific Exploration & Production Corporation, to fund  mainly “monthly general and administrative expenses.” If CGX Energy does not pay the loans, which attract interest rates of 5 percent, then Pacific “has the right to take a pledge of shares of CGX’s subsidiaries.”

The company also announced that Executive Director, Professor Suresh Narine has been given the green-light to purchase shares in the company.

“In conjunction with his appointment, the Board of Directors has agreed to grant Professor Narine incentive stock options to purchase 1,000,000 common shares of the Company. The stock options will be granted on May 2, 2017 pursuant to the Company’s stock option plan and will be exercisable at a price equal to the closing market price on such date.  The options will expire on May 2, 2022,” CGX Energy said in announcing the release of its audited consolidated financial results 2016.

3) CGX acreage map – from cgxenergy.ca/At-A-Glance.aspx – July 27, 2017

Guyana - CGX - acreage map - MCAL
Guyana – CGX – acreage map – MCAL
Guyana - CGX - Prospects and Plays - MCAL
Guyana – CGX – Prospects and Plays – MCAL
Guyana - CGX prospects - Gustavson Associates 2008 - Fig 4-3 - MCAL
Guyana – CGX prospects – Gustavson Associates 2008 – Fig 4-3 – MCAL

Guyana - CGX prospects - Gustavson Associates 2008 - Fig 4-3 - MCAL
Guyana Basin – Stratigraphic Column – CGX 2007 – MCAL

 

Guyana – CGX – Seismic section illustrating basin play concepts and main targets

Guyana - CGX - Equatorial Atlantic Margin Play - MCAL
Guyana – CGX – Equatorial Atlantic Margin Play – MCAL
Guyana - Berbice Canyon and Basin Plain - Gustavson Associates 2008 - Fig 4-9 - MCAL
Guyana – Berbice Canyon and Basin Plain – Gustavson Associates 2008 – Fig 4-9 – MCAL

4)

 

12. Guyana Oil Boom – Sovereign Wealth Fund

12. Guyana Oil Boom – Sovereign Wealth Fund (SWF).
SWF fund needed to build public confidence – V.150817

 July 18, 2017 - www.kaieteurnews.com
Guyana Oil Boom - Sovereign Wealth Fund - - from www.kaieteurnewsonline.com - MCAL
Guyana Oil Boom – Sovereign Wealth Fund – Text & Picture from www.kaieteurnewsonline.com – MCAL

Contents (3):

1. International Monetary Fund and Guyana – www.kaieteurnews.com

2.1 How much money would Guyana get from ExxonMobil’s offshore oil production &

2.2  Guyana urgently needs to set up a Sovereign Wealth Fund &

2.3 Nature and purpose of SWF &

2.4 Size of SWF’s – Marcel Chin-A-Lien, 29 July, 2017

3. Guyana to reform oil laws and gain wealth fund with Commonwealth support – 2 May 2017 – the commonwealth.org

1) International Monetary Fund helping Guyana

Re: re-blogged from: www.kaieteurnews.com

The International Monetary Fund (IMF), in its 2017 report on Guyana’s economy said that the establishment of a Sovereign Wealth Fund (SWF) is important for the building of confidence in the public and in financial markets.
The body noted that the authorities in Guyana have made it a priority to put in place a credible framework for the management of future hydrocarbon revenues. But this framework is yet to be finalized.

IMF said that the framework will contribute toward resolving potential uncertainties regarding how oil revenues would be spent and how they could affect macroeconomic developments. “Once the draft SWF law, and the resource management framework embodied in it, are finalized, it will contribute to building confidence in the general public and financial markets”

IMF said that in order to ensure that the operation of the SWF is consistent with the macro-fiscal objectives, the SWF law should be linked to a fiscal responsibility law. Further, the international body said that all hydrocarbon revenues and any public spending related to these revenues should be channeled through the state budget.

The report noted, “As the SWF investment activities will have direct domestic macroeconomic implications, these activities can be usefully coordinated with relevant authorities such as the owner (Ministry of Finance) and the Bank of Guyana through regular meetings (e.g., quarterly). That can help ensure consistency with the overall macroeconomic policies.”

IMF also said that the building up of assets in a SWF and its investment strategy should be seen in the broader context of Sovereign Asset and Liability Management (SALM) framework. Related aspect for indebted resource-rich countries is striking the right balance between debt repayments and the building up of SWF assets for stabilization purposes.

