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Crude Lifting Agreement to remove opportunities for abuse – Energy Dept. Head
Energy Department Head, Dr. Mark Bynoe, has indicated to this newspaper, that the Crude Lifting Agreement still has a few issues to be ironed out but it is close to completion.
During an interview on Kaieteur Radio’s “Guyana’s Oil and You” programme, Dr. Bynoe said that the agreement came out of a template which was designed by the Association of International Petroleum Negotiators (AIPN) in 2001. The Director noted that modifications were done to suit the needs of the country.
Dr. Bynoe said, “Now what the agreement speaks to is that the four investors (Government, Hess, ExxonMobil and CNOOC/Nexen) are entitled to specific lifts.
Energy Dept. Head, Dr. Mark Bynoe
“If the Floating Production Storage and Offloading (FPSO) fills up at peak production every eight to 10 days then we call that an entitlement.”
The Director added, “So each of the investors would be entitled to a lift and that goes around so Hess takes the first, Exxon takes second, Guyana takes a third … and so it goes on and that is what the agreement outlines. Then when you are ready for your lift, you have to advertise two months in advance.”
Further to this, the Energy Department Head said that the agreement outlines various costs if an investor is to miss a lift without proper warning. He noted, however, that the rules of the agreement are not that inflexible since they allow an investor to cede his turn to someone else if it is recognised that taking the entitlement at that time would not be possible.
He said, “So nothing prevents you from saying, ‘Hey Hess or Exxon, why don’t you go take the lift.’ So it is not regimented in saying Exxon takes a lift every four days etc. You can cede to someone else. However, we have to be careful that you aren’t just missing a lift because you are speculating oil prices.”
Dr. Bynoe told Kaieteur Radio that this is an important element that would be up for discussion as the agreement nears completion. He further noted that the document would be in place long before year-end while noting that a lot of work has gone into this document.
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