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Every aspect of petroleum sector under review; nation will get answers by Oct. – Pres. Granger
President David Granger
Come October, the nation should become more aware of what is going on in the oil and gas sector. This will in turn give citizens a better understanding of just how much wealth the nation is poised to gain.
This commitment to inform the nation was made by President David Granger at his recently held press conference—the first in almost two years.
At that forum, there were a few questions that the President could not provide specific answers to.
The Stabroek Block that is currently being explored by ExxonMobil is considered one of the largest in the world—6.6 million acres (26,800 square kilometres). Already, the oil giant has announced nine lucrative discoveries. Even without taking the last discovery into consideration, Guyana’s proven oil reserve was estimated to be over four billion barrels of oil. There have only been two dry holes so far.
However, it is not yet known to the Guyanese public what percentage of the Stabroek Block has been explored. Experts told this newspaper that if those nine discoveries have been made through exploration of a small percentage of the block “then Guyana may have an oil reserve beyond your imagination if things continue at this pace. Also, with the territorial threats, Guyana should make it its priority to know exactly what is going on out there.”
Knowing the percentage of block explored thus far can give Guyanese perspective. The President was asked about this. He said he did not know, but endeavoured to provide an answer in the near future.
“I pointed out earlier that every aspect of our petroleum industry is being brought under review by the Department of Energy. I cannot say what percentage of the Stabroek Block has already been allocated. But, every aspect of the industry; the exploration, legislation administrative, operational, negotiations, every aspect is being brought under review.”
Further, the President said, “we are recruiting international experts to give advice, so I will not like to make any statement that is going to tie the hands of the Department of Energy at this point and time. I am going to ask for a very thorough briefing, maybe by October, where we can sit and examine all of the questions raised over the last year or so with the Head of the Department of Energy and his team of international experts.”
The President was also asked if Guyana will be repaying ExxonMobil for the cost incurred for the drilling of unsuccessful wells.
Usually, when the ring fencing mechanisms are employed, host countries only pay for successful wells. However, the International Monetary Fund (IMF) and other agencies warned that because of the weaknesses in the Production Sharing Agreement (PSA) Guyana has with ExxonMobil, the nation can end up paying for unsuccessful wells too.
This could significantly reduce the amount of revenue that the nation will collect. ExxonMobil had two unsuccessful discoveries thus far dating back since last year.
The President was asked if Guyana will be paying for these wells.
He said, “I cannot say at this point and time about the payment for unsuccessful wells. These are recommendations that will be made by the Department of Energy. It (the Department) was deliberately placed under the Ministry of Presidency to enjoy the best security and to have easy access to Cabinet. We will have the opportunity to query any decisions made and ensure the interest of the Guyanese people is protected.”
The President said the only office of the Energy Department is in the compound of the Ministry of Presidency. He said too, “I can assure you that that the Department of Energy established on August 1 (last) will function very efficiently.”
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