Hydrocarbon revenues can be used to reduce the stock of government foreign debt to sustainable levels. The exact target for debt reduction would be guided by the FRL. The appropriate level of the stabilization fund should be evaluated in a SALM framework; taking account of interest rate levels and the size of the public debt.”

A SWF is a government-owned investment fund. It has been set up by many countries with oil wealth, and there are several models to choose from.
While the policy to govern the establishment of SWF was to be delivered since last year, the public continues to keep watch for when government will actually make good on its promise.

From all indications, the holdup is not with the Ministry of Natural Resources. Kaieteur News understands that the Bill is in the hands of Minister of Finance, Winston Jordan, and has been with him for some time now.
Minister of Natural Resources, Raphael Trotman, spoke confidently in the National Assembly that the policy would have been delivered to the House in 2016 for discussion and debate. This was as he made his contributions to the 2017 Budget debate.
Last year ended without the policy being taken to the House, and to make matters worse, the second quarter of 2017 is finished and the policy is still to reach Cabinet where it must go before reaching the House.

Trotman has told Kaieteur News that the draft policy was completed by his Ministry and is now with the Ministry of Finance. He refused to be specific as to how long the draft has been with Minister Jordan, but noted that his (Trotman’s) Ministry met its deadline.

Sources at the Ministry of Finance confirmed that the document has been there since January.
Trotman told Kaieteur News that he is confident about the quality of the draft policy, which benefitted from the expertise of the Commonwealth Secretariat, the Guyana Geology and Mines Commission, the Private Sector and the very Ministry that is now doing the review.

Trotman said that when the Ministry of Finance is finished with its review, the Bill will go to Cabinet for approval, then for public consultation, before reaching the National Assembly.

“There is no intention to rush the Bill. We are some years away from production, so there will be consultation, but the point is we have a Bill which the Ministry of Finance is amending,” said Trotman.

In an address to the National Assembly, Trotman had said that it is important that the extractive industries that fuel Guyana’s growth today “also provide for our children tomorrow.”
He told the House that the Sovereign Wealth Fund will enable the government to “protect the economy from the volatile nature of natural resource revenues, help grow and modernize the sustainable non-extractive sectors of the economy, and further enhance the capacity of our people”.

Trotman outlined the considerations for the three sub-funds within the Sovereign Wealth Fund – the Stabilization Fund, Infrastructure and Social Development Fund and Citizens Participation Fund.

He said that the government has already begun seeking advice and guidance on developing such a Fund from the School of Public Policy – University of Calgary and the Commonwealth Secretariat, both of which are equipped with strong expertise on extractive resource governance.

Trotman told the House that the creation of a long overdue sovereign wealth fund will demonstrate to Guyanese and the world at large that hydrocarbon development, and by extension all other extractive industries, can be catalysts for a green economy.

2) Comment Marcel Chin-A-Lien:

2.1 How much money would Guyana get from ExxonMobil’s offshore oil production ?

Assuming that the ExxonMobil PPL contains the same articles as the PPL with CGX.

This is a simple estimate of the monies involved. But it gives a fair idea of what everyone wants to know.

Precise data can be obtained by making a full economic analysis.

Assumptions are:

A gross oil production volume of 1,5 billion barrels, average production of 160 million/day during 13 years, oil price US$ 50 / barrel, Capex-Opex 11 billion US$, initial production in 2020:

Total oil revenue would be some 75 US$ billion.

Total profit oil is 68 billion US$.

Guyana Government profit share is some 36 billion US$. This amount would be received in the period 2020 – 2033.

Payout is successful in about 4 years.

The economics of the Liza – Payara – Snoek giant fields development is thus highly profitable, with an IRR exceeding 100%.

Marcel Chin-A-Lien – Advisor Petroleum Exploration & Production, Business-Commercial-Policy Development, PSC’s

2.2 Guyana urgently needs to set up a Sovereign Wealth Fund (SWF).

Similar to for example Norway (GPF,1990; 922 US$ Billion), United Arab Emirates, Abu Dhabi (ADIA, 1976:828 US$ Billion), Kuwait (KIA, 1953; 524 US$ Billion).

Also Suriname has to start thinking seriously about the structure, details, ins and outs of a possible SWF. To be fully prepared, just in case, for the expected offshore oil boom. To become Oil-Curse-Proof and Dutch-Disease-Proof. Soon??

