oil & gas

Don't neglect food security in pursuit of oil - UG Vice-Chancellor

The University of Guyana is keen to widen its educational offers to include the oil and gas sector, but in this pursuit Vice-Chancellor, Professor Ivelaw Griffith, has warned that there is a role for the university in maintaining Guyana’s food security. “We also recognize that we cannot neglect who we essentially are,” Professor Griffith told students at oil and gas presentation held on the university’s Turkeyen campus on Wednesday last.

He added, “We are an agricultural society and we will not do ourselves and prosperity well to neglect the agriculture sector.” According to Prof. Griffith, a feasibility team to look at establishing a food and nutrition institute at the university has been established. The team met for the first time in January to start the journey of ensuring that in partnership with other entities in Guyana and internationally, the university plays a vital role in food security.

One of the international agencies supporting the initiative is the Food and Agriculture Organization of the United Nations (FAO) which has provided US$5000 to start the study. Prof. Griffith noted that the university wants to ensure that connectivity with natural science, agriculture, earth and environmental science and social science, will enable partnerships with National Agricultural Research & Extension Institute (NAREI), Guyana School of Agriculture (GSA), Ministry of Education and public health. “We don’t neglect food security, especially since there is an opportunity for Guyana, not only in regard to the Caribbean, but in regard to being part of South America where we have some competitive advantage, but we need to stop viewing it as potential and we need to actualize it,” Prof. Griffith stated.

In relation to preparing the University for the oil and gas sector, Prof. Griffith said that they are ramping up what is being done across all faculties. He suggested changing the name of the faculty of technology while still catering for current programmes such as industrial and mechanical engineering. “Whether you want to do simply petroleum engineering or as we have committed to not neglecting mechanical, electrical and civil, we’ve got to do better physics, we got to do better chemistry, we got to do better math. The investments, we are going to argue, will have to do the whole of the university,” Prof. Griffith pointed out.

He outlined that the university is being proactive in its approach to the oil and gas sector by reaching out to other entities to establish partnerships. Prof. Griffith stated that he sent a member of the law department to an oil and gas seminar last year. In addition, last year, teams were sent to the University of Alberta, Canada and the University of the West Indies, Trinidad campus. “We cannot wait until all is available here for us to do what we need to do. We’ve got to partner. We have to develop and be prepared to offer relevant courses in the oil and gas industry,” Prof. Griffith stated. There are plans to engage experts in the oil and gas industry for a series of talks dubbed, Campus Conversations, which will aim to educate students and faculty members on the emerging sector.

NOTE: The grant from the FAO for the feasibility study is US $50, 000 and not US $5,000

Article adapted from: https://www.kaieteurnewsonline.com/2018/02/13/dont-neglect-food-security-in-pursuit-of-oil-ug-vice-chancellor/

UK BASED COMPANY WANTS TO HIRE UG STUDENTS

Some University of Guyana graduates and others in the disciplines of technology, business and other fields of study will cash in big time as a world renowned firm has shown interest to not only hire them, but also to prepare them for the upcoming oil and gas industry. This announcement was made by VICE Chancellor, Professor Ivelaw Griffith.

Ministry of the Presidency distances govt from Petroleum Advisor's criticisms of ExxonMobil contract

About five hours after Dr. Jan Mangal, Petroleum Advisor to President David Granger delivered a number of hard-hitting criticisms of the controversial ExxonMobil contract, government sought to dissociate itself from his positions.

“The Ministry of the Presidency puts on record that Dr. Jan Mangal, Presidential Advisor on Petroleum, is not authorised to speak on behalf of His Excellency, President David Granger or the Government of Guyana,” the Ministry of the Presidency said in a one-line statement issued at 9:50 PM.

Mangal delivered his presentation between 3 PM and shortly after 5 PM in his capacity as Presidential Advisor on Petroleum as was stated on the University of Guyana programme for its “Discussion on the Government of Guyana’s Vision for the Oil and Gas Sector”. He was introduced by that designation and at no time did he say whether or not he was speaking in his private or official capacity.

He stopped short of saying whether or not he would like to see the contract revised, opting only to remark that he would make known his views known in the coming weeks.

Mangal’s latest short-term contract expires in March.

