Latest update February 17th, 2025 9:42 PM
Latest News
- BREAKING NEWS: SIX SOLDIERS SHOT REPORTEDLY VENEZUELAN GANG
- Surinamese given options to invest in first oil project
- Oil-rich nations struggle with corruption
- Netanyahu vows to ‘finish the job’ against Iran with support from Trump
- Diana Chapman triumphs in stiff competition to win first soca monarch title
Guyana lost US$ billions by avoiding open, public tender for Canje Block
Former President Donald Ramotar
Kaieteur News – Governments around the world make big money when they award oil and gas contracts by open, competitive bidding processes. They also ensure that when such a process is upheld transparently, the best and most eligible companies are chosen to do the job.The US Geological Survey (USGS) published a report in the year 2000, which estimated the Guyana-Suriname basin to hold 13.6 billion barrels of oil and 32 trillion cubic feet of natural gas. Newer finds and estimates have already surpassed that amount.
By refusing to wait, and take the time to study the basin and develop a foolproof open bidding process, Guyana likely forfeited billions of dollars in upfront revenue.
Guyana’s neighbour Brazil has had many licensing rounds, and its experiences give a glimpse of what Guyana could have gotten if it had put the procurement of its blocks through a competitive bidding process. Brazil has made billions of US dollars from public auctions alone. Brazil typically sets a minimum bonus for the award of certain rights. In one case one year ago, the country set the minimum signing bonus for one block at US$356M. This is because the country knows and skillfully markets the value it possesses, to companies which are capable. The opposite happened when the Canje Block was applied for and awarded. There was no competitive bidding process, and the block was awarded to a company with nothing of value to its name.
The application for the block was made in March 2013. The company was incorporated in Guyana, in April of 2013, which means Mid-Atlantic Oil & Gas Inc. made an application for a block when it was not even formed.
The processing period lasted two years, and suspiciously culminated with an award on March 4, mere weeks before the 2015 General and Regional Elections. Then President Donald Ramotar claimed that the processing delay was due to Venezuela’s navy seizure of Anadarko’s contracted seismic vessel in 2013. Notably, he made the award just weeks before ExxonMobil’s first discovery was announced in May 2015.
He claimed that the Government did not know that there was a discovery. However, the People’s Progressive Party Civic (PPP/C)’s election campaign strategy included an advertisement carried in Kaieteur News of May 8 which screamed “BREAKING NEWS…U.S. OIL GIANT EXXON STRIKES OIL IN GUYANA…”
Knowledge of this find could have been used in Guyana’s favour. However, the opportunity was forfeited and years later, officials continue to be silent on what transpired.
Similar Articles
THE BLUNT OF THE DAY
Sports
Features/Columnists
I don’t remember!
Peeping Tom… Kaieteur News- I have an uncle, Morty Finkelstein, who has the peculiar habit of remembering things with... more
CARICOM Nations Should Respond Together To new U.S. Policies
By Sir Ronald Sanders Ambassador to the US and the OAS, Sir Ronald Sanders Kaieteur News-Two Executive Orders issued by U.S.... more
Weekend Cartoon
