Energy Dept. taking incorrect stance on important issues- Should be focused on renegotiation of oil contracts, etc – Dr. Mangal

Apr 16, 2019 News

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By Kiana Wilburg
The Department of Energy (DoE) has made it pellucid on several occasions that it will not be pursuing the renegotiation of the Production Sharing Agreement (PSA) with ExxonMobil’s partners, Hess and CNOOC, as well as its subsidiary, Esso Exploration and Production Guyana Limited (EEPGL).
It has also expressed that it is unconcerned with the fact that it is using a UK firm, Bayphase Consultancy, to review the Field Development Plans for ExxonMobil, even though Bayphase is Exxon’s client.
Taking the aforementioned into considering, among other factors, Oil and Gas Consultant, Dr. Jan Mangal is convinced that the Department of Energy is taking an incorrect stance when it comes to critical issues on the sector.
During an interview with Kaieteur News recently, Dr. Mangal said that the DoE should be championing the need for a re-negotiation of the contract for Stabroek Block. “But they are not and are instead, wasting time talking about future blocks when all the value for Guyana may be in the Stabroek Block,” Dr. Mangal commented.
He said, too, that the DoE should be spearheading a move to rescind the awards of the Kaieteur and Canje Blocks, but instead, nothing is being done in this regard.
Dr. Mangal added, “The DoE should have championed the need for cost reviews and audits, but initially they did not. And now it seems the cost review will be a stitch-up or just a farce, with the hiring of BayPhase.”
Further to this, Dr. Mangal said that the current set-up or approach for the Department also differs from what was originally planned. Dr. Mangal had expressed on his Facebook page that the department was supposed to be seen as one of the premier government institutions for the most capable of Guyanese as well as the best foreign oil and gas experts.
It was also expected to strive to be seen in a positive light by all stakeholders.
“It must be the picture of a well-run, well-resourced, and transparent organization. It must be viewed as working for the long term interests of the people of Guyana, as opposed to for the interests of business elites, politicians or foreign companies. It must share information regularly via its website and hold regular press conferences (weekly or at least monthly),” Dr. Mangal shared.
He told this newspaper however that there have been some deviations, but these are expected. The Oil Consultant said that as new people are brought in and time evolves, plans and ideas will change.
Dr. Mangal said, “But I see some troubling signs. The DoE has yet to hire the teams of oil and gas professionals who have decades of experience with the ‘major’ oil companies. And I stress ‘major’ oil companies, which are Exxon, Shell, Chevron, BP, etc. We should not hire people from the smaller companies, at least not now.”
The Oil Consultant continued, “We need people who have not been exposed ethically. The major companies try to be squeaky clean, but some of the small companies can be cowboys. And the major oil companies have a lot of processes to protect themselves, but this is less so in the smaller companies. Hence I would be more comfortable hiring a commercial manager or technical manager from Shell or Exxon, than from a minnow company like Maersk.”
The current Petroleum Advisor to the Government, Matthew Wilks, was the Chief Commercial Officer of Maserk Oil, which is based in Denmark. Wilks was there for five years and one month. He left there in January 2018, and was hired by the Government in August.
Further to this, Dr. Mangal said that in transferring responsibility for the oil sector from the Ministry of Natural Resources to the new DoE, one has to be careful about the transfer of staff as well.
He said, “We have to remember that many unacceptable things occurred in the Ministry of Natural Resources. There was no progress for three years which benefited ExxonMobil and not Guyana, and the Kaieteur and Canje blocks where fraudulently awarded, which also benefited ExxonMobil. Hence there were people in the Ministry who should have been kept away from the new DoE, but I worry that some of these individuals have not been kept away.”
The Oil and Gas Consultant also noted that the DoE was meant to be a showcase of how the new government should function for the benefit of the people. He said that it was meant to be a pinnacle to which other government bodies could aspire; an emblem of efficient and impactful public service.
He said, “It needed to have the best people from Guyana, from the Diaspora and from around the world. Its operations needed to be transparent, with data and information published on its website, with plans and strategies published on its website, with the profiles of its employees published on its website, with minutes of meetings published, with procurement processes published and transparently tracked, etc.”
Dr. Mangal said there is still an opportunity for the DoE to improve as it grows, but the foregoing signs have been discouraging.

 

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