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- Guyana received US$5.4B in royalty, profits from 500M barrels pumped to date
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Govt. missed opportunity to secure more before renewing Liza 1 Permit – Aubrey Norton
Kaieteur News – The Government of Guyana has missed an opportunity, in keeping with the law, to secure better terms for its people, by failing to exploit the renewal of the Liza One Permit.
This is according to the Leader of the Opposition, Aubrey Norton, who during a press conference on Tuesday, said the most recent move by the People’s Progressive Party (PPP) government exposes its ineptitude.
Opposition Leader, Aubrey Norton during his weekly press conference
He was at the time responding to a query from this newspaper and noted that the government had the opportunity, in keeping with the law, to revisit it and get a better deal for the people of Guyana.
According to Norton, “the opportunity was provided that it be done within the law and the opportunity should have been taken. Unfortunately, the government didn’t take it and the Guyanese people will suffer because of government’s inaction on a matter in which conditions conducive to dealing with the issue existed but the government did not utilise it.”
Norton concluded, “I have no doubt that the failure to do that is clearly a case of the government’s ineptitude, their incompetence, among other things.”
The Leader of the Opposition was also keen to note that while he believes in the sanctity of contracts, the Liza One Permit could have been used to rake in a better deal, without touching the Production Sharing Agreement (PSA) government signed in 2016 with the oil company.
The Liza One Permit, the first project to be approved for Esso Exploration and Production Guyana Limited (EEPGL)—ExxonMobil Guyana—was renewed after expiring on May 31. The Liza 1 Oil field in the Stabroek Block first began pumping oil in December 2019 after hydrocarbons were found in commercial quantities in 2015. The field is being produced using a Floating Production Storage and Offloading (FPSO) Vessel—the Liza Destiny—with an installed capacity of 120,000 barrels per day.
International experts had been lobbying the Environmental Protection Agency (EPA) to not renew the permit until a better deal is forged for Guyana. For instance, International Lawyer Melinda Janki had recommended that a new Environmental Impact Assessment (EIA) be conducted based in part on the fact that Guyana does have very strong laws in relation to EIAs. She lamented, however, “…those laws are not being implemented or enforced.”
The international lawyer had argued that the Liza I Permit should not be renewed, as the operations pose grave harm to the environment. She had also referenced the miniscule “gains” from the company’s current operations, which far outweighs the damage being caused in the same process.
Tom Sanzillo, Director of Financial Analysis for the Institute for Energy Economics and Financial Analysis (IEEFA), during the recent webinar, had also suggested that the EPA use the Liza 1 permit renewal as leverage to address the numerous shortcomings in the oil contract signed with ExxonMobil in 2016.
Notwithstanding the experts’ advice, the permit was renewed with a few changes underscored.
According to the EPA’s statement, the key provisions that were made to the permit are as follows: flaring, financial assurance, monitoring and grievance mechanism.
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