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Five years after…

May 27, 2020 Features / Columnists, Peeping Tom

There was once a man in Guyana who was so rich that when he got drunk he would show-off on his friends by lighting his cigarettes with a $100 bill, the highest denomination in those days. This practice is described as burning or blowing away one’s wealth.
Guyana is burning wealth over the Atlantic. It is allowing resources to be wasted at the same time that it is begging the international community for money.
The government has approached the World Bank to borrow US$5M in order to help fight the COVID-19 pandemic. At the same, time Guyana has allowed ExxonMobil and its partners to flare nine billion cubic feet of natural gas, worth well over US$3.6M.
Five years ago, Guyana discovered oil. It means that Guyana had five years to prepare for both oil and natural gas.
When oil is pumped natural gas is also brought up. This natural gas is valuable and adds to the value of the country’s oil resources.
Five years onwards, it has still not put anything in place to tap this vast resource of natural gas. Instead, Exxon is releasing the gas into the atmosphere (a process called flaring and which pollutes the environment). Natural gas is not a clean fuel; it is pollutant and therefore would be against the principles for the so-called green state.
APNU+AFC signed a contract with Exxon which gives the company the upper hand in determining what happens to the natural gas. It should have included in the contract obligations for Exxon to bring the natural gas to shore and to establish a natural gas plant. It did include this in the contract.
Exxon used the upper hand, which it was handed, to decide that it would re-inject some of the natural gas back into the oil wells and would flare the remainder. This is why nine billion cubic feet of natural gas has been flared so far.
Guyana eventually took a decision to bring the natural gas to shore. However, the APNU+AFC waffled when it came to deciding how to approach this issue. According to Jan Mangal, no decision was taken as to where to locate the natural gas plant.
Some persons in the government reportedly wanted the plant to be located at Mahaicony while others preferred a location in West Demerara. The indecisiveness of the government in identifying a location meant that little progress has been made. By the time oil production began, Exxon had no choice but to flare the gas which was in excess of that which it was re-injecting into the wells.
It is inexcusable that the government had five years to get these plans going but has done precious little. Yet, the Department of Energy has the temerity to report that plans are well advanced for bringing the gas to shore.
So what are these plans which are advanced? You would not believe the answer given by the Department of Energy.
Kaieteur News quoted the Head of the Department of Energy as saying that there is a draft memorandum of understanding and a cogent working group. This has to be the joke of the century. Is this what constitutes advanced plans to bring oil to shore – the establishment of a working group and the signing of a memorandum of understanding?
By now – five years after the country knew that it had oil and natural gas – a natural gas plant along with other downstream activities should have been in place. Every Guyanese should have been readying themselves to benefit from free electricity by next year, compliments of natural gas.
This investment would not have cost Guyana a cent. It should have been part of the agreement with Exxon. We will take five years from now to get these plans in place and only if there is a new government. The present government has proven itself incapable of delivering natural gas to shore.
Guyana is saddled with incapacity which is hampering progress in the energy sector. It is time the entire management of the oil and gas sector be revamped and placed in the hands of persons who will be able to ensure that we never again lose another five years because of indecision and indecisiveness.

(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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