At the forum, Mangal said the two percent royalty that Guyana secured from ExxonMobil in the 2017 Production Sharing Agreement was way below the globally accepted norms of between 10 and 20 percent. No tax on oil revenues did not find favour with Mangal who has worked in several oil producing nations.

He, however, welcomed the 50-50 percent split in profit oil.

Taking credit for pushing for the release of the ExxonMobil contract in December 2017, Mangal said that was needed to stimulate public debate so that civil society and the wider Guyanese community could determine whether it is a good or bad deal.

Mangal said he was also behind efforts to have the contract reviewed by experts from the International Monetary Fund (IMF) and the Inter-American Development Bank (IDB) to review contract.

At the same time, he cautioned against amending the contract because that could send a bad signal to investors.

Minister of Natural Resources, Raphael Trotman has repeatedly defended the contract, saying that previously there were no provisions for funding training and corporate social responsibility and there was no real royalty. He said the contract takes into consideration the political, financial and border-security related risks associated with the Guyana-Venezuela boundary controversy.

Guyana begins commercial oil production from the Liza well at a rate of 120,000 barrels per day. ExxonMobil is also eyeing the possibility of increasing its daily production soon after with the addition of another Floating, Production, Storage and Offloading (FPSO) vessel.

Article adapted from: http://demerarawaves.com/2018/02/07/ministry-of-the-presidency-distances-govt-from-petroleum-advisors-criticisms-of-exxonmobil-contract/

President Granger's Petroleum Advisor criticizes ExxonMobil's low royalty payment, control of large concession

Guyana’s two percent royalty on earnings from ExxonMobil’s oil sales is low compared to global standards, raising concerns about whether there was transparency about the negotiating system,  Dr. Jan Mangal, Petroleum Advisor to President David Granger said Wednesday.

“What we can do is look at what are the international norms. Royalty, when you look around, is more between ten and twenty percent, not two percent,” Dr. Mangal told a discussion  on the Government of Guyana’s Vision for the Oil and Gas Sector held at the University of Guyana’s Education Lecture Theatre.

He also noted that the tax is usually between 20 percent and 30 percent or more. Mangal remarked that the 50-50 percent profit share is “not bad”. However, the zero tax and two percent royalty that is in Guyana’s agreement has not gone down well with the advisor.

Asked whether the contract should be renegotiated, he said that was a question for Guyana to answer but he for the time being would withhold his view. “I am not at a stage yet where I am sharing that view publicly but it is under discussion,” he said. With “a lot of suspicion” still around about the oil sector, he said civil society and the wider Guyanese community need to develop greater trust of government and their representatives.

On the issue of whether the contract should not only be reviewed but also amended, the Petroleum expert said both contracting parties need to be comfortable. “if one party becomes really uncomfortable, it will change. Guyana is a sovereign country,” he said. At the same time he said policymakers would have to examine the trade-offs and be careful about scaring away investors. “Guyana has to be careful because that could be the perception, will be the perception but I don’t think it’s black and white. We have to be careful not to simplify too much and it’s not black and white and there could be a role for the grey area in the middle,” he said.

Mangal said he was pushing for experts from the Inter-American Development Bank and the International Monetary Fund and other agencies to conduct a “thorough a review of the contract” and for government to decide what it would do with the results.

While Minister of Natural Resources, Raphael Trotman continues to stress the benefits in the 2017 agreement with  ExxonMobil when one considers the political, enormous financial and security risks facing that company, Mangal said Guyanese would be happier if there was transparency about the negotiating system. “The way I would be happy and you would probably be happy as well is if a process was followed  and you knew who was involved and we knew their competencies and their expertise and they were respected did they go out there and bat for Guyana and they did they best they could but I think a lot of people in Guyana are questioning that,” he said.

Mangal noted that Guyana’s oil reserves discovered so far are of a very high quality and requires less processing. “I know it’s light oil which means it’s good oil and that’s a huge factor,” he said.

The Presidential Advisor, whose latest short-term contract ends in March 2018, said generally oil companies are “very powerful and experts in everything they do and they know how to influence governments to a ‘T'” but they could buckle under intense public pressure. “However, they can’t influence people. The only thing they are scared of is people so that’s why it’s important for Guyanese to have intelligent debate,” he said. At the same time, he cautioned against scaring away investors. After pushing for the ExxonMobil contract to be released, he welcomed the “brilliant analysis” that is leading to questions being asked.

