Guyana should be part of global oil supply chain –Jagdeo
By Guyana Times
Petroleumworld 10 19 202
While there have been calls from certain quarters for Guyana to slow down and even halt oil production until various conditionalities are satisfied, Vice President Bharrat Jagdeo has made it clear that Guyana will do no such thing.
During an interview on Asaase Radio in Ghana, where he flew for a three-day visit over the weekend, Jagdeo spoke about the International Energy Agency (IEA) and the Intergovernmental Panel on Climate Change (IPCC).
“Our argument is that if we follow through with the logic of what the IEA said and the IPC, that you should not spend any money on the exploration and development of fossil fuel. Effectively they are calling for a monopoly for the existing producers, a $4 trillion industry,” Jagdeo said.
“So Saudi Arabia, the United States, Russia, Norway, Venezuela, can continue to meet the global demand and there will be a demand for fossil fuel in the near future because the demand is growing because the world is not decarbonising the key sources of emissions as rapidly as they need to.”
Jagdeo explained that there are three key sources of carbon emissions, including burning fossil fuel for energy, for transport and deforestation and land use. He noted that enough is not being done to reduce these instances. This is something that is likely to be addressed at the COP26 conference in Glasgow, Scotland, next month.
“Not enough is being done to get renewable energy to meet current demand, not enough on transportation and deforestation. The world will continue to need fossil fuel and the only people who can benefit from this are the existing producers. What about us, whose GDP and our people have a legitimate expectation.”
“Who will pay us for the opportunity cost of giving this up? Will they be willing to do that? So that has to be the core of our argument, without disputing the science or arguing against global carbon prices… once there is a market, we should be part of the supply chain,” the Vice President explained.
Guyana, with US oil giant ExxonMobil as the operator, began producing oil on December 20, 2019, in the Stabroek Block. Guyana’s oil revenues are being banked in the New York Federal Reserve Bank, where it is earning interest.
ExxonMobil has said it anticipates at least six projects offshore Guyana will be online by 2027, with developmental drilling recently starting on the second one, the Liza Phase 2 project. Back in May 2019, EEPGL was granted approval by the Environmental Protection Agency (EPA) to go ahead with its Liza Phase 2 Development offshore Guyana.
The oil company had said that the project will have the capacity to produce 220,000 barrels of oil per day. Exxon had also revealed that the Liza Phase 2 development was funded at the cost of some US$6 billion, including a lease capitalisation cost of approximately $1.6 billion, for the Liza Unity FPSO vessel. For the Phase 2 Development, six drill centres were planned, along with approximately 30 wells – 15 productions, nine water injection and six gas injection wells.
The US$9 billion Payara development, the third development, will meanwhile target an estimated resource base of about 600 million oil-equivalent barrels and was at one point considered to be the largest single planned investment in the history of Guyana.
The Yellowtail development, which will be oil giant ExxonMobil’s fourth development in Guyana’s waters, will turn out to be the single largest development so far in terms of barrels per day (bpd) of oil, with a mammoth 250,000 bpd targeted.