Local Group in Vreed-en-Hoop shore base inks US$300M agreement with Exxon to support Yellowtail Project

Apr 23, 2022 News

Kaieteur News – Guyanese businessmen involved in the ambitious Vreed-en-Hoop Shorebase Inc. (VEHSI) project have inked a US$300M agreement with oil major ExxonMobil Guyana to provide shore base services to its upcoming US$10B Yellowtail development offshore Guyana.

An impression of the VEHSI project

Natural Resources Minister Vickram Bharrat (standing centre) takes a picture with the NRG/VEHSI stakeholders

Andron Alphonso exchanges the agreement with Exxon’s President Alistair Routledge after signing

The local investors are confident that this transformational venture will among other things; significantly reduce the cost of shipping, while creating a springboard facility that will aid in the development of other local service provision companies here.
NRG Holdings Inc. Nicolas Degoo Boyer, one of the main partners in the business consortium told a gathering of government representatives, Exxon officials and other oil and gas stakeholders that the group expects its operation to kick off by the fourth quarter of 2023, recognizing the immediate need for the facility to support Guyana’s new energy industry.
Boyer explained that it was only in 2020 that his company, Andron Alphonso of ZRN Investments Inc. and Nazar ‘Shell’ Mohammed of Hadi’s World Inc. got together in a bid to provide the project under NRG Holdings Inc. Shortly after, a competitive tender process was initiated by Stabroek Block operator Exxon Mobil, seeking the provision of support infrastructure for its offshore Yellowtail development.
After millions of dollars being spent, much geotechnical and engineering work, and the lingering questions as to whether the local companies could band together and successfully execute the massive project, Boyer said that yesterday’s signing agreement with Exxon was the first step toward its returns. Those said returns may not immediately come in terms of repayment as Boyer informed that project data identifies monetary returns well into the future.
Instead, the businessman said, what must be shown to separate the shore base project from all other projects in the country, is that this investment is a catalyst for growing country and people. “What drove us through this process was a responsibility, a privilege that we had to do this for the country because the country needs the development that will increase local content, reduce commercial shipping cost, provide land for service companies and provide land in a place that is not impacting on existing operations…” It is for that reason, Boyer said, that the company went through and is still conducting a complete environmental impact assessment which has so far provided data on the specific maritime space that had never existed.
Responding to criticisms of government investment, Boyer said that the shore base project is totally financed by private investors who are taking all the risk. “This is entirely a private initiative and that means that the risk capital is being borne by the developers, the entrepreneurs, and our partners.” Government he said has played its role in providing the environment for the project’s development.
ExxonMobil’s President Alistair Routledge said that the incoming shore base development falls in line with the development position of the Stabroek Block operators, the government and the Public Sector Commission. He told the gathering that it is unprecedented the pace of oil development in a country that has very limited industrial and major infrastructure. The shore base project is one that addresses this shortfall while adding significant value.
He told the gathering that unlike the two and a half acre Guyana Shore base Inc. at Houston, East Bank Demerara, the new facility will be much larger. “This project will be 10 times that area,” he stated, “and there will be much more capacity to do more construction and assembly in country that will truly be a spring board for the yellowtail and future developments to increase local content for what we do in the oil and gas industry.”
The shore base project is also a means to increasing local content and to spread the benefits of investment decisions. In Region Three where the project is located, Routledge opined that huge opportunities along with the upcoming gas to energy project, also slated for that region.
Natural Resources Minister, Vickram Bharrat, was keen to note that he saw the upcoming project as being among those that will spread development across the country. He touted that Region Three is the fastest growing part of the country and would experience even more opportunities with the upcoming gas-to-energy project.
“Because of oil and gas many opportunities are coming to Guyana,” the minister mentioned. He said that the government has been pushing local content while adding that there are over 100 areas where Guyanese can partner with foreigners or seek to invest alone. “There are so many services that Guyanese can offer in the oil and gas sector that we are now learning of it.”
The NRG Holdings is a family-owned business. It involves Alfro Alphonso, Nazar ‘Shell’ Mohammed and of Eddie Boyer. Their sons, Andron Alphonso, Nazar ‘Shell’ Mohammed and Nicholas Boyer respectively, lead in the project.