FPSOs Role In Raising Guyana’s Position In The Market: What Does This Mean For Production and Revenues?

By Cristina Caus

News Americas, FORT LAUDERDALE, FL, Weds. May 17, 2023: On April 11, 2023, the Floating Production, Storage And Offloading vessel (FPSO), Prosperity, arrived in Guyana and joined the other two FPSOs, Liza Destiny and Liza Unity. This became the third FPSO vessel that has been built and started operations in Guyana’s waters in 2019.

A total of 56 FPSO projects, between 2022 and 2027, are expected to commence their operations worldwide. Brazil leads the list with 22 of them, followed by none other than Guyana, with 3 delivered additions and one in progress. As a new player in the global oil and gas arena, the news about welcoming its third FPSO in 4 years is worth the fanfare for this small Caribbean nation.

 According to ExxonMobil, the major operator in Guyana and SBM Offshore, the Dutch group of companies awarded to construct, install and deploy the FPSOs; to date, each project had a cost of approximately US$1 billion (Liza Destiny), US$1.2 billion (Liza Unity), US$1.6 billion (Prosperity) and with the fourth US$1.75 billion contract (One Guyana) on the way. Exxon’s fifth proposed development at the Uaru oilfield, called Errea Wittu will cost approximately 27% more than the One Guyana. ExxonMobil and its partners will provide this upfront investment at their own risk and can recoup a percentage of these costs from annual production once it begins.

Some question the rationale behind these rapid developments in oil and gas when the world is moving towards cleaner energy projects. Due to the increasing oil and gas prices in parallel with rising global energy demand, the FPSO market is stimulated to grow by 12.3% between 2022 to 2028, and it looks like it might represent the future of oil and gas. The growth is triggered by the declining rate of new onshore oil discoveries and the rising investments in offshore drilling, with the FPSOs being the most cost-efficient, quicker, mobile, and environmentally- friendly solution compared to the traditional rigs (like fixed platforms).

So, what does all this mean in terms of production for Guyana?

Between 2020 and 2021, Guyana produced around 102,000 barrels per day (bpd) of crude with its first FPSO, the Liza Destiny, and tripled it to 380,000 bpd with its second FPSO, the Liza Unity. Guyana is expecting to reach 600,000 bpd by 2024 with the Prosperity FPSO. This puts Guyana in the top 30 oil producers ranking globally. Exxon is targeting to have six FPSOs in Guyana by the end of 2027 and sees a potential for up to 10 of them to develop its current recoverable resource balance, bringing production capacity to more than 1.2 million bpd. By 2035, the country will be pumping about 1.7 million bpd, based on Rystad Energy research, and might become the 4th largest offshore producer in the world. This would be an unprecedented scenario, bringing Guyana into the same ring with oil giants such as Saudi Arabia, Brazil, the United States, Norway and Mexico.

What would this translate to in terms of revenue for the Guyanese economy?

According to the Central Bank, Guyana closed out 2022 with US$1.27 billion in revenue from oil sales and royalties, which represents almost equivalent to half of the country’s 2022 budget. For the first quarter of 2023, Guyana received US$219 million from oil sales, expected to inject US$ 1.6 billion, almost 30% of the proposed national budget (US$3.75 billion) for the fiscal year 2023, Guyana’s largest ever. Therefore, the linkage between the FPSOs in Guyana and the economic growth becomes very strong. These investments are skyrocketing the nation’s GDP from US$5.174 billion in 2019 to US$8.92 billion in 2022 and are expected to hit US$11.6 billion by 2025 and have the potential to impact other sectors of the economy. It’s like Monopoly board game, more assets you acquire, the faster you establish wealth and the greater are the chances of winning.

 As of today, the government has allocated almost US$400 million for health sector advancement for 2023. One of the major projects is the new healthcare center with at least 300 jobs that will be established in Guyana this year, a partnership signed between The Guyana Office for Investment and India’s Decipher Health Records Inc. Several hinterland communities will experience a  significant boost in healthcare delivery through an investment of about US$97 million with hospitals upgrades, procurement of ambulances and healthcare professionals training. Also, some of the hinterland regions will benefit from approximately US$50 million worth of investments in infrastructure – including  projects like construction of roads, rehabilitation of airstrips, completion of water wells, provision of residential solar systems, and upgrade of electricity distribution networks. Education has a budget allocated of around US$445 million this year to enhance the quality of education in several areas such as Hosororo, Patentia, Orealla, Prospect, Good Hope, Yarrowkabra, North Ruimveldt and Diamond. It includes upgrading education infrastructure around the country, continuing to roll out the National School Feeding Program and introducing the involvement of communities to provide Home-Grown food products for the schools. The Ministry of Education plans to implement the Education Management Information System Software and create smart classrooms for secondary education.

