Exxon keeps racking up multi-billion $$$ bills but country continues to have no say

Exxon keeps racking up multi-billion $$$ bills but country continues to have no say – fmr Finance Minister

Jul 24, 2022 News

Guyana on dangerous footing…

By Kiana Wilburg

Kaieteur News – ExxonMobil’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL) is moving at “lightning speed” with its exploration and development programme in the Stabroek Block. In fact, plans are already at an advanced stage for its Yellowtail Project, the fourth to be developed offshore to produce 925 million barrels of oil in a 20 year timeframe.

Former Finance Minister, Winston Jordan

Just recently, one of its prime contractors, SBM Offshore, disclosed that it secured financing to the tune of US$1.75B from a consortium of 15 banks to build Guyana’s largest oil ship called One Guyana which will operate in the Yellowtail Project. But the most critical question that all citizens should ask is, “What say did we have in all of this since it is the country that will ultimately be handed this bill?”

This very question is what former Finance Minister, Winston Jordan says needs to be addressed with a sense of urgency. During an exclusive interview with Kaieteur News, Jordan said it is imperative that Guyana has a say to ensure it is not being cheated on these costs and that the most economical approach is being taken.

The former Finance Minister said, “These people, SBM went out and got a consortium of banks to put together a loan of US$1.7B for the One Guyana vessel that will service the US$10B Yellowtail Project. Now that bill is going to be put to us, that is a bill Guyana has to pay. Yet, Guyana has no one tracking the expenditure, no one that was involved at this preliminary stage in the putting together of the financing but that bill will come to the government as part of the expenditure to be recovered from Yellowtail.”

He added, “Nowhere along the chain do we have a Government of Guyana representative to intervene. So we are just being presented with massive bills, just bills upon bills and we don’t know how Exxon is accounting for these expenses through these one million barrel takes (from the Liza Phase One and Liza Phase Two Projects). We don’t know what costs would end up being carried over to other projects. We are barely being told by Exxon certain things but otherwise we are in the dark.”

The economist is of the view that a continuation of such practice, especially since Exxon has indicated that 10 more oil ships are expected, only puts Guyana on dangerous footing.

It was only three days ago that SBM, the Dutch shipbuilder for Guyana’s floating, Production, storage and offloading vessels (FPSOs) said it expects to draw the US$1.75B loan in full, phased over the construction period of the One Guyana FPSO.

The Dutch firm said the financing will become non-recourse once the FPSO is completed and the pre-completion guarantee has been released. Non-recourse financing, for those who may not be aware, is a type of commercial loan requiring only repayment based upon proceeds generated from the project.

Kaieteur News understands that the FPSO will be designed to produce approximately 250,000 barrels of oil per day, will have associated gas treatment capacity of 450 million cubic feet per day and water injection capacity of 300,000 barrels per day.

Additionally, the FPSO will be spread moored in water depth of about 1,800 metres and will be able to store around two million barrels of crude oil.

In the Stabroek Block, EEPGL is the operator and holds a 45 percent interest in the Stabroek Block.

Meanwhile, Hess Guyana Exploration Ltd. holds a 30 percent interest and CNOOC Petroleum Guyana Limited, a wholly-owned subsidiary of CNOOC Limited, holds a 25 percent interest.

To date, the partners have discovered 11 billion oil-equivalent barrels. The company anticipates up to 10 projects on the Stabroek Block to develop this resource.