Esso executive on Liza development in GuyanaOctober 19, 2018
Rod Henson, country representative of Esso Exploration & Production Guyana (EEPGL), talks to TOGY about the dynamics of working in Guyana’s new oil and gas industry, the progress and timeline for the Liza phase one project, and how the company is contributing to local development. EEPGL operates the Stabroek block, where nine discoveries have been made since 2015.
• On opportunities and challenges: “Guyana is a fantastic place to work. You find a very supportive government, regulators, public and service industry. Because Guyana has never had an oil and gas industry before, there are some services that do not exist here. This is clearly one of the challenges, and one that we are working to resolve. There are many capacity-building and local content efforts underway. Potential and opportunity for growth are the main strengths of this market.”
• On hydrocarbons potential: “Given the exploration success we’ve had here, we see the potential for up to five FPSO vessels offshore Guyana producing more than 750,000 bopd by 2025. It’s an exciting prospect, with significant revenues for Guyana, ultimately leading to a truly transformational decade ahead – one of development for the Guyanese people, businesses and the country.”
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What is it like to work in the up-and-coming Guyanese market?
Guyana is a fantastic place to work. You find a very supportive government, regulators, public and service industry. Because Guyana has never had an oil and gas industry before, there are some services that do not exist here. This is clearly one of the challenges, and one that we are working to resolve. There are many capacity-building and local content efforts underway. Potential and opportunity for growth are the main strengths of this market.
We have one project approved and we are moving down the road to complete it. Everything is on schedule and we have applied for a second project. We have already seen some knock-on effects in terms of opportunities for businesses.
What are the latest updates on the Liza field development?
We plan to develop the Liza field in two phases. We received approval for phase one in 2017, so we are currently in the process of manufacturing all of the necessary pieces of equipment that will be used. The FPSO is being constructed in Singapore, along with the subsea trees and equipment, subsea umbilicals and beyond.
We are actually starting to drill the wells necessary for phase one now. We have the Noble Bob Douglas drillship about 200 kilometres offshore and we are happy to have the vessel working for us. We have committed to producing first oil in 2020, and we are on schedule for that. We are starting to look at production and how we and contractor SBM are going to operate that vessel, so we are starting to see more recruitment of local talent.
If you look across phase one development, we and our contractors through the first half of 2018 employed more than 700 Guyanese. A little more than 50% of our workforce is Guyanese and we are very proud of this figure, as it is still early in the project. It is exciting to see some local activity, since most of the work being done for the big pieces of equipment is happening internationally.
What will EEPGL be concentrating on in 2019?
2019 will be a very active year for us. It is the year that all the equipment for Liza phase one will arrive in Guyana. The FPSO will sail into the country and all of the subsea equipment will be delivered. We will be involved in a lot of activity as we put all of this equipment together and do all of the commissioning and function and pressure testing to make sure everything is exactly right. We will have a higher level of activity, and at the same time, we will continue to explore other areas of the block and hopefully have more success there.
We have a shorebase in Georgetown on the east bank of the Demerara River. It was started up very early in 2018, and we were happy to move the majority of our shorebase operations here to get more local content. Operationally, it helps us to be a little closer. That base may expand a bit, as we are bringing in a third drillship in October 2018. We envision that base being extremely active. In fact, it has already moved to 24/7 operations.
Some of our contractors for the Liza phase one project are starting to make more commitments in-country and to build offices. We are outgrowing our current office space and will be building a new office complex soon. We are growing to meet our commitments and to operate effectively.
How is EEPGL approaching local content?
Everywhere we work in the world, it is important to us to build local content and help improve capabilities where we can. Through the first half of 2018, EEPGL and our contractors worked with more than 300 Guyanese companies, from large to small.
One of the big initiatives we and our partners have done in the area to help improve the capabilities of Guyanese companies is start a centre for business development. It is a physical building on South Road in Georgetown, and it has several purposes. One is to educate companies about the oil and gas industry through free training, with the objective of helping Guyanese companies enter and compete in the oil and gas sector that is emerging. The centre also helps mentor companies to become ISO 9001-compliant and help build safety and quality programmes so they can better compete in the future.
There is also a web-based portal, and the objective there is to help support our contractors in finding local vendors, and local vendors to be notified about upcoming tenders. In addition, the centre has helped facilitate Guyanese companies making contact with international companies that might work here, eventually forming JVs or partnerships that will through time help the Guyanese companies better compete, not only domestically, but also internationally. This is in the interest of Guyanese companies, and we have seen a lot of successes to date already.
That portal was built by a Guyanese firm called Brainstreet, and it has done such a good job that they are now working internationally to build a similar portal in Vietnam.
How have your partners aided in your development?
EEPGL certainly works closely with our co-venturers, Hess and CNOOC Nexen. We are the operator for the venture, but we actively collaborate and align with them on project activities as we progress towards first oil.
We also have worked closely with local partners through our contributions and sponsorships programmes. We invest in programmes to advance math and science education learning, youth development, social development and more. It’s rewarding to see the positive impacts working with our Guyanese partners.
Looking ahead, what do you see for EEPGL and Guyana?
We are excited to work and partner with Guyana. Given the exploration success we’ve had here, we see the potential for up to five FPSO vessels offshore Guyana producing more than 750,000 bopd by 2025. It’s an exciting prospect, with significant revenues for Guyana, ultimately leading to a truly transformational decade ahead – one of development for the Guyanese people, businesses and the country.
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