Guyana signs pact for offshore oil exploration
by Terrence Esseboom
GUYANA yesterday clinched another petroleum exploration deal with a foreign firm, paving the way this time for the first hunt in the country's offshore deepwater area for energy reserves. President Janet Jagan, Mr Wendel Hoppe, North America/Caribbean Manager, Americas Business Unit - Ventures, and Mr John Willott, President of Esso Exploration and Production Guyana Limited (EEPGL), yesterday formalised the compact in the Cabinet Room of the Office of the President (OP), New Garden Street, in the City. The EEPGL is a subsidiary of Exxon Corporation, a United States firm based in The Bahamas. "...Exxon's worldwide deepwater experience and leading edge technology will help to inaugurate a new era in the history of the Guyanese petroleum industry...," Willott observed. "This is an historic moment (for Guyana) and I am very hopeful that the exploration will produce results," Mrs Jagan said at the signing. According to the President, the oil exploration deal "means a lot" for the country. The agreement, the first for the year, is "pursuant to the Petroleum Prospecting Licence (and) shall remain in force for as long as the Petroleum Licence is in force," a Guyana Geology and Mines Commission (GG&MC) press statement explained. It said that the exploration pact is initially valid for four years and can be renewed if Esso agrees. The understanding is that the area licence covers approximately 60,000 square kilometers commencing from about 120 kilometers from the coastline "situated in a swath parallel to the coast line in offshore waters the range between 200 to 240 kilometers," the GG&MC statement said. The release noted that pioneering work by the oil exploration firm would determine whether there are favourable prospects for commercial reserves of natural petroleum and/or gas. The prospects of the Production Sharing Contract (PSC) ratified yesterday between the two sides, prompted Willott to note that "this large Guyana block adds to Exxon's already substantial portfolio of deepwater opportunities in some of the most prospective frontier areas in the world". He said the deal is part of a larger success story in its global deepwater exploits. Exxon is involved in business ventures in more than 100 countries globally, and is currently undertaking exploration activities in 26 of them. The technology to plumb the depth of 2,000 to 3,000 meters of water for oil and gas exploration was recently developed, and according to Willott, "Exxon is among a handful of international companies with the expertise to operate efficiently in this deepwater depth environment." Exxon has similar ventures in East Africa and Trinidad and Tobago. Chairman of the GG&MC Board of Directors, Mr Robeson Benn in welcoming the pact, said the deal can help Guyana as an "energy-poor" country. It is another link in the development of the synergies required to help the industrialisation ambitions of Guyana, Benn observed. The GG&MC statement said "Guyana welcomes investments of this kind because of enormous benefits that would come on stream in the event of a developed commercial discovery." It went on: "In such a case, Guyana will be entitled to 50 per cent of any profits generated from production of petroleum. This is in addition to rentals, fees and charges that total approximately US$150,000 annually at the minimum, with formulated effective increases as the exploration phase matures and if the production phase comes into account." Under the arrangement, local and overseas training packages would be available for some categories of GG&MC technical staff, Deputy Commissioner Mr William Woolford told the Chronicle after yesterday's formality. Exxon is among several foreign companies involved in oil exploration in the country, and according to Woolford, "we expect that one of those companies would begin drilling" before the end of the year. "We are not going to lose hope," Woolford said about the quest for discovering natural petroleum or gas in commercial quantities here. 
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