ExxonMobil should be barred from oil blocks auction - AFC

ExxonMobil should be barred from oil blocks auction – AFC

Aug 29, 2022 News

…says locals should take limelight

Kaieteur News – Already enjoying the richness of Guyana’s 6.6 million acre Stabroek oil block, the Alliance for Change (AFC) believes that US oil major, ExxonMobil should not be allowed to participate in the year end auction of the remaining blocks.

Shadow Oil and Gas Minister, David Patterson

The party made its position clear on Friday during a Press Conference. Former Public Infrastructure Minister, David Patterson, who serves as the Opposition’s Spokesperson on oil and gas related matters in the National Assembly, was asked to weigh in on the matter when he said Guyanese should be enjoying Guyana’s wealth, rather than foreign companies. In fact, he argued that the Local Content Legislation was crafted specifically with this goal at heart.

Patterson believes that not only should Guyanese be allowed to participate, but should also be the winning bidder of the prospective oil blocks, considering the fact that locals will have enough time to boost their human resource capacity and financial strength.

He said, “Actually I would go further to think that if it does happen, the successful company (should be) Guyanese based because the reality is whenever the auction, if it does happen…the time between exploration and production that can be about five to 10 years, that’s more than enough time for Guyanese to build their capacity and more than enough time for them to get financing locally and internationally to be able to productively use the block.”

Drawing Exxon into the picture, the Shadow Oil and Gas Minister said he believes Exxon already holds more of Guyana’s wealth than it should. He went on to acknowledge the oil giant’s experience in the sector, noting that if ExxonMobil wishes to participate it should play a partner role and lend its expertise to the local business.

“There is nothing wrong with Exxon partnering afterwards if they want to lend their expertise to a local company but I don’t think that it is advantageous for us to have more than 50 or 60 percent of our oil fields controlled by one particular company,” Patterson noted. He went on to explain that when the Coalition was in Government, efforts were being made to diversify ownership of the oil blocks. This means including various companies from different countries “so that no one country or no one company has overly undue influence on the country,” the Member of Parliament pointed out.

He believes, “if we have several different players there, obviously each of them have their own stake but I think that how Exxon has more than enough at the moment. I do think that some of their blocks will be coming up for relinquishment because obviously they may not be able to explore them all at the same time so I don’t think our competing will not be detrimental to them in any way.”

Vice President Bharrat Jagdeo, who has been calling the shots in the budding sector, recently said he is not opposed to the idea of locals participating in the upcoming auction of the oil blocks. During his most Press Conference, the VP said the involvement of locals is a very important point for the State to consider.

If the auction is open to Guyanese, Jagdeo said he anticipates criticism that the Government is allowing a few people to enrich themselves. If locals are excluded, the Vice President said there could be concerns that Guyanese are not being given the opportunity to grow their knowledge in terms of being leaders in the upstream industry. Meanwhile, foreign entities are being allowed to exploit the resources. He said a debate on the pros and cons of Guyanese participation would be of particular interest.

Should locals be involved in the auction, he said there would have to be an examination of how to avoid the blocks landing in the hands of Exxon and other players since the intention of the bid round is to also avoid more concentration of the nation’s offshore assets with those companies.

His personal position is that a consortium of Guyanese could be given a chance to prove that they can get the capital, give the country better fiscal terms, and make a profit for themselves. As to the timeline for the auction, he said this has been moved from the September deadline to year end, as they are a number of matters that are still under consideration. The Vice President said, “We have all of the areas potentially that we are gonna put out to auction. We have 3D seismic for some areas; we have 2D seismic for some areas and we have no data for some areas. Before the end of August, we have to make a determination on whether we will pursue the strategic partnership idea or whether we will put out everything to auction or do a combination of both. Also, we have to decide on the blocks – how we want to split these potential areas and what size these blocks should be so we are going to get technical advice on that.”

Government is yet to determine whether existing oil companies in Guyana, particularly ExxonMobil, will be allowed to participate in the auction and if so, whether there will be a limit to the number of blocks one person could have or not.