Oil rich countries that have not set up a transparent SWF have all been severely affected by the Oil Curse.

A most tragic example is oil-rich Venezuela. Its oil age began in the early 20th century. The big gusher in 1922, the Barroso No. 2 well in Cabimas, spewed as much crude as the famed Spindletop well in east Texas two decades before.

In 2013 and 2015 Venezuela had the highest misery index score:

(Global Misery Index – Hanke, John H. “Measuring Misery around the World”. The CATO Institute. Retrieved 30 April 2014;  

“Amid Rationing, Venezuela Takes The Misery Crown”. Investors Business Daily. Retrieved 1 September 2014;

Venezuela: the country that should have been so rich but ended up this poor. www.independent.co.uk, Matt O’Brien, 19 May 2016; Saraiva, A Catarina; Jamrisko, Michelle; Fonseca Tartar, Andre – 2 March 2015.

“The 15 Most Miserable Economies in the World”. Bloomberg. Retrieved 4 March 2015).

Info from Internet, Wikipedia, books, etc. etc.etc.

A sovereign wealth fund (SWF) is a state-owned investment fund that invests in real and financial assets such as stocks, bonds, real estate, precious metals, or in alternative investments such as private equity fund or hedge funds. Sovereign wealth funds invest globally. Most SWFs are funded by revenues from commodity exports or from foreign-exchange reserves held by the central bank. By historic convention, the United States’ Social Security Trust Fund, with $2.8 trillion of assets in 2014, is not considered a sovereign wealth fund.

Some sovereign wealth funds may be held by a central bank, which accumulates the funds in the course of its management of a nation’s banking system; this type of fund is usually of major economic and fiscal importance. Other sovereign wealth funds are simply the state savings that are invested by various entities for the purposes of investment return, and that may not have a significant role in fiscal management.

The accumulated funds may have their origin in, or may represent, foreign currency deposits, gold, special drawing rights(SDRs) and International Monetary Fund (IMF) reserve positions held by central banks and monetary authorities, along with other national assets such as pension investments, oil funds, or other industrial and financial holdings. These are assets of the sovereign nations that are typically held in domestic and different reserve currencies (such as the dollar, euro, pound, and yen). Such investment management entities may be set up as official investment companies, state pension funds, or sovereign funds, among others.

There have been attempts to distinguish funds held by sovereign entities from foreign-exchange reserves held by central banks. Sovereign wealth funds can be characterized as maximizing long-term return, with foreign exchange reserves serving short-term “currency stabilization”, and liquidity management.

Many central banks in recent years possess reserves massively in excess of needs for liquidity or foreign exchange management. Moreover, it is widely believed most have diversified hugely into assets other than short-term, highly liquid monetary ones, though almost no data is publicly available to back up this assertion. Some central banks have even begun buying equities, or derivatives of differing ilk (even if fairly safe ones, like overnight interest rate swaps).

2.3 Nature and purpose of SWF

SWFs are typically created when governments have budgetary surpluses and have little or no international debt. It is not always possible or desirable to hold this excess liquidity as money or to channel it into immediate consumption. This is especially the case when a nation depends on raw material exports like oil, copper or diamonds. In such countries, the main reason for creating a SWF is because of the properties of resource revenue: high volatility of resource prices, unpredictability of extraction, and exhaustibility of resources.

There are two types of funds: saving funds and stabilization funds. Stabilization SWFs are created to reduce the volatility of government revenues, to counter the boom-bust cycles’ adverse effect on government spending and the national economy. Savings SWFs build up savings for future generations.

One such fund is the Government Pension Fund of Norway. It is believed that SWFs in resource-rich countries can help avoid resource curse, but the literature on this question is controversial.

Governments may be able to spend the money immediately, but risk causing the economy to overheat, e.g., in Hugo Chávez‘s Venezuela or Shah-era Iran. In such circumstances, saving the money to spend during a period of low inflation is often desirable.

Other reasons for creating SWFs may be economic, or strategic, such as war chests for uncertain times. For example, the Kuwait Investment Authority during the Gulf War managed excess reserves above the level needed for currency reserves (although many central banks do that now).

The Government of Singapore Investment Corporation and Temasek Holdings are partially the expression of a desire to bolster Singapore’s standing as an international financial centre.

