Oil confab failed to address lopsided Exxon deal

Feb 24, 2022 News

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– Article 13 knocks event as a “feel-good” conference

Kaieteur News – Pro-Governance group Article 13 said the just concluded International Energy Conference held here was nothing but a “feel-good” conference that failed to address critical issues such as the deficiencies in the Production Sharing Agreement, and the Regulatory Framework.
The group said that the foreigners who dominated the conference “must have left Guyana with the impression that there was total national consensus on all things oil, and that Guyana was heading to become the Dubai of the Caribbean. They could not be more wrong.” “The Exxon Petroleum Agreement, the sector’s regulatory framework, the country’s environmental capacity and oversight, the mega-projects, and steps in place to prevent the Dutch Disease and the more damaging resource curse, are issues which the Government seems willing to leave to chance or treat as low priority,” the civil society organisation said.
Article 13 said while the conference saw presentations and participation of three foreign Heads of State and a host of foreign speakers – including Exxon’s Chairman and CEO, Darren Woods, the absence of the parliamentary opposition and civil society representatives on the panels has not gone unnoticed. “The absence at the higher level of Trinidad, with their century of experience in the oil and gas sector, could not escape attention,” posited Article 13.
In light of the exclusions and the burning issues to be addressed, Article 13 called on the Government to have a domestic version of the conference but in the form of a consultation.
“It is entirely unacceptable that Guyanese had to learn from a prohibitively priced international conference, an additional trickle of information on the Government’s Gas-to-Shore and Amaila Falls Hydro projects. Article 13 is not satisfied that the Gas-to-Shore project is consistent with the Petroleum Agreement, but is satisfied that the announcement that the arrangements for the cost of building the pipeline will be treated as recoverable from oil proceeds is evidence that the Government does not take ring-fencing very seriously,” it said.
Article 13 also expressed dissatisfaction with the decision of Government to pursue the Amaila Falls Hydropower Project with all its costly risks, noting that the awarding too of the construction contract without simultaneously entering a Power Purchase Agreement is putting the cart before the horse.
“We are satisfied too that a price being bandied about by Mr. Winston Brassington does not include all the costs and that Guyana and the Guyana Power & Light Inc. will be incurring significant additional costs, other than the nominal price tag,” it said.
It was pointed out that Ethiopia, two days ago, opened a 5,000 MW hydro project at a cost ofUS$4,200M or US$840,000 per MW. Guyana is expected to pay US$750 million for 165 MW, a unit cost of US$4.5 million per MW, or 5.3 times that of Ethiopia.
“Let us look at this another way. At a BOOT price of US$750 million, the operator will have to recover some US$37.5 million per annum, exclusive of any interest, operating cost and profits. And of course, the deal will be sweetened by the full range of tax concessions, including a 20-year tax holiday on income, property, withholding and quite possibly employee taxes as well. And whether we utilise the power or not, we will have to pay for every unit produced,” it reasoned.
The expo was meant to showcase Guyana to the world, but the majority of the firms that participated were foreign-based and was instead exhibiting their products and services to Guyanese. The expo, which came shortly after Guyana passed its ambitious Local Content Policy Legislation, did little to promote local content, although Guyanese leaders at the conference stressed that whatever investments are derived from the oil and gas sector, local content must be catered to.
Reporters were told at the launch of the event that 150 businesses would be part of the Expo. Unfortunately, only 40 of the spots were occupied by local businesses. Weighing in on the unfortunate manner in which the expo was executed, was Attorney-at-Law and founding member of civil society organization Article 13, Mr. Christopher Ram who told this newspaper that it was regrettable that locals did not play a greater role in the Expo, held in Guyana. He was keen to distinguish between the hosting of the event and venue of the event, as he explained that while the International Energy Conference and Expo was hosted in Guyana, it is still unclear as to who exactly the host or organisers were.
Ram clarified, “To say that Guyana hosted it begs the question of who in Guyana actually hosted it (and) no one is quite sure. Clearly, the government had a big hand in it, but it’s not sure whether the prohibitively high cost to participate to exhibit one’s goods and wares… It is unclear who set those figures and I would hope it’s not the government because it was clearly prohibitive… Many (many) people could not afford it and I don’t think there was a lack of interest (by locals), it’s just that it was very high priced.”
As a delegate of the event, the Attorney said the cost per booth was approximately $650,000. The activist further explained that he believes the event was not properly marketed by the government to the Guyanese people, as many patrons viewed the Conference and Expo as a mere “talk shop”. “People could have felt like this is worth attending (but) that didn’t happen.” In this regard, Ram said, “It is regrettable that we didn’t have higher level of (local) participation”.
Held at the Marriott Hotel between February 15 and 18, Natural Resources Minister, Vickram Bharrat hailed the event a success. Bharrat, during a panel discussion on the final day of the public sessions, told the conference that over 800 delegates participated from more than 25 different countries, while more than 120 businesses, both local and foreign, seized the opportunity to market their products and services on the international stage. This newspaper spoke to a few of the foreign companies seeking to showcase their products and expertise to help Guyana reach its developmental goals in not only the oil industry, but even its agriculture sector. Guyanese were not shy to display their skills and products either as the exhibition saw the inclusion of local arts and craft as well as services on display.

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