With Exxon in the midst of their highly anticipated appraisal drilling campaign offshore Guyana, the government has been taking its time to increase its understanding of the oil and gas industry and where it needs to be heading, according to Raphael Trotman, the Minister of Natural Resources.
Minister Trotman told EnergyNow that the population of Guyana was beginning to get more excited about the potential of the oil industry to positively change the country; confidence in the eventual development of the industry has been steadily growing over the past year. The government has been trying to understand the industry, but they realise that it is both very large and very dynamic, so they cannot always precisely define everything that they need to achieve. The minster explained that there have been many learning opportunities and that the government has identified several issues that it still needs to find ways of addressing.
Some of the issues that the ministry needs to prioritise in order to get ready for the oil industry include the reform and strengthening of the environmental agency, which it plans on achieving by mid-2016, and the design and implementation of a sovereign wealth fund that it hopes to have in place by the end of the year. Minister Trotman also explained that the government was conducting a thorough review of petroleum legislation and was working on the establishment of a separate regulatory agency for the industry, instead of just having petroleum regulated by a division of the Guyana Geology and Mines Commission. A local content policy for the oil industry is also on the government’s agenda.
With the current low commodity prices, Guyana has understandably not seen many new operators knocking on its doors, despite the excitement created by the Liza well. Minister Trotman told EnergyNow that the government was not actively going out to look for new operators for exploration acreage, though it was open to offers if approached. He emphasised, however, that Guyana was looking for world-renowned operator companies with excellent track records and the financial and technical capability to develop hydrocarbon resources.
In addition to Exxon, who have their Liza appraisal well underway and possible future exploration wells planned, there are other operators who continue to actively pursue exploration prospects. Repsol continues to work on its offshore block to reduce exploration risk and plan to run additional seismic. Minister Trotman reports that Anadarko continues to express a strong interest in Guyana's acreage, despite the problems that it had previously encountered with the Venezuelan Navy during the company's 2013 campaign.
Minister Trotman also told EnergyNow that Tullow reportedly believes that its significant success in recent years with onshore exploration in Uganda and Kenya has given the company the necessary insight to find a commercial discovery in the Takutu basin.
Minister Trotman told EnergyNow that the government of Guyana remains committed to the idea of partnering with Trinidad and Tobago in the development of its hydrocarbon resources. Noting that he regards Trinidad and Tobago as an older, more experienced sibling in the oil industry, the minister explained that Guyana is looking to Trinidad and Tobago for guidance. With the certainty that there will be many service companies from around the world flocking to Guyana if and when an investment decision is taken to develop an oil project, Minister Trotman believes that service companies from Trinidad and Tobago – and other CARICOM countries – should be at the forefront. To help foster deeper ties and cooperation at government, civil society and private sector levels, the Ministry of Natural Resources, along with the Energy Chamber of Trinidad and Tobago and other partner organisations, is exploring the possibility of organising an oil and gas-focused expo and conference in Guyana later this year.