The Korea Investment Corporation has since been similarly managed. Sovereign wealth funds invest in all types of companies and assets, including startups like Xiaomi and renewable energy companies like Bloom Energy.

2.4 Size of SWFs

Assets under management of SWFs increased for the fifth year running in 2013 to a record $5.78 trillion.[15] There was an additional $7.2 trillion held in other sovereign investment vehicles, such as pension reserve funds, development funds and state-owned corporations’ funds and $8.1 trillion in other official foreign exchange reserves. Taken together, governments of SWFs, largely those in emerging economies, have access to a pool of funds totalling $20 trillion. Some of these funds could in future be channelled towards funding development of infrastructure for which there is global demand.

Countries with SWFs funded by oil and gas exports, primarily oil and gas exports, totalled $4.29 trillion as of the end of 2014.[16] Non-oil and gas SWFs totalled $2.82 trillion. Non-commodity SWFs are typically funded by transfer of assets from official foreign exchange reserves, and in some cases from government budget surpluses and privatisation revenue. Asian countries account for the bulk of such funds.

An important point to note is the SWF-to-Foreign Reserve Exchange Ratio, which shows the proportion a government has invested in investments relative to currency reserves. According to the SWF Institute, most oil-producing nations in the Persian Gulf have a higher SWF-to-Foreign Exchange Ratio — for example, the Qatar Investment Authority (5.89 times) compared to the China Investment Corporation (0.12 times) — reflecting a more aggressive stance to seek higher returns

3) Guyana to reform oil laws and gain wealth fund with Commonwealth support – 2 May 2017  

Re-blogged from: thecommonwealth.org/newsroom

“The inputs of partners like the Commonwealth are critical to the success of this country and its people” – Guyana’s Minister of Natural Resources

New oil discoveries off the coast of Guyana mean the country is poised to become a major new petroleum producer in the coming years.

One well drilled in October 2016 has been described by Exxon Mobil as “confirming a world-class resource discovery in excess of 1 billion oil-equivalent barrels”. The find could earn the small South American nation, with a population of about 800,000, multiple billions of dollars in tax revenues.

Guyana’s Minister of Natural Resources, Raphael Trotman, has confirmed the government intends to table new legislation before Parliament with the goal of moving to oil production in 2020.

The Commonwealth Secretariat has been advising the Ministry of Natural Resources since 2013 on the legislative and institutional reforms required to regulate Guyana’s emerging oil and gas industry.

Mr Trotman said: “The Ministry of Natural Resources has been especially fortunate to engage with the Commonwealth for the development of many of its policies, which are now coming of age as the country enters a new phase of development with the advent of its oil and gas industry.”

A new Sovereign Wealth Fund – a state-owned fund which will reinvest oil and gas revenues – and a new Petroleum Commission, a regulatory agency, are centrepieces of the proposed legal and institutional framework.

The Secretariat’s legal and economic experts have advised on draft legislation for the Sovereign Wealth Fund, a draft National Upstream Oil and Gas Policy, and a revision of Guyana’s Petroleum Exploration and Production Act and Regulations.

The reforms will ensure oil revenues benefit ordinary people in Guyana, through job creation and investments in public services and infrastructure

The Commonwealth Secretariat’s oceans and natural resources team has been working “assiduously” with the Ministry, said Mr Trotman. “This level of commitment has been the hallmark of the relationship developed with the Commonwealth team, and is highly valued,” he said.

Daniel Wilde, Economic Adviser on Natural Resources at the Secretariat, said the recent discoveries mean that Guyana is on a path to becoming a significant oil producer. “We are assisting the government ensure that this oil wealth is wisely managed and contributes to sustainable economic development.

“This involves advising the government on how to transparently and effectively regulate the upstream oil industry and helping to establish a Sovereign Wealth Fund. This fund should ensure that oil revenues do not lead to a loss of economic competiveness and that future generations fairly benefit from today’s oil wealth.”

Minister Trotman continued: “Guyana has enjoyed decades of tremendous history and close co-operation with the Commonwealth as a member of the community and partner in development. The Commonwealth’s support for Guyana must be lauded, particularly for the impact made on governance, youth development, environmental stewardship and natural resources management.”

“We, at the Ministry and Government of Guyana, wish to extend sincerest thanks to the Commonwealth team for its unwavering and invaluable support as Guyana transitions from potential to prosperity. The inputs of partners like the Commonwealth are critical to the success of this country and its people. We look forward to continued advancement of our partnership.”

