US$150M to service O&G sector next year

OPERATIONS in Guyana’s nascent oil and gas sector have been moving apace and growing rapidly, and, with this alacrity anticipated to continue over the next few years, the Guyana Shore Base Inc. (GYSBI), as a means of increasing its capacity and maintaining its strategic position in this sector, will be investing a further US$150 million (over G$31 billion) next year.

Guyana Shore Base Inc., which is a Guyanese joint venture made up of Muneshwers Ltd., Pacific Rim Constructors, TotalTec Oilfield Services and LED Offshore, has been servicing the oil and gas sector for about four years, and building its reputation as one of the go-to shore base facilities in Guyana.

At present, GYSBI occupies 130 acres of land around the Houston, East Bank Demerara area and is strategically located north of the Demerara Harbour Bridge, enabling the most efficient logistic solutions. This company already offers services such as waste management, chemical storage, warehousing, construction, berthing of supply vessels, cargo marshaling area, loading and offloading, supply chain management, expatriate management, and customs services.

But, with ExxonMobil- the key stakeholder in Guyana’s oil and gas sector- set to expand its operations in the near future, GYSBI has taken steps to ensure that it stays in line with the oil company’s strategic direction. Since 2015, ExxonMobil, operator of the Stabroek, Canje and Kaieteur Blocks offshore Guyana, has increased its estimated recoverable resource base to more than nine billion oil-equivalent barrels. And, following an agreement with the Government of Guyana, the company recently decided to proceed with the Payara field development offshore Guyana.

Payara is the company’s third project in the Stabroek Block and is expected to produce up to 220,000 barrels of oil per day after start-up in 2024, using the prosperity Floating Production, Storage and Offloading (FPSO) vessel. The $9 billion development will target an estimated resource base of about 600 million oil-equivalent barrels. Ten drill centres are planned, along with up to 41 wells, including 20 production and 21 injection wells.
Considering this and other major advancements in this sector, General Manager of GYSBI, Sean Hill, has said that the company will be investing approximately US$150 million to increase its infrastructural and human resources capacity, among other things.

“We will be investing in new training and development programmes, and new preventative maintenance and certification and calibration programmes as well. All in all, 2021 is going to see some significant growth of the Guyana Shore Base Inc.,” Hill said during an exclusive interview with the Sunday Chronicle, on Thursday last.
Speaking about some of the company’s specific plans, the general manager said GYSBI is working with Noble Corporation to develop a new site offshore, to service the oil rigs. At this time, Noble has four oil rigs offshore, so the plan is to build a large, new supercenter to help service those facilities. Additionally, GYSBI will also be working on providing additional services needed for the sustainability of the FPSO vessels.

“We are working with Exxon [ExxonMobil] to improve our warehouse out there [offshore]…we have a warehouse on the shore base for the spares for about three FPSOs, but we are working on upgrading this,” Hill said.
Further, work will include the construction of adequate infrastructure to facilitate three and a half million litres of fuel bunkering. This, as said by Hill, will come on stream in the early part of next year. Other infrastructural work includes the establishment of a World Health Organisation (WHO) certified water treatment plant and the construction of two berths.

“We have two berths, but we will be adding two more and these will be coming on line in the third quarter [next year]…this would be a change for the industry because, at the moment, we are limited to around 40 to 50-tonne lifts. So we are going to be building a new berth and crane that would be able to get us to about 130 tonnes,” Hill said, adding that this would be a “shift change” for the industry, allowing stakeholders to handle heavier loads.
A new facility will also be built for waste management. With the completion of this facility, all of the waste from offshore would be coming onshore to be categorised and then either be incinerated, recycled or treated another way.

REDUCING ENVIRONMENTAL IMPACT
The company will also be acquiring a new thermal desorption unit to mitigate the environmental impact of the oil and gas sector.

In explaining the functions of the new unit, Hill said: “…As you are drilling your hole, the rock has to come out and go somewhere, so all of that will be coming to shore…we are putting it through this unit which will allow us to burn cuttings so that the rock will be reusable. We will recover the water which we can treat, and the oil, so this is another positive step towards zero impact on the environment.”

State-of-the-art infrastructure and equipment are nothing without human resources, so, GYSBI, as part of its strategic plan and vision, will also be hiring close to 250 more persons to complement the anticipated advancements. The company, over the years, has moved from employing 30 persons to a current staff complement of 350 persons, the majority of whom are Guyanese.

LOCAL CONTENT
Speaking specifically about local content, Hill said 95 per cent of the company’s employees are Guyanese and about 75 per cent of its spending is done in Guyana.

“We are investing in new training and development tools to ensure that, at each level of the organisation there is competent personnel…we have a competency programme included there too,” Hill said.
For the competency programme, the company is looking to make sure that there is not just on-the-job training, but also classroom training and evaluations of personnel and their aptitude and attitude towards achieving the job. In this way, the company believes that it will have the right people in the right positions throughout the organisation, especially amidst the local advancements in the oil and gas sector.

Added to this, the industry is also dangerous, so the company’s ultimate goal is to ensure that everyone gets home safely. And, this requires everyone paying attention and being deemed competent in each of their roles.
“So all of this [company’s operations] take a lot of engineering, time and money…it takes a lot of suppliers to supply us with the right items to invest at the right time, which is why we are developing this in stages and in sync with Exxon [ExxonMobil],” Hill reasoned.

While the company, in its initial stage, made a capital investment of approximately US$100 million, it has spent “significantly more” than that on repairing and servicing equipment, operational expenditure and the growth of employees.

“The salaries and taxes and the training and development of those people for a significant part of the investment…the human capital part is what gives a company its potential growth and longevity. This industry will be here for decades, so making sure we get the right people here and that we train them appropriately for the future is a true investment in a company and that is a true investment that you are putting into Guyana,” Hill explained.
Such investments are easily made in an encouraging environment, something which the company enjoyed for its first three years of operation in Guyana before there was political instability. This has since been corrected with the holding of General and Regional Elections.

“Obviously 2020 was a challenge because we had the combination of COVID and the change in administration and then the oil prices as well,” Hill said.

Looking forward, he said: “Where we are now, we are seeing a business-friendly environment as we move forward… we have seen a lot of progress on applications that we have had since the start of this year. Understandably with the change in administration there was a hold on approving a lot of those applications, but they are progressing now, so at the moment we are really happy with the way things are progressing.
“I do not see any reason why we cannot continue to progress with all of our development plans because of the current business environment here in Guyana. We are looking forward to a pretty bright future here.”