Tullow’s contribution for training Guyanese barely covers one semester

Tullow’s contribution for training Guyanese barely covers one semester – US University Instructor

Aug 23, 2019 News

By Kiana Wilburg

Since the announcement of a significant oil discovery on the Orinduik Block, the spotlight has been placed on the provisions contained in the deal Tullow Oil negotiated with the Granger administration in 2016.

University of Houston Instructor, Tom Mitro

Just a few days ago, Kaieteur News exposed that the operator will pay Guyana a one percent royalty but it will be able to recover same in cost oil.
But that is not the only provision that has transparency advocates scratching their heads.
During his perusal of the Orinduik Production Sharing Agreement (PSA) University of Houston Instructor , Tom Mitro, noted that the license holders for the block, being Tullow Oil , Eco Atlantic and Total, only make a tiny contribution for the training of locals.
The Petroleum Consultant who has over 30 years experience in the field, noted that the oil companies are only required to pay US$25,000 per year. “…That amount is so small; I wonder why they even bothered. That will barely pay for one semester at a university in the US,” remarked the Instructor.
In other countries, however, Tullow makes a much more sizeable contribution for oil and gas training. In Uganda, Tullow deposits with the government, or its nominee for the exploration period, US$100,000 per six months; US$150,000 per 12 months for the development phase, and following the commencement of production; and a deposit of US$300,000 per 12 months.
In the case of Ghana, Tullow hands over US$300,000 annually for oil and gas training.
Considering these and other factors, Mitro told Kaieteur News that not only is the PSA unusual but it is worse than the deal that was cut with ExxonMobil for the Stabroek Block.
GUYANA ACCEPTS PITTANCE
Tullow Oil is not the only company from which Guyana accepts a pittance when it comes to funds required for the training of locals.
With respect to Repsol which is operating Guyana’s Kanuku Block, the Guyana Geology and Mines Commission (GGMC) collects US$30,000. Meanwhile, this Spanish multinational gives Liberia a “minimum” of US$250,000 annually and US$300,000 per year to Iraq. They too, benefitted from an allowance for technological and infrastructural support.
In the case of Anadarko which holds the license for the Roraima block offshore Guyana, the government settled for US$40,000 while this company contributes US$1M annually to Liberia and Mozambique.
As for ExxonMobil’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL), and its two partners, Hess and CNOOC/NEXEN, the government comfortably accepts US$300,000. But in the case of Liberia, Exxon is required to hand over US$750,000 plus a US$500,000 IT support fee.
It also gives US$500,000 annually for training of locals in Chad along with the same IT support contribution that is granted to Liberia.
In the case of other operators, Guyana collects US$55,000 from Mid-Atlantic Oil and Gas which holds the licence for the Canje block while Ratio Energy and Ratio Guyana provide US$60,000 for the training of locals. CGX which holds the licenses for the Demerara and Corentyne blocks gives US$$100,000 per block annually.
None of the Production Sharing Agreements Guyana has with offshore or onshore operators, provide funding for technological and infrastructural support.