Is China making a pitch for our oil blocks?

Oct 25, 2022 Features / Columnists, Peeping Tom

Kaieteur News – The government has sprung a major surprise on the nation. However, it is better for it to be a surprise than a scam.

All along the government was claiming that by the end of September, it would decide whether it would auction available oil blocks or establish a national oil company. No one ever took the government seriously in relation to the latter because the government is struggling to find the human resources to manage the oil and gas sector effectively much less to establish a national oil company.

It was generally felt that the government would opt for auctions. But this ran the risk of the government having to give the available oil blocks to the highest or most competitive bidder. That was always going to be a difficult