4)

 

10. Guyana Black Gold Rush

Guyana Black Gold Rush - MCAL
Guyana Black Gold Rush – MCAL

Guyana Black Gold Rush

Contents:

0) Note Marcel Chin-A-Lien

1)Halliburton signals investment interest in Guyana’s oil industry – kaieteurnewsonline.com/2017/07/15 – Jul 15, 2017

2)The story within the story. We can learn something from the Trinidad experience. – Leonard Gildarie – July 25, 2017

3) Under construction

0) Note Marcel Chin-A-Lien:

The black gold rush has definitely started in Guyana.

The world is witnessing the developments in a country that is presently in a fast-track transformation process.

To become a most prosperous place with a quality of life where all inhabitants will equally reap the rewards and benefits from the giant oil boom ?

Or is it the beginning of the terrible Oil Curse and the Dutch Disease ??

The first oil and first income for Guyana from the giant offshore oil fields will begin in 2020.
Airlines are rescheduling their routes, including Guyana on their flight schemes.
Small entrepreneurs and businesses are relocating and setting up affiliates in capital Georgetown.

Consultancy and oil service firms are flying in and lobbying to get a foothold in Guyana. Convincing them that they can not do the job on their own and therefore need foreign expertise and wise advise. Above all, that for example consultancy costs can be recouped by Guyana, with an adequate contract construction, via the Petroleum Sharing Contract with ExxonMobil.

>>> A. Stena is currently conducting drilling operations offshore Guyana for ExxonMobil and its joint venture partners Hess and Nexan.

>>> B. Jones Day, an international law firm of the USA and a Norwegian law firm are among the experts hired by the Guyana government to advise on oil and gas.

>>> C. Guyana’s President, David Granger, brought on dr. Jan Mangal, who is Guyanese, as Presidential Advisor on Petroleum. He is an expert in offshore and civil engineering. And has a doctorate in offshore geotechnical engineering from the University of Oxford.

>>> D. A team from the Guyana Oil & Gas Association (GOGA) met with over 15 companies in Canada this week which are looking to partner with Guyana’s private sector for opportunities in the country’s emerging oil and gas sector. The meetings were facilitated by the Trade Commissioner of the Canadian High Commission in Georgetown, Guyana.

Speaking to OilNOW from Newfoundland, Canada, President and CEO of GOGA, Bobby Gossai Jr. said a key benefit from these potential partnerships will be the transfer of knowledge and expertise. “These partnerships can serve to build business relationships, transfer technology, and skills development in the offshore industry,” he said.

Some of the companies and organisations the Guyana team met with include, Canadian Global Maritime, Atlantic Offshore Medical Services, Rutter Inc., Maderra Engineering, EnviroMed Detection Services, GRi Simulations Inc., Crosbie Group Limited, Oceans Limited, Marine Institute of Memorial University, Newfoundland and Labrador Environmental Industries Association, among several others.”

>>> E. Harmon, Trotman host exploratory meeting on oil with EITI-IDB team – Jun 29, 2017 – kaieteurnewsonline.com. A team of officials from the Extractive Industries Transparency Initiative (EITI) of the Inter-American Development Bank (IDB) yesterday afternoon paid a courtesy call on Minister of State, Joseph Harmon for an exploratory meeting.
The meeting also saw the attendance of Minister of Natural Resources, Raphael Trotman and Presidential Advisor on Petroleum, Dr. Jan Mangal, at the Ministry of the Presidency.
The team, according to the Ministry of the Presidency, is exploring the possible roles that the IDB could play in supporting Guyana’s emerging oil and gas sector, and included the IDB Representative in Guyana, Ms. Sophie Makonnen, Lead Oil and Gas Specialist in the Energy Division, Mr. Ramon Espinasa, Economist- Energy, Mr. Lenin Balza and Consultant in the Energy Division of the Infrastructure and Environment Section, Mr. Carlos Sucre.
During the meeting, Minister Harmon said that he and Minister Trotman are both members of a team appointed by President David Granger to advise the Cabinet on matters related to this sector. He noted that the team is led by Minister Trotman and includes Minister of Finance, Mr. Winston Jordan, Minister of Public Infrastructure, Mr. David Patterson, Minister of Business, Mr. Dominic Gaskin and Dr. Mangal.
The Minister assured the IDB team that the Government is confident that their support could benefit the development of policies in the sector.
Meanwhile, Mr. Espinasa advised the ministers that it is essential for the Government to determine how it wants to manage the resources, and that it must ensure contracts are well drafted to ensure the best possible deal for Guyana.
“We are here to support with whatever you need, most probably with what we call technical assistance, and this is concessionary support, and eventually, if that is the case, a loan of different amounts for creating the proper institutions,” he said.
Minister Trotman thanked Mr. Espinasa for his presentation and noted that the IDB has set out different steps that the Government must carefully consider.
“We have had similar presentations made to us and I believe that we are in the process of defining or compartmentalising who does what,” he said.

