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There can be no excuses when it comes to oil
By Leonard Gildarie
This past week there was lots of news.
Leonard Gildarie
Guyana woke up and learnt that Tullow Oil PLC and its partners struck oil in its block adjoining ExxonMobil’s.
I was not surprised. There had to be oil present. In fact, the entire offshore basin will be de-risked in coming years, because the improved technology that exploration companies have at their fingertips now will find the oil.
Guyana has not yet come to grips with the true implications.
For one, oil is not only in the Stabroek Block being developed by ExxonMobil. It appears to be everywhere. Secondly, it means our oil revenues can potentially increase ten-fold, as other operators will be setting up their offshore platforms.
What we see happening with the Stabroek Block and ExxonMobil and its partners will multiply rapidly.
Tullow and partners have been virtually catapulted to the forefront and the companies that will come knocking to get a piece of the pie will mirror the ExxonMobil experience.
The share prices of Tullow and its partners have jumped overnight on news of the discovery.
We have some golden opportunities that have emerged in Guyana. Our politicians will have no choice but to band together to ensure we get a good deal. They either do so or be remembered as overseeing the worst deals in this country’s history.
One can also rightly question why it is that we have little or no interest in reversing the growing tide of discontent. We will await and judge how much they love this country.
Tullow has not yet signalled intentions to develop its concessions and start production. It is too early. There will be more exploratory wells.
We realistically may be looking at 2025 before any production activities.
ExxonMobil’s licence is up for review next year. It should not be treated as routine or par for the course. Rather, Guyana will again have a golden opportunity to ask for a better deal. That review is like our Appeal Court…anything can and should happen.
Let us be real here. What ExxonMobil got from the Stabroek Block in terms of the conditions and percentages was a dream for them. On the negotiation table, the first offer is never going to be accepted. There should be counter-offers and rejections and more bargaining. It can take months to hammer out an agreement that is acceptable to all. Not days or a week or two.
In this modern day where so much is at stake, when the future of countries hang on a few politicians, we have to be serious.
It is criminal to do otherwise.
In Trinidad, a minister got herself in trouble for something that happened years ago.
She and her husband have been embarrassingly arrested. She was fired and now faces charges. The tables have turned and she has fallen from grace.
Trinidad’s PM, Keith Rowley, desperate to fix his country’s finances and facing a dwindling supply of oil, has been aggressively calling on oil operators to review the contracts.
He has acknowledged that there is sanctity in the contracts, but his people are desperate for a little more…they simply cannot starve while their natural resources are being siphoned.
I have said it before, ExxonMobil and its partners have the perfect opportunity to make Guyana happy. We have had a good relationship with the US in recent years. That should not change now. Tens of thousands of our people live there.
The discovery in the Stabroek Block and now by Tullow in its concessions has Suriname announcing that it will seek financing to conduct its own offshore explorations.
The Caribbean is a zone of peace, as has been stressed time and again. It is not like the Middle East where conflicts and civil wars have threatened supplies of oil, affecting prices.
The US dependence on the Middle East, therefore, will likely start shifting to an area where the quality of oil is high and there is less resistance. The challenge will be for our politicians to find a win-win formula.
ExxonMobil is one of the biggest companies in the world, with shareholders, and therefore is interested in profits. However, the obvious benefits of Guyana versus the Middle East and elsewhere will always prove an attractive prospect.
We have the ball in our hands…the basket is right in front of us, and no one is defending.
(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper)
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