How Atlantic Canada is helping a small South American country join the oil and gas big leagues

How Atlantic Canada is helping a small South American country join the oil and gas big leagues

Guyana is one of the world’s oil and gas exploration hot spots, and Newfoundland and Labrador is hoping to provide help and profit from the activity

It was 2012 and David Devine—then Canada’s High Commissioner to Guyana—knew an oil boom was brewing in this small, impoverished South American country.

As Canada’s senior diplomat in Guyana, it was one of Devine’s jobs to assist in the country’s development but also to help Canadian businesses work and export in this country. As Guyana’s government and business leaders began to grapple with how to deal with, and benefit from, the oil and gas activity that was poised to happen, it struck Devine that Newfoundland and Labrador had a lot to offer the nation.

“There were so many similarities between where Guyana was in 2011-2013 with development and where Newfoundland and Labrador was in the 1970s and early 1980s, it was palpable,” Devine says. “There was enough interest there that it seemed worthwhile to be able to invest a certain amount of time on this. Canada, and particularly Newfoundland and Labrador, has a lot of expertise in this area.”

Fast forward to 2018 and Guyana is one of the world’s oil and gas hotspots. In 2015 ExxonMobil discovered the Liza oilfield, believed to hold between 800 million–1.4 billion barrels of oil equivalent. That was followed in 2016 by the Payara discovery and in March 2017 by the Snoek discovery. ExxonMobil says the three fields could hold two billion barrels or more of oil.

More discoveries have followed, and ExxonMobil says it plans to produce oil from Liza by 2020. The prospect of oil revenue flowing into the country’s treasury is a tremendous opportunity for Guyana. It has just 773,000 people and one third of the population live below the poverty line. With a GDP of $3 billion, it’s the third poorest country in South America.

But as big of an opportunity as the oil and gas industry presents, it’s one Guyana is currently ill-equipped to take full advantage of. It lacks basic infrastructure, only 10 per cent of its roads are paved, and much of its population does not have the education and skills needed to be employed in some of the high-paying jobs the industry would bring. “The country is not prepared for this and is somewhat similar to where (Newfoundland and Labrador) found itself 40 years ago,” says Rob Strong, a St. John’s-based oil and gas consultant who Devine—who is from St. John’s himself—turned to when he was looking to link Guyanese business and government leaders with Newfoundland residents and organizations that have oil and gas know-how.

During his stint as High Commissioner of Guyana from 2011-2013, Devine saw a number of Newfoundland and Labrador organizations and individuals exchange advice and expertise with Guyanese businesspeople and leaders. The College of the North Atlantic and the Marine Institute of Memorial University were some of the first groups to visit the country in 2012 looking to share the knowledge and expertise they had accrued in the oil and gas sector.

Relationships have continued to build between the two jurisdictions over time, with Newfoundland and Labrador sharing its knowledge and insight in regulatory processes, infrastructure requirements, training needs and other oil and gas matters. In June of 2017, a team from the Guyana Oil and Gas Association met with 15 Canadian companies looking to partner with Guyana’s private sector and chase opportunities in its oil and gas sector.

In September, a 45-member trade mission from Newfoundland and Labrador visited Guyana’s capital of Georgetown looking to forge relationships with local firms and entities. The Canadian delegation included businesses, representatives from industry associations like the Newfoundland and Labrador Offshore Industry Association, the provincial government and educational institutions. In November, a Guyana delegation travelled to St. John’s on a one-week fact-finding mission to get insights into the province’s oil and gas industry.

Anand Harrilall, the trade commissioner at the High Commission of Canada and a native of Guyana, has helped with the matchmaking on these trade missions. He says the relationship is a good fit. Both jurisdictions have small populations and similar cultures. He says Guyana’s people trust Canadians who come to their country looking to establish partnerships and joint ventures. However, he says match-making on business matters doesn’t happen overnight in Guyana.

“Relationships are key. Meeting people face-to-face helps move things along,” Harrilall says. “But you need to be patient. Things take time. Still, you need to be a bit more aggressive to make it happen. It’s a very competitive market and there are a lot of players in the market.

Indeed. Newfoundland and Labrador isn’t the only jurisdiction offering advice and looking to strike business partnerships in Guyana. Trinidad and Tobago is there. So is the United States, the United Kingdom, Mexico and other countries.

However, some companies from the province have made significant inroads in Guyana. One of them is St. John’s-based Atlantic Offshore Medical Services. The company provides medical services to the offshore oil and gas industry and other sectors. AOMS’ general manager Liam O’Shea says the company first became aware and interested in Guyana’s offshore in 2016. He says the company’s owners have been travelling to Guyana regularly since then to develop local partnerships. The work has paid off, as it’s struck a partnership with Guyana’s Eureka Medical Laboratories Inc. to form a joint venture called Eureka Atlantic Offshore Medical Services.

The company will provide medical services to the burgeoning Guyana oil and gas sector such as provide trained and certified medical professionals to remote offshore worksites and primary and emergency care at those remote work sites, supported by local on-call physicians and appropriate medical equipment and consumables. “As far as business culture goes there are differences that exist between most geographical regions. We focused on finding partners with like-minded visions and goals whose business ethics and integrity align with our own,” O’Shea says. “Our next steps are focused on actually ensuring the quality of the service deliverable prior to actively marketing in the oil and gas sector. We hope to be performing services in early 2018.”

AOMS won’t be the last Newfoundland and Labrador company to gain a foothold in Guyana. Strong says Guyana isn’t ready to do major fabrication work—such as building production platforms—but there are other opportunities there for provincial businesses. “What happens on a day-to-day basis once an oilfield goes into production, that’s your target. If you’ve got a company in Newfoundland that makes valves or pumps, you should be down in Guyana. Let’s get off our asses and do something because everyone else is going to be in Guyana.”

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