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Opportunities for Aberdeen firms as Guyana nears first oil

Eco Atlantic has expanded into solar PV through a new joint venture, with rates of return better than oil and gas opportunities.
Guyana

The need for an extensive oilfield services industry in Guyana is pressing as the country moves towards first oil production in 2020.

ExxonMobil and its partners have made 13 discoveries totalling around 5.5 billion boe off the coast of the country since 2015.

In addition, a consortium led by UK-listed Tullow became the latest group to find crude when it announced the discovery of over 100 million barrels in the Jethro well in August.

The ramp up in activity will see the country go from producing zero oil this year to an estimated 750,000 boepd in 2025.

This will have a major ripple effect on the domestic economy, as an onshore services industry emerges to support the work offshore.

The oilfield services industry will see rapid expansion in the near-term from E&P capex, and sustained cash flow over the long-term from E&P opex, said Peter Hambro.

His company, Peter Hambro Limited, is involved in gold mining in the Caribbean country and is now looking to establish the Guyana Onshore Fund to invest in the impending economic boom.

The fund already has soft commitments totaling US$100 million.

Hambro said Guyana’s high local content requirement means there is a need for in-country capacity to increase significantly to accommodate the impending spike in demand.

Guyana currently only has a single oil and gas services company, TOTALTEC, which is in the process of raising US$40 million to support its own expansion plans.

With only one active services company, there is significant space for others to emerge, and Hambro believes Guyana can learn lessons from Aberdeen’s experience as a support hub for the North Sea.

“The finds by ExxonMobil and others propel Guyana into the forefront of the hydrocarbon world and it will take some time for the existing business structures to adapt,” he said.

“Happily the connection with the UK provides a route whereby the expertise – whether hands-on and practical, like the Aberdonian North Sea operators or internationally financially adept like the City of London and the Global Scot community – can be brought into play.

“The common legal background will definitely help here.”

Hambro is in Aberdeen this week for Offshore Europe and is a keynote speaker at the Aberdeen Guyana Gateway event on September 4, where he will highlight the opportunities available to investors.

“I very much hope that we can build on our initial soft commitments of US$100 million to enable local entrepreneurs to provide the services that even now are becoming much in demand,” he said.

Granite PR is hosting the Aberdeen-Guyana Gateway networking evening at the Macdonald Norwood Hall Hotel on Wednesday, September 4, from 6:00 – 8.00pm.

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