Taken as a bloc, there is vicariously good news for the region by way of Guyana as global oil giant ExxonMobil which found a humongous amount of oil and gas off the coast last year has given its clearest indication yet that it will actually start production in a few years.
The company said in a formal announcement this week that it is awarding contract to SBM Offshore, a company headquartered in The Netherlands to build the vessel that will be used as a floating production and storage platform for oil and gas flowing from its fields more than 120 miles from the Guyana coast.
This is as several other Caribbean countries including Jamaica Barbados, Jamaica, the Bahamas and Grenada are working feverishly to award exploration contracts to established companies hoping to find commercial quantities of oil and gas. Jamaica, for example, said it will get help from Ecuador and Venezuela in exploration endeavors.
Of the 15 nations in the Caribbean trading group, Trinidad is by far the largest producer, exporter and refiner of oil and has substantial amounts of gas reserves. It recently signed a purchase and sharing agreement with neighboring oil and gas-rich Venezuela. Trinidad is one of the largest gas exporters to Eastern Seaboard states in the United States.
Behind Trinidad are Suriname, Belize and Barbados which at peak less than a decade ago had been producing about 1,200 barrels of oil daily from a few inland wells. It also imports gas to augment the meager production at home.
Barbados recently awarded an offshore bloc to Spanish owned Repsol and BHP Billiton to drill for commercial deposits. Islanders are confident that gas and oil are offshore being just about 200 miles away from Trinidad. Guyanese had for decades made a similar reckoning being neighbors with Trinidad, Venezuela, Brazil and Suriname. Exxon proved them right.
Now, Guyana with its already apparently unlimited gold, timber, bauxite, uranium, manganese resources as well as large quantities of rice, sugar, fish and shrimp and other revenue earning sources, seems set to become the region newest oil producer.
Exxon has already drilled five wells with only one coming up dry since it announced in mid 2015 that its Liza 1 well had offered deposits of up to 1.4 billion barrels. It is set to announce the results from Payara, its latest well, anytime now but officials say such a move could upset slowly rising international prices so they are holding off for now.
In all it plans to drill up to 17 wells in this phase of operations with some being set aside to store water from wells and gas until a decision is taken as to what to do with gas officials say.
In its latest missive to the world, Exxon said SBM will work as front end engineering and design contractors for the floating platform and subject to a final investment decision next year, will construct, install and operate the vessel.
”Liza development activities are steadily progressing and we’re excited to reach this important milestone,” said Neil Duffin, president of ExxonMobil Development Company. “We look forward to working with the government of Guyana to develop its valuable resources, which have the potential to provide long-term, sustainable benefits to the country.”
The oil and gas find has forced authorities into a mad scramble to prepare a nation whose economy had largely depended on primary exports of gold, sugar, rice, bauxite and timber to switch to oil and gas without any expertise in this area.
So the geology and mines commission is now rushing to send professionals overseas for training, authorities are updating laws for everything from local content clauses to possible oil spills.