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Payara licence could have been better but Govt. was under “enormous pressure” – Jagdeo
By Shikema Dey
Kaieteur News- Guyana was warned by a host of oil experts and good governance advocates to not rush the approval of Payara, ExxonMobil’s third field development project in the Stabroek Block.
Considering the fact that Guyana was handed a bad deal when it penned the Stabroek Block agreement with ExxonMobil, CNOOC/NEXEN and Hess, exper
ts had advised too that the Payara permit should be leveraged to acquire more favourable terms for the country.
But these warnings fell on deaf ears and the project was given the green light in September 2020 by the newly installed People’s Progressive Party Civic (PPP/C) Government for its intended 2024 start-up.
In the weeks leading up to its approval, ExxonMobil’s Senior Vice President, Neil Chapman during the company’s second quarter earnings call had in simple terms issued an ultimatum to Government to – “grant us approval soon or risk value significant value loss.”
He had said that, “what we continue to stress to the Government is that if the project does get delayed, it’s a loss of value to the country.”
Now, months later, Vice President (VP) and local oil boss, Dr. Bharrat Jagdeo has publicly admitted that it was because of that very reason, Government forged ahead so quickly with Payara’s approval.
The VP was at the time appearing on a GlobeSpan24x7 virtual discussion on oil and gas contracts.
Vice President, Dr. Bharrat Jagdeo
He said, “You recall we had a really short period in which to really wet our feet in this regard. ExxonMobil had wanted it by August 18 and we got into office on August 2 and they said if we do not get it done by that time, we would lose the US$9 billion investment and we said no, no, hold on a minute, we have to do this right.”
“We took a month and a half to make sure that we address the issues through a large amount of consultations. We also hired someone to review the work that was done and we strengthened the draft fundamentally that was before us. So we were under enormous pressure, nevertheless, we managed to improve the Payara license over the Liza fundamentally,” he continued.
Alison Redford, the Former Alberta Premier was who Government had hired to review the Payara Field Development Plan (FDP). However, her involvement quickly led to questions about her credibility.
Former Alberta Premier, Alison Redford. (Stuart Gradon/Postmedia News/Files)
Kaieteur News had reported that Redford had benefitted from thousands of dollars in donations made to her political party by an ExxonMobil subsidiary called Imperial Oil, a petroleum company operating in Canada, majority owned, about 70 percent, by the US oil company.
While she benefitted from Imperial’s money – ultimately Exxon’s money – another scandal plagued Redford’s political career. She drew widespread public controversy in Canada when it was discovered that, during her attendance of the funeral of Nelson Mandela, the State footed the CAD$45,000 cost of her trip, including about CAD$10,000 for a privately char
Former Alberta Premier, Alison Redford. (Stuart Gradon/Postmedia News/Files)
tered return flight from South Africa.
Redford reportedly refused several calls to repay the money spent for the South Africa trip, but eventually bowed to pressure in 2014 and delivered the funds back to the public purse, with a public apology. Her resignation quickly followed.
Additionally, nothing could be said of Redford’s years of experience, if any in reviewing field development plans. The foregoing factors had cast a shadow of doubt on the integrity of Redford’s work on Payara, which was approved in less than two months.
The timeframe of Redford’s review was also called into question as industry experts noted that proper reviews take years and require a full-fledged team to be completed. Her review however, remains hidden months after Government had promised to make its content public.
Nonetheless, Government remains proud of its handling of Payara. In fact, Dr. Jagdeo during his latest interview said that the Payara permit is closer to international standards than the Liza One and Two permits approved by the then David Granger led administration.
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