The benefits can be numerous and incredible for the Guyanese economy if the investments such as those described above are continuously and consistently made to improve certain areas of life and healthcare, education and infrastructure are prioritized. With the fastest-growing GDP in the world, Guyana is given the power to reverse decades of economic stagnation and its people are given the opportunity to access increasing resources by producing more goods and services, achieving higher wages and profits and raising their living standards.

As a result, these massive and expensive FPSO investments are a testament to the long-term commitment and partnership between the oil and gas industry and the Guyanese nation, directing the country into a new era of oil and gas exploration and production and economic prosperity.

EDITOR’S NOTE: Cristina Caus is an international oil and gas business developer and consultant and holds a master’s degree in international business from Florida International University.


Victor Wembanyama, Son Of An African Immigrant Father, Is Headed To The Spurs

By NAN Sports Writer

News Americas, SAN ANTONIO, TX, Weds. May 17, 2023: In an exhilarating NBA Draft Lottery, the San Antonio Spurs emerged victorious, securing the right to draft the highly talented French player, Victor Wembanyama, 19 who stands at an incredible 7′ 2″. This exciting news not only signifies a potential game-changer for the Spurs but also sheds light on Wembanyama’s captivating background, with his father, Felix, a former track and field athlete who competed in the high jump, long jump and triple jump hailing from the Democratic Republic of Congo in Africa.

Felix Wembanyama established personal records in the triple jump (15.56 meters) and long jump (7.41 meters), as well as running the 100 meters in 11 seconds. He migrated to France to complete his university education and later met and married the French born Elodie de Fautereau.

The couple have three kids, including Victor. de Fautereau is a basketball coach at Gymnase La Varenne in Noisy-le-Grand, who taught her son the game.

Victor Wembanyama #1 of Boulogne-Levallois Metropolitans 92 shoots a free throw during the first half of a preseason game against G League Ignite at The Dollar Loan Center on October 4, 2022 in Henderson, Nevada (Photo by Chris Unger for The Washington Post via Getty Images)

The Spurs’ triumph in the NBA Draft Lottery sets the stage for a promising future as they prepare to welcome the extraordinary skills of this son of an African immigrant to their roster. Standing at an impressive 7 feet and possessing a remarkable skill set, Wembanyama has garnered attention as one of the most promising basketball talents in recent years.

Amidst this thrilling victory, it is essential to recognize the unique journey that has led Wembanyama to this moment. Born to a Congolese father, his heritage adds a layer of richness to his story and serves as a testament to the global impact of basketball. It is a reminder of the importance of immigrants and that talent and potential can emerge from diverse backgrounds and inspire fans worldwide.

The San Antonio Spurs organization is renowned for its ability to identify and nurture talent, and the opportunity to draft Wembanyama aligns perfectly with their commitment to excellence. As they prepare to welcome this rising star, the Spurs are poised to make a significant impact in the league and continue their legacy of success.

Wembanyama’s journey from France to the NBA spotlight is a testament to the power of dreams, dedication, and hard work. His remarkable skills and unique background make him an exciting prospect, not only for the San Antonio Spurs but for the entire basketball community.

As the NBA Draft approaches, all eyes will be on the San Antonio Spurs and the potential they hold in shaping the career of Victor Wembanyama. The anticipation is palpable, and fans eagerly await the next chapter in this incredible story.

Limited Access To US Capital Leaves China And Saudi Arabia Filling The Void In The Caribbean

By Felicia J. Persaud

News Americas, FORT LAUDERDALE, FL, Weds. May 17, 2023: In the grand chessboard of global geopolitics, the Caribbean and Latin America are experiencing a tectonic shift, akin to a thrilling thriller with unexpected plot twists and high-stakes outcomes. Over the past four months, the narrative has been dominated by the rising dragon of the East – China, making strategic moves that are reshaping the region’s economic landscape.

