Latest update November 26th, 2024 1:00 AM
Use Payara permit as bargaining chip for better oil deal – Experts tell Guyana
“The evidence is clear that the deals signed and practices conducted by the multinationals in their operations in Guyana have not been in keeping with either best industry practice or the best interests of the people of Guyana.” – Anthony Paul
Trinidadian Energy Expert, Anthony Paul
Guyana should not approve the Payara Field Development Plan (FDP) until it secures a better deal with ExxonMobil and its partners on the Stabroek Block. That is the advice of industry experts Anthony Paul and Dr. Jan Mangal, individuals who have stridently spoken in defense of Guyana’s patrimony, even after departing their Government-appointed posts.
The Stabroek Block Production Sharing Agreement has been widely criticised, locally and internationally, for its lopsided terms. The PSA is so poor that Global Witness found the difference between its current regime and a fair deal to be US$55B. It has also been found to be riddled with illegalities.
Dr. Mangal, who served as Presidential Advisor on Petroleum to David Granger, recently posted comments to Facebook on the matter.
“The Payara project should not be approved, as it will result in much more leakage of Guyana’s wealth to Exxon.” Mangal said. “We need a fair contract before approving the Payara project.”
Mangal had told Kaieteur News in a previous interview that oil companies tend to rush production in a ploy to get away with the lion’s share of the nation’s wealth. They are able to do under poor contractual terms.
“Oil companies always want to pump everything as fast as possible…Don’t buy into the hype…Countries [like Guyana] benefit from longer, sustained production.” Mangal had said.
Former Presidential Advisor on Petroleum, Dr. Jan Mangal
Yesterday, Irfaan Ali was sworn in as President, bringing an end to a five-month electoral process.
“If the PPP approves Payara,” Mangal stated, “then they are selling out the people of Guyana, and then the PPP are giving away our wealth for peanuts, just like the Coalition.”
Paul, who has more than three decades of experience in the oil industry, said that the evidence is clear that the deals signed and practices exercised by multinationals in Guyana have not kept with industry practice, nor have they had the best interests of the Guyanese people at heart.
Any new Government, Paul urged, should carefully analyse the losses projected by independent analysts, then work to re-balance the order.
Like Mangal, Paul stressed the importance of taking the time to make wise decisions.
“The government,” he said, “will be aware that time is of the essence, but is also aware that rushing into bad decisions is worse than delaying to get a good understanding of the available options.”
He said that Government should let its oil sector partners know that their agreements should see them as equal partners, with fair benefits to their shareholders as well as the people of Guyana.
President Ali said in a brief interview following his swearing in, yesterday, that he will strive to ensure the wealth gleaned from oil is used to benefit the people. However, there has been no signal of intent to get better terms out of the controversial deal. ExxonMobil’s senior Vice President, Neil Chapman even said during the company’s second quarter earnings call last Friday that both parties are in support of the contract as well as the Payara Field Development Plan. Much like APNU+AFC, the PPP/C has shown no interest in renegotiating the Stabroek Block deal. Its leaders have refused to renegotiate the contract, and have given ExxonMobil assurances that it will stay intact.
The Stabroek Block Production Sharing Agreement (PSA) was signed by the Janet Jagan led administration in 1999 with Exxon’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL), and revised in 2016. It was subsequently renewed by former Minister of Natural Resources, Raphael Trotman. Two other companies, Hess Corporation and CNOOC/Nexen , are partners in the Stabroek Block consortium.
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