>>>

1) Halliburton signals investment interest in Guyana’s oil industry
From: kaieteurnewsonline.com/2017/07/15 – Jul 15, 2017

Halliburton, one of the world’s premier oil and gas supply and services companies,(Foto with: Halliburton CEO, Jeffrey Miller (2nd left) with team meeting with Minister Raphael Trotman yesterday)is seeking to open offices in Guyana to offer its upstream oilfield services to oil and gas companies as Guyana moves to becoming an oil producing country.
Yesterday, Minister of Natural Resources, Raphael Trotman, and a team of technical officers of the Petroleum Department of the Ministry of Natural Resources met with Jeffrey Miller, President and CEO of Halliburton, and his team at the Ministry’s head office, Upper Brickdam.
According to the ministry, Miller emphasized the high prospects that are being seen in the Guyanese market and the room for these to develop over the coming years.
Halliburton’s interest in investing in the Guyanese society through capacity building for local vendors and education support through local Universities was highlighted.
“Minister Trotman welcomed this high level visit and was keen to indicate the need for local content to be an important consideration for all companies entering the Guyanese markets. In response, Mr. Miller highlighted Halliburton’s philosophy of having people work where they live, and building the capacity of locals over time to develop the expertise and technical skills needed to service the industry.”
Halliburton was founded in 1919 and offers energy services internationally, ranging from locating hydrocarbons and managing geological data, to drilling and formation evaluation and well construction and completion.
It has operations in some 70 countries around the world and has provided services to some of the largest oil and gas companies in the world including ExxonMobil here in Guyana and elsewhere.

2) The Story Within The Story. We can learn something from the Trinidad experience – Jul 23, 2017 News 0 Comments

By Leonard Gildarie

There are millions and millions of lessons to be learnt from the world over. Singling out the successes and the best practices will have to prove invaluable to our policy makers as we chart the future of this country.

Many countries, on their way to development, have fallen time and again but stood up and continued their steady plod onwards.
We are preparing for oil and the world is looking on with curiousity and envy.

An estimated two billion barrels of oil is confirmed sitting in ExxonMobil’s concessions offshore Guyana and waiting to be exploited.
Guyana badly wants to capitalise. It has signed a production agreement which is for two percent royalty and a 50/50 share of the profits. There is deep worry over that share arrangement, as Guyana is estimated to only collect, at today’s prices, over $7B in royalties annually…a dent in our national budget which this year was $250B.

Of course, ExxonMobil is not here for fun. It will naturally want to maintain the bottom line—profit. Guyana’s find is being hailed as a major one, at a time when prices are low and green energy is seriously becoming a force to be reckoned with.
ExxonMobil has a reported history of playing hardball, leaving some of the countries they operated in what is said to be a worse situation.

In the last century, oil has been the cause of wars and the downfall of quite a few economies. Venezuela is a prime example. Trinidad and Tobago, too, is facing tough times, with foreign currency low, but analysts believe that the situation is temporary as the country corrects itself.

After a tough year of work, I decided to take the family on vacation to the Twin Island Republic, as T&T is known. I had stayed over in the past, but only on working visits and in-transit.
Without a doubt, it is a must-see for all Guyanese. T&T is truly an amazing country with a rich history that is steeped in pride and patriotism.

Its famous ‘doubles’, made from channa and a kind of puri with sauces, are a proud breakfast tradition. It gave the world Brian Lara and Nicki Minaj and has kept the chutney and soca music tradition alive. Let us not dwell on its world famous Carnival.
But for the first-time visitor, T&T’s infrastructure would be the most immediate and compelling thing to take note of. Piarco airport rivals some of the world’s best, complete with jet bridges.

