Energy Dept.’s oil sale plan may be dead on arrival

Energy Dept.’s oil sale plan may be dead on arrival – Chris Ram

Aug 10, 2019 News

Head of the Energy Department, Dr. Mark Bynoe recently disclosed that Government has taken the decision to hire a consultant who would be in charge of helping Guyana sell its share of the crude from the Stabroek Block.

Chartered Accountant, Chris Ram

But Chartered Accountant, Christopher Ram, in his recent writings, opined that Dr. Bynoe may be way in over his head on this one.
While the official did not go into details, Ram said that Dr. Bynoe’s proposition for Guyana to sell its own share of crude has substantially overestimated what will be collected. He said, too, that whoever the buyer is, will find the unit cost of transportation quite high. As such, Ram alluded that Dr. Bynoe’s plan may very well be dead on arrival.
To prove his point in this regard, the Chartered Accountant delved into some estimation, using the sketchy plan disclosed by Dr. Bynoe.

Energy Dept. Head, Dr. Mark Bynoe

Ram said, “According to the Doctor, Guyana’s crude oil will be sold in ‘million barrel cargos’ and a crude cargo lift will be used every eight to 10 days…Let us test Bynoe’s figures against the certainty that Guyana will receive only 14.25% of production for up to the fourth year.”
The Chartered Accountant continued, “We know too that in the first and second years, production will be 120,000 barrels of oil equivalent per day. From this we can easily calculate that over an eight-day period, production will be 960,000 barrels and over a ten-day period, production will be 1,200,000 barrels.”
He added, “In other words, Guyana would have to take all the production to permit one million barrels every eight days: and that is gross production, without deductions for petroleum used for fuel or transportation in the terminal system.”
Taking 14.25% of the eight days production, Ram noted that Guyana’s share is 136,800 barrels while its share over a 10-day period will be 171,000 barrels. Put another way, for Guyana to earn one million barrels as its share of production, Ram said it would need to accumulate its share over approximately two months.
In conclusion, Ram said that not only does Dr. Bynoe’s numbers and his plan not make any sense, but it is also embarrassing to leave then out there as part of Government’s policy.

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