Jan 05, 2021 News
– How Guyana is emerging as the new frontier for N.L.’s oil services sector
By Terry Roberts/CBC News – Published on Dec 21, 2020
Kaieteur News – It’s mid-morning at Crosbie Group on Hebron Way in St. John’s, and a team meeting in the boardroom features some very familiar chatter.
Chief operating officer Mark Collett asks one of his vice-presidents, Jeremy Whittle, about progress in recruiting a new rope access crew for the offshore.
“They’re actually working right now. We’ve got crews on the platform,” says Whittle.
But Collett and his team are not talking about exterior maintenance work or deck services for familiar platforms like Hibernia or Hebron.
They’re referring to the Liza Destiny FPSO — for floating, production, storage and offloading — vessel anchored in deep water off the coast of Guyana, some 5,000 kilometres south of St. John’s.
“And it’s all to ExxonMobil and SBM standards?” Collett asks.
“Yes. Global standards,” Whittle assures his boss.
‘It’s life-changing to watch’
It’s new territory for this fourth-generation St. John’s company, and a rare sign of enthusiasm for an industry that has been battered by a worldwide pandemic, and a growing movement to wean the province off its economic dependence on oil and gas in order to combat climate change.
“It’s exciting times,” Collett tells CBC during an interview.
“For me, it’s life-changing to watch something like this unfold at a later stage of my career.”
Crosbie Group is part of a swarm of companies from the Newfoundland and Labrador oil services sector that is making a play for business in Guyana, where spectacular oil discoveries off the coast of this developing country of less than 800,000 people is poised to make it one of the richest places on the planet.
That will mean big opportunities in oil and gas, but also in others areas such as health, education and infrastructure as Guyana looks to modernize.
Companies are scrambling to get their foot in the door, with some 170 firms with links to the Newfoundland offshore taking part in a virtual Guyanese trade mission last year organized by Noia, the province’s oil and gas industries association.
A similar event is planned for January.
A familiar story
It’s a story with many parallels to Newfoundland and Labrador, which welcomed the transformative oil industry at a time when the fishery was collapsing in the early 1990s.
In order to deliver the services needed by this new industry, many companies partnered with British and Norwegian firms to develop a local service and supply sector.
Years later, the sector has matured, but is being pinched by a double-whammy of COVID-19 and a green movement that has many viewing oil production through the same lens as the tobacco industry.
“We don’t see a whole lot of growth opportunities here at home right now,” Collett says.
So companies like Crosbie have seized on Guyana.
“Newfoundland companies are really fit for purpose. We’re small. We’re nimble. We’ve done this,” says Caron Hawco, an oil industry consultant who has visited Guyana a dozen times in recent years, studying the market and helping companies link up with Guyanese partners.
She says the opportunities are endless, and she’s noticed a “real lovely kinship” between business leaders from both Canada and Guyana.
“There’s just some magic that goes on between them,” she says.
“I suspect we will see at least 20 to 30 companies successfully having a good footprint in Guyana, maybe more.”
Crosbie wants to be at the forefront
The Crosbie Group is determined to lead the way. The company reinvented itself in the face of economic turbulence a generation ago to capitalize on a blossoming oil industry, and now employs more local people in the offshore than any other Newfoundland and Labrador company.
But with uncertainty casting a dark cloud over the offshore, Crosbie is reaching outward.
The company has expanded into the Maritimes, acquiring 50 per cent ownership in a Nova Scotia company that specializes in onshore industrial services.
More recently, Crosbie has caught the wave of excitement over Guyana.
“We just see tremendous opportunity in that region,” says Collett.
Crosbie has partnered with a Guyanese company to form a new venture called Panthera Solutions.
They’re winning contracts. Training up local workers. And exporting Newfoundland and Labrador expertise to the Guyana basin.
More than a dozen Crosbie employees have brought their skills to Guyana, and Collett believes it’s just the beginning.
Doubling its workforce
There are projections that daily oil production in Guyana could soon skyrocket to 750,000 barrels, with as many as five production platforms, and Collett wants Panthera Solutions to be the preferred service provider for exterior maintenance and specialities such as crane operations.
If all goes according to plan, he predicts Crosbie’s worldwide workforce could double to some 1,000 employees in three to five years, with up to 70 percent of its business activity outside the province.
“We’re just getting started,” says Collett.
It helps that the key player in Guyana is ExxonMobil, the same oil giant that leads operations on the Hibernia and Hebron platforms.
So companies like St. John’s-based Atlantic Offshore Medical Services are a known quantity when they go to Guyana, since ExxonMobil is already a “major client,” says AOMS CEO Liam O’Shea.
AOMS was established by Dr. Ciaran O’Shea — Liam’s father — and has been providing primary emergency and occupational medical services to the N.L. offshore for four decades, and hopes to have similar success with its new business partner in Guyana.
“[If] we could build the same model that we have here [in Guyana], and be as successful there, we would probably be, I would think, at least twice the size of the organization there than we are here,” says Liam O’Shea.
The next hurdle to overcome is pandemic travel restrictions that limit business interactions between the two countries.
But Caron Hawco says that hasn’t dampened the excitement, or potential.
“It’s just really refreshing to see Newfoundland and Labrador companies looking beyond our borders, building on what we’ve been able to achieve here, and bringing it somewhere else,” she says.
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