Some of the oil and gas processing facilities in Trinidad

T&T’s road network, with overhead passes, and breathtaking beaches, along with the presence of some of the world’s top hotels like the Hyatt and Hilton, are but part of the lure.

I lost count of the number of malls on the island, some of them rivaling even those in New York. Its heritage sites like the San Fernando hilltop, with its hewn rocks, and Mount St. Benedict, have been drawing thousands of visitors annually.
As I marveled at the strides this little country of just over 1.3M persons, and 1800 square miles, (Guyana is 45 times larger), I kept hearing last week how good we have it in Guyana.

T&T is not worried so much about the state of the economy. However, there is a deep, deep fear over the crime rate.
In 2016, the murder tally was over 470. This year, the murder rate continues to worry, with some of the criminals clearly showing a disregard for the police.
The killings are drug- and gang-related, with kidnappings, robberies, human trafficking and even a rampant trade in body parts (organs), said to be fueling the situation.

US reports have indicated that last year alone, more than 81 percent of the murders were from the use of firearms.
I was warned several times by family and friends to be careful. We traveled in groups and visited crowded areas like the malls.
In some of the areas, families were being warned to keep children close because of kidnappings. The workers even use special stamps for the family to ensure that the children you are leaving with are not being kidnapped.
There are some areas like the famous Laventille where cops are afraid to venture into.
I even heard of cases where the cops seem to be in league with the drug traffickers and criminals. They would give them guns and drugs to sell.
Families are fearful of stepping out. There were news reports last week of foreign nationals being targeted, with studies showing at least 100 criminal gangs existing.

I could not help but ponder on the ironies, in context of the Guyana situation, where the fixation of the crime situation overwhelms worry over jobs and trade.

T&T has done well for itself. It has a 100 years head-start on Guyana with regards to oil. It has evolved from mere oil production to becoming a key player in the production of natural gas.
Visit the port areas, where many of the plants are located. The production refineries are dizzying. Downstream activities have grown and are now textbook examples.

Trinidad and Tobago houses one of the largest natural gas processing facilities in the Western Hemisphere. The electricity sector is fueled entirely by natural gas. Trinidad Generation Unlimited power plant, the second combined cycle plant in the country, with a generating capacity of 720MW, was opened on October 31, 2013.

With 11 ammonia plants and seven methanol plants, Trinidad and Tobago was the world’s largest exporter of ammonia and the second largest exporter of methanol in 2013, according to IHS Global Insight.
Trinidad has tourism and oil. But it has managed to attract some major investments like Nestle and is a major producer of fertiliser, cement, and an array of popular foods that are stacked on the supermarket shelves in Guyana.

T&T is said to be the wealthiest country in the Caribbean as well as the third richest country by GDP (PPP) per capita in the Americas after the United States and Canada. The country’s wealth is attributed to its large reserves and exploitation of oil and natural gas.
The twin island has been attracting like crazy, investments in liquefied natural gas (LNG), petrochemicals, and steel.
T&T, despite the oil, managed to expand to develop a strong manufacturing base, supplying its goods aggressively to the region. While it is the leading Caribbean producer of oil and gas, and its economy is heavily dependent upon these resources, it also supplies manufactured goods.

Significantly, oil and gas account for about 40% of GDP and 80% of exports, but only 5% of employment.
I spoke to quite a number of T&T oil officials last week, including some government officials.

Guyana has a few choices. Because of pre-existing agreements, the country now has little options with regards to altering the ExxonMobil deal, except appealing to the company’s corporate and social responsibilities.

Guyana does not immediately boast an envious array of oil experts. We would do well to insist that Exxon and any new companies that come in, invest in specialised degree courses, engineering included, helping the country to widen the scope of the labour force.

We have quite a few blocks offshore remaining for concessions. Any new exploration company will have to be tied down to agreeing to at least 70 percent of the work force being local, and the use of services right from Guyana.

I was told of another worrying development. There is technology for unmanned rigs offshore. Trinidad boasts of a few of them.
We should not be banking too much on the windfall from oil now. Rather the emphasis should be building local capacity and ensuring we plan long-term. We need to tap into Trinidad. There is much to learn from this little CARICOM state which has capitalised on its opportunities.

The milk has been spilt, but ExxonMobil I am convinced will not be flinching from any suggestions to sit down and help up improve our capacity.
Trinidad, as I said, has had a 100-year head-start. Can we do better in 25 years?
This is where some tough decisions will have to be made for this country.

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