China’s influence is not just a passing wave, but a well-calculated part of its ambitious global expansion strategy, embodied in initiatives like the Belt and Road Initiative. Over the last 20 years, China has become the second largest trading partner of Latin America & the Caribbean (LAC). Between 2000 and 2020, China-LAC trade grew 26-fold from USD 12 billion to USD 310 billion. China is also among the top sources of foreign direct investment and finance for the LAC region.

China has invested over $10 billion in mainly six Caribbean countries between 2005 and 2022 focused on the tourism, transportation, extractive metals, agriculture, and energy sectors.

•Jamaica: $3.16 billion

•Guyana: $3.01 billion

•Trinidad and Tobago: $2.28 billion

•Antigua and Barbuda: $1 billion

•Cuba: $740 million

•Bahamas: $350 million

From 2005-2020, Chinese investment in energy and infrastructure throughout the Caribbean reached upwards of $7 billion.

•China’s SOE China National Offshore Oil Corporation (CNOOC) has a 25% stake in the Stabroek block25, an offshore crude oil deposit projected to produce upwards of 4 million barrels per day by 2025. ExxonMobil holds a 45% interest alongside Hess Guyana’s 30 percent stake.

•In 2011, China’s sovereign wealth fund acquired a 10% interest in Trinidad and Tobago-based Atlantic LNG, one of the world’s largest natural gas producers.

•In 2019, a subsidiary of Chinese national oil company CNPC (CNPC is the primary and stands for China National Petroleum Company) Great Wall Drilling, began drilling oil off Cuba’s coast as part of a joint venture with state-owned oil firm Cuba Petroleum Company (CUPET).

•In 2017, Jamaica’s Alpart alumina refinery was purchased by Chinese state-owned enterprise, Jiuquan Iron and Steel Company (JISCo) for $299 million.

•China National Corporation for Exploration and Development of Oil and Gas (CNODC) currently has a 30% stake in the consortium developing the Stabroek Block. The Stabroek Block is 6.6 million acres and holds an estimated recoverable resource of more than ten billion oil-equivalent barrels.

Yet, in this unfolding drama, China is not the only player. Saudi Arabia has also been extending its reach, with the Saudi Fund for Development making noticeable inroads. Saudi Arabia, through the King Salman Humanitarian Aid and Relief Center (KSrelief), has provided more than $1.3 billion in aid to the Caribbean countries, the Saudi foreign minister has said.

Prince Faisal bin Farhan made the remarks during the 28th Ordinary Meeting of the ACS Ministerial Council in Guatemala recently.

He said the Saudi Fund for Development acts as an integral part of the Kingdom’s expanding global partnerships and is currently working on projects worth $240 million within the Caribbean.

While these foreign powers bring economic opportunities, critics express concern about potential erosion of sovereignty, risk of crippling debt burdens, and possible environmental and societal effects. Amid these opposing currents, the billion-dollar question remains: Why has the US allowed such significant foreign influence in what is historically its sphere of influence?

Seemingly hamstrung by perceived risks and corruption, American investors have neglected their own backyard, viewing it as a high-risk “wild west.” This has allowed countries like China and Saudi Arabia to seize the moment, filling the investment vacuum with strategic moves.

As the CEO of Invest Caribbean, it feels like we’re on a battlefield, fighting an uphill battle to finance quality projects in a region that, ironically, is rich in opportunities. The reluctance of the US to finance its neighboring regions has left a void that China and Saudi Arabia are all too willing to fill.

But the story is far from over.

The Caribbean and Latin America are standing at a pivotal crossroads. What they need desperately now is a fund that can nurture small to medium private sector enterprises while offering both debt and equity to fund larger, quality projects that stimulate job creation and regional growth. Invest Caribbean, a Caribbean-American owned and US registered entity, is ready for the challenge.

The final chapter of this story remains unwritten, but the stage is set for a dramatic climax. Will the US realize the potential of its own backyard, or will it continue to stand by as other global powers rewrite the narrative? The choice is clear: It’s time for the US to step up and join the game, or risk being left behind in the thrilling saga of global geopolitics.

EDITOR’S NOTE: The writer is CEO of ICN which owns the brands, Invest Caribbean, CaribPR Wire, Hard Beat Communications and News Americas – the Black Immigrant Daily.