October 19, 2017

AG hoping to commence environmental audits next year

…to determine Guyana’s capacity to deal with oil spill, other disasters

The Audit Office of Guyana (AOG) will, in 2018, be carrying out a number of audits which will analyse the capacity of the country’s relevant agencies to protect the environment and endangered species of animals.

The Audit Office of Guyana

The Leatherback turtle is famous for choosing Guyana’s beaches as nesting sites, but the advent of oil has created one more danger for which preparations have to be made

This disclosure was made by Auditor General Deodat Sharma in an interview, after he handed over the 2016 audit report on the public accounts of Guyana. Asked what areas the environmental audit would cover, he identified Barima-Waini (Region One).
“As you know, North West (Region One) has the four turtle (species). We have to preserve those, because we don’t want to have an oil spill; and it could be dangerous. I remember, several years ago, there was the cyanide overspill. It had an effect on the environment in the interior,” Sharma said.
This is a reference to the cyanide spill in Guyana in 1995. In gold mining, cyanide is used as an extracting agent for the ore. In the case of Guyana’s cyanide spill, the highly poisonous material spilled out of a reservoir into the Essequibo River.
But a new natural resource is set to be extracted on a large scale. Guyana has been making preparations for oil production by 2020, since ExxonMobil’s 2015 oil find in Guyana. In May of that year, Exxon confirmed that more than 295 feet of high-quality oil-bearing sandstone reservoirs were encountered at its Liza 1 exploration well.
In late June 2016, Exxon’s drilling results at Liza 2 revealed more than 58 metres of oil-bearing sandstone reservoirs in Upper Cretaceous formations. The well was drilled to 5,475 metres at 1692 metres water depth. Drilling results confirmed recoverable resources to be between 800 million and 1.4 billion barrels of oil equivalent. Data from the Liza 2 well test is being assessed.
The company had announced that it made its third significant discovery in its drilling explorations offshore Guyana. Its partner, Hess Corporation, had noted that the Liza 3 exploratory well’s net value could be US$6.2 billion based on calculations from the Bank of Montreal (BMO) Capital Markets.
Drilling on Payara began on November 12, 2016, with initial total depth reached on December 2, 2016. In January of this year, the oil giant had announced it had struck oil in its Payara-1 well, targeting the same type of reservoirs as the well’s Liza counterpart.
The lesser known Orinduik oil block has been under the administration of Eco Guyana and Tullow, after they signed a 10-year petroleum prospecting licence and production sharing agreement with Government last year.
Oil spills
Throughout all these exploration activities, a pertinent question has been the capacity of the relevant agencies to protect the environment in case of an oil spill.
Last year, President David Granger commissioned Guyana’s first oil spill response operation service at the Gaico Wharf at Nismes, West Bank Demerara.
Gaico Oil Spill Response Operation Services, which was coined by Komal Singh, was set up as a pre-emptive measure against probable spillage once production commences in the future.
The Gaico Company began in 1991 with Singh working on small construction projects in Region Three. At the commissioning, Singh stated that he had noticed that there were a number of ‘near misses’ of oil spills and decided to pursue the avenue of preparing for one in Guyana.
He said the company has since invested in a supply boat to work alongside rigs, and supply them with fuel and cargo while preparing for any occurrence of an oil spill.
“Should there be a spill anywhere, we can respond within 24 hours,” he said, adding that the company is in the process of putting together documents to gain approval for an oil spill facility which will collect the contaminated soil and process it.
The businessman also said that he had recognised that Guyana was not prepared for any oil spills, thus “Guyana can rest assured that there is a company here today that will invest to protect our land, our coastline, our birds, our mangroves, and all Guyana.”