Mangal promised to make his views known more frankly in the public in the coming months

The Presidential Advisor expressed grave concern about the fact that, based on the 1999 agreement and the new 2017 deal, ExxonMobil is controlling the entire Stabroek Block of about 600 blocks or 10 times more than what Guyana’s laws allow. “It is not good for one company owning too much of your acreage. Exxon already owns over fifty percent of the acreage in Guyana. That’s not good for Guyana,” he said.

Mangal argued that countries should benefit from diversity and competition in its acreage from companies from several parts of the world such as Europe and South America. “Oil is high-stakes, governments, companies they will do things at a high level,” he said. He recommended that Guyana examines how the acreage is allocated for the long term.

The Presidential Advisor warned against Guyana neglecting its agricultural sector, and instead recommended that a lot of the oil revenues be ploughed into that sector as well as developing physical infrastructure and the social sectors.

Article adapted from: http://demerarawaves.com/2018/02/07/president-grangers-petroleum-advisor-criticizes-exxonmobils-low-royalty-payment-control-of-large-concession/

Big oil can influence Govts, but not the people - Guyana's Petroleum advisor

Advisor to President David Granger on Petroleum, Dr. Jan Mangal has outlined the power of the people to make their voices heard about what is taking place in the oil and gas sector, especially as it relates to the 2016 Production Sharing Agreement (PSA) signed between the Government and ExxonMobil. Dr. Mangal made the declaration in response to questions from students of the University of Guyana following an in-depth presentation on the Government of Guyana's Vision for the Oil and Gas Sector. 

“What you will find is that oil companies… and this is not looking at Guyana, are very powerful, and experts in everything they do. They know how to influence Governments to a T. However, they can't influence people. The only thing they are scared of are people. That's why it is important for Guyanese to have an intelligent debate,” Dr. Mangal stated. 

Responding to several questions which highlighted a number of shortcomings in the PSA, Mangal stated that a lot of people in Guyana are questioning who negotiated on Guyana's behalf. The PSA was released in December, and since then there have been daily debates about the provisions of the contract, with growing concern that Guyana did not get a fair deal. “What I would say is, let's see how the public debate goes on over the next couple of months,” Mangal noted.

The Presidential advisor is on record, pointing out that zero taxes on oil and the two percent royalties in the PSA is not the international norm for oil agreements. “We can all sit down and talk about it. The way I would be more happy and you would be more happy as well, is if a process was followed and we knew who was involved, and we knew their competencies and their expertise… and they were respected… and that they went out there to bat for Guyana and they did the best they could,” Mangal pointed out. 

ExxonMobil is a multinational corporation with powerful reach which was run for a number of years by Rex Tillerson, the current United States Secretary of State. Mangal has pointed out that regardless of how powerful the company is, the people's view will weigh on the decision makers of the country. Dr. Mangal is a Guyanese who has spent 18 years in the industry, 13 of them with Chevron working on major oil and gas projects in the United States, West Africa and Asia. Amid growing calls for the contract to be renegotiated, Dr. Mangal noted that contracts should always be reviewed as new information becomes available. 

“Contracts are always changed. A contract is an agreement between two people. Both parties need to be comfortable. If one party becomes really uncomfortable it will be changed,” Dr. Mangal pointed out.  He stated that the question of renegotiating the contract is one that the people of Guyana must answer. According to Dr. Mangal, the focus last year was to get the ExxonMobil contract released to the public. He expressed his happiness that the information is out there and people are doing the analysis for themselves.

Article adapted from: http://www.petroleumworld.com/story18020905.htm

Petroleum Dept. & Food Institute for UG

The University of Guyana (UG) is in the process of establishing a Petroleum Department as well as a Food and Nutrition Institute.

Vice Chancellor of the University, Professor Ivelaw Griffith said the new facilities are timely since Guyana is becoming an oil producing nation but at the same time, needs to improve its capacity in the traditional economic sector of agriculture. 

Professor Griffith announced on the final day of the GIPEX Summit that a study is underway to develop a Department of Petroleum Engineering.

“We have a working group helping to figure out the varying contributing elements to that. What kind of faculty do we need, what will be the curriculum, what are the lab equipment we might need, what are the linkages with industry, who might we have on the advisory board for that department,” he explained.

According to the University’s Vice-Chancellor, as Guyana becomes an oil-producing nation, its students need access to training in all aspects of the industry.

In this regard, Professor Griffith said the University is conducting a gap analysis to determine other areas that need improvement.

“The analysis we’re doing is with a view of the whole university enterprise. What is it we need to do better to prepare in law, what is it needs to be better prepared to do in the social sciences, what is under occupational health, in the medical field, what is it we need to do in nursing. We’re taking a comprehensive approach to the energy venture and adventure,” he stated.

The Vice-Chancellor cautioned that oil and gas should not consume all of the peoples’ energy since Guyana is and will remain an agriculture-based society.

As such, he said efforts are underway to launch a Food and Nutrition Institute on World Food Day on October 16, 2018.

The Food and Agriculture Organisation (FAO) had donated US$30,000 to the University of Guyana to conduct a feasibility study for the establishment of the institute.

Meanwhile, Professor Griffith reiterated that the University of Guyana stands ready to play a leading role in the country’s development.

Article adapted from: https://newsroom.gy/2018/02/09/petroleum-dept-food-institute-for-ug/

Company to oversee Guyana's commercial petroleum interests to be created next year

- local scientific institute, logistics base also on the cards

Natural Resources Minister Raphael Trotman has disclosed three key objectives which the Government of Guyana will be pursuing in 2018 to consolidate its capacity to effectively service a modern oil and gas industry including a national oil company which will be charged with responsibility for overseeing the country’s commercial interest in the sector.

At the same time, Trotman said that during next year government will be seeking the support of the Government of Mexico in pursuit of the creation of “a scientific institute to support cutting edge regulation and development of the sector and an onshore logistics base that will serve both as a revenue earner as well as to support the development of other local industries.

Making these disclosures during a presentation to a November 24 Stakeholder Symposium at the University of Guyana titled “Identifying and meeting the demands for engineering and operations management skill required in Guyana’s emerging oil and gas industry,” Trotman also cautioned his audience on the importance of us disabusing ourselves of the notion that large capital investment in the oil industry translates into significant levels of direct employment. Guyanese, he said, must instead continue to bear in mind that the oil industry generates revenue levels “that can be made available to expand development and provide jobs in other sectors of the economy”, Trotman declared.

Addressing a gathering at the Turkeyen Campus that included both lecturers and students, Trotman said that the advent of an oil economy will have the effect of creating many more jobs outside of the sector. “……….as you shift, think also of enhancing skills that are transferrable to other sectors,” Trotman told his audience.

Contextually, the Natural Resources Minister cited fabrication which he said could be utilized in mining and shipbuilding, information technology and telecommunications which can be applicable across   a   wide   range   of   sectors   as   well   as “welders, chefs, mechanics, logistics, marketing and business administration.” In effect, Trotman said, the advent of an oil economy could see “highly trained   professionals as well as an inherent culture integrated into other pertinent sectors in the nation’s economy.”

In his presentation Trotman also sought to update the university community on the inventory of institutions that have already been created and those that are scheduled to be created in the period ahead to help manage the sector.

He disclosed that “at the level of Cabinet” government has created a sub-committee for the petroleum sector comprising the Ministers of State, Natural Resources, Finance, Infrastructure, Business and   the Presidential Advisor on Petroleum whilst at the ministerial level a  Petroleum Sector Ministerial Committee had been created comprising the Ministers of State, Natural  Resources, Finance, Infrastructure and Business. At the level of the Ministry of Natural Resources itself, the Minister disclosed that the Ministry had been consistently expanding its internal capacity by engaging “expert advisors and   establishing   a   Petroleum   Department” in addition to supporting “key governance initiatives” including the recently created Guyana Extractive Industries Transparency Initiative (G-EITI) that allowed for the country’s subsequent membership of the international institution, the Extractive Industries Transparency Initiative (EITI).

The EITI is a global standard to promote the open and accountable management of oil, gas and mineral resources. It seeks to address the key governance issues of the oil, gas and mining sectors.

Article adapted from: https://www.stabroeknews.com/2017/business/12/08/company-to-oversee-guyanas-commercial-petroleum-interests-to-be-created-next-year/

UG holds Stakeholders Oil and Gas Symposium

Today, the University of Guyana began consultations on identifying and meeting demands for engineering and operations management skills in the oil and gas industry.

The one-day symposium was held at the Marriott Hotel, Georgetown. Minister of Natural Resources, Raphael Trotman, in commending the university for its resourcefulness, noted that this stakeholder engagement advances the local content narrative.

“I see this initiative by the University of Guyana as another pillar that builds on the firm foundation we wish to create by helping us to continue our conversation of local content generally and the demands for engineering and operations management skills within the emerging sector specifically,” Minister Trotman said.

Industry representatives from ExxonMobil and Repsol along with academics from the University of the West Indies (UWI) and University of Trinidad and Tobago (UTT) gave their perspectives on the limitations and opportunities for human resources in the industry for UG’s consideration. The private sector, university faculties, and students were also part of the discussions.

The symposium seeks to provide initial orientation for training institutions towards the operation management of the oil and gas companies operating in Guyana.

However, Minister Trotman cautioned that focus must also be placed on the supporting sectors since there will not be large numbers of direct employment in the industry. “As you shift, think also of enhancing skills that are transferable to other sectors, example, fabrication which can be utilised in mining and shipbuilding, IT and telecommunications,” he said.

UG is also seeking to understand and align itself with government’s priorities, while also identifying and filling gaps in engineering skills for the industry.

This stakeholder engagement comes on the heels of a recent $100 million grant from the Ministry of Natural Resources to help the University build capacities in oil and gas.

Article adapted from: http://gina.gov.gy/ug-consults-industry-other-stakeholders-on-building-capacity-for-oil-industry/

Gov't creating environment for Guyana to 'flourish' off oil - Trotman

Minister of Natural Resources Raphael Trotman Friday outlined a series of initiatives the government is currently engaged in to create an enabling environment for the oil and gas industry to thrive and for the nation to “flourish.”

“This new sector will provide increased revenue for the country whilst offering significant opportunities for the development of our businesses and talents.

“To say that it will be transformative will be to understate its impact,” Trotman said at a symposium organised by the University of Guyana’s Faculty of Technology.

In 2018, he said work will continue towards key initiatives, including:

• The establishment of –  a national oil company with responsibility for Guyana’s commercial interest in the sector.
• A scientific institute to support cutting-edge regulation and development of the sector. This initiative is supported by the Government of Mexico, a country which has a world recognised scientific programme that supports the development of its oil industry.
• An offshore logistics base, which will serve to not only support the operations of the oil operators, and bring much-needed revenue to Guyana, but also support the development of other local industries

Trotman said that in developing the policies and systems to manage the oil and gas sector, the government is committed to ensuring that both the present and future generations will reap the benefits.

“In developing the policies and systems to manage the sector, Trotman said the government is committed to ensuring that both present and future generations will reap the benefits.

“The nexus between our current development efforts and repositioning our people, especially our youth, to be able to responsibly manage this sector and all of its ‘spin-off’ benefits is of great importance,” he stated.

Trotman said that the Sovereign Wealth Fund Bill is in draft form and under review. The process is being led by the Ministry of Finance and is key to the responsible and prudent management of revenues from the sector.

The Bill is intended to strengthen Guyana’s fiscal structures and provide for generational savings through a number of mechanisms, including budgetary support, infrastructural development, savings for future generations, social programmes, environmental protection, and Regional and Citizens benefit sharing.

The Local Content Policy is in the drafting and consultation stages.

“The Local Content policy is an expansion of our vision as it relates to Guyanese involvement in the sector through training, the promotion of knowledge, and the transfer of technology and experience through mentoring programmes, employment opportunities and business partnerships,” Trotman stated.

The present Petroleum (Exploration and Production) Act is being revised. This is the main piece of legislation which details the conduct of activities and their regulation within the sector. This Act will be supported by a series of detailed regulations, the first series of which will speak to the technical, health, safety and environmental requirements.

The Petroleum Commission of Guyana Bill is aimed at establishing an agency responsible for the regulation of the sector, ensuring that activities are carried out in conformity with policies, legislation and regulations.

Trotman noted: “This Bill, which currently is before a Special Select Committee, continues to go through a series of national consultations to ensure that we create an agency which is relevant, capable and equipped to carry out this critical function.”

Trotman said that while the industry does not employ many persons directly, it generates revenues that can be made available to expend development and provide jobs in other sectors of the economy.

“Therefore as you shift, think also of enhancing skills that are transferable to other sectors; eg. fabrication – could be utilized in mining and shipbuilding.

“IT and telecommunications, for example, could be applicable across a wide range of sectors as well as welders, chefs, mechanics, logistics, marketing and business administration,” Trotman stated.

Article adapted from: https://newsroom.gy/2017/11/24/govt-creating-environment-for-guyana-to-flourish-off-oil-trotman/

Oil needs "a whole new architecture" of public sector workers - Professor Michael E. Scott

Oil needs ‘a whole new architecture’ of public sector workers

Public sector reform is in a comatose state despite years of work and an investment of millions of US dollars, Professor Michael E. Scott, who also serves as the Deputy Vice-Chancellor of the University of Guyana, has said.

He indicated that this was troubling at a time when Guyana is about to experience radical transformation with the game-changing oil and gas sector.

Speaking of the oil and gas sector, he said it has the capacity to reconfigure the entire social system –  economically, institutionally, politically, legally and environmentally.

“I consider it rather troubling at this critical time that Guyana’s socio-economic landscape is pursuing radical and economic change, there is no attempt to re-consider, re-focus, re-configure and re-position an effective and efficient public sector to deliver services to meet the requirements of the oncoming reality,” Scott said Wednesday.

He was at the time delivering the first 2017 Professorial Lecture of the University. Professor Scott deals with Academic Engagement at the University.

He said there has been an investment of over US$300 million over the years – funded by the World Bank, the Inter-American Development Bank, the British government and others – towards public sector reform – but he said that process seems to have been stagnated.

“Despite years of reforms and initiatives, it is clear public sector reform is comatose. This presents significant challenges,” he stated.

He said the state of reform begs the question of the readiness to facilitate this game-changing sector and all its implications.

According to Professor Scott, the public sector serves the interest of Guyanese and is responsible for managing the conditions for investment. In fact, he said in the public sector’s bosom is the policy decisions, the laws, the concessions, and the rules pertaining to the initiation of the oil and gas sector.

Scott said that at this critical and historic juncture, the public sector needs to give assurance in a meaningful way of its readiness to facilitate and manage the new and significant game-changing sector.

“A whole new architecture of personnel is needed,” he declared.

He added: “The public sector must be ready to set, pursue and adjust goals, re-configure its services and upgrade its service delivery to meet the new reality in the economic sector.”

Professor Scott summarised the public sector to mean state and government activities of not only government ministries and departments, but also semi-autonomous government agencies, statutory government oversight bodies, State trading and investment bodies, State enterprises and in the Disciplined Forces.

Over the years, he said no change has been obvious in the public sector other than those that are structural. And so, he questioned how appropriate the Guyanese public sector and its business practices is to usher in and facilitate the veritable game-changing sector that oil and gas is.

He reasoned that the offshore business of oil and gas will resonate onshore and so public sector rules, regulations, laws, and policies “must be ready.”

“The public sector architecture must be capable and efficient to service the game changer in what is increasingly a glocalised policy environment, where the local and global can hardly be differentiated.”

He pointed to the fact that the sector would be completely new to Guyana as oil and gas is an extractive sector of a different type.

“It is at an offshore location and for Guyanese, it is called Black gold. It is drilled and pumped, it is not mined, as we are accustomed to with our pork-knockers and miners.

“There are large players capable of accelerating economic upturn, capable of generating s we know the Dutch disease, capable of spawning a black  gold parallel economy, as we’ve seen in other parts of the world, capable of undermining public processes and structures, if the public sector and its service business are not strengthened,” he stated.

The University of Guyana’s Professorial Lectures provide newly appointed professors with the opportunity to inform colleagues, the campus community and the general public of their work to date, including current research and future plans. The inaugural Professorial Lecture was held in 2015.

Article adapted from: https://newsroom.gy/2017/10/27/oil-needs-a-whole-new-architecture-of-public-sector-workers/