Latest update November 5th, 2024 1:00 AM
Rystad Energy part of Exxon’s lobbying machine – Dr. Mangal
By Kiana Wilburg
Former Petroleum Advisor to the Government, Dr. Jan Mangal, is not surprised by the glowing reports of Rystad Energy, a Norwegian research company, which predicts that Guyana will get massive returns from its oil deal with ExxonMobil.
That’s because Dr. Mangal says that Rystad Energy is part of ExxonMobil’s lobbying machine.
In his Facebook page, Dr. Mangal said, “I had discussions with Wood Mackenzie (A UK Company that also foresees massive oil wealth for Guyana) and Rystad in Houston regarding possible support for a country like Guyana to challenge a company like Exxon. After a couple months of discussion with Wood Mackenzie, they called me and were very apologetic.”
Oil and Gas Consultant, Dr. Jan Mangal
He added, “They could not continue to talk with me. Their executives were worried their interaction with me would annoy Exxon, and most of their revenue comes from oil companies (including Exxon). So Guyanese, please always apply the rule of ‘follow the money’ when assessing the information being provided to you (i.e. check if your source could be biased, and remember money is one of the strongest drivers for bias).”
Dr. Mangal pointed out, too, that Rystad and Wood Mackenzie are competitors for Exxon’s business; hence, they will compete to please ExxonMobil.
“But Rystad is the newer and smaller of the two, the upstart, thus it will be more aggressive in its actions to please Exxon, that is, to curry favour with Exxon. That is why Rystad is prepared to produce drivel like this.”
LOPSIDED ANALYSIS
It was on Sunday that Kaieteur News exposed how Rystad Energy’s pronouncement on Guyana’s future oil wealth from the Stabroek Block was not informed by an analysis of the Guyana-ExxonMobil Production Sharing Agreement (PSA).
That contract notes that Guyana will benefit from a two percent royalty and a 50/50 split of profit oil. But Guyana’s share of the profit oil can be lessened by several factors when one considers the terms of the contract as well as the loopholes available for abuse by the oil company.
Rystad’s Senior Analyst, Sonya Boodoo, said that the company did not look at the contract for its assessment of the government take. The official confirmed that the entity’s deductions were based on “bits and pieces of information in the public domain”.
Kaieteur News then asked Boodhoo to explain how an analysis of Guyana’s oil future with ExxonMobil can be done when all the variables that can affect the government’s take (especially those listed in the contract) have not been considered. Boodhoo simply said, “We compare contracts based on government’s take and project profitability.”
Boodhoo was also asked to comment on the fact that while her company paints a glowing report of Guyana’s take from the Stabroek block, the International Monetary Fund (IMF) deemed the contract to be generous to the investor.
Boodoo said, “Basically, I think what we looked at was facts, and I am quite confident that what we say stands. If we look at all the offshore regimes, generally, the government’s take is 80 percent and Guyana’s is 59 percent. This is quite low, but we have to consider that Guyana is a frontier region and the average for frontier regions is 45-70 percent and Guyana falls in the average of the frontier regions. I don’t think it is too favourable to the government or to the investor. I think it is quite average.”
She added, “Had the regime been more favourable towards the government, you might not have had people coming in to invest.”
While the Rystad Energy Group is optimistic about Guyana’s take in the Exxon Agreement, the IMF, which has existed for 72 years, has been way more cautious in its statements. In a report it submitted to the government last year, the IMF said that the oil deal Guyana has with ExxonMobil is fraught with opportunities for abuse. It said that these very loopholes could result in a significant dent in the revenue Guyana is supposed to get from the oil find by the operator. Given its findings, the IMF recommended that Guyana hasten moves to revise the current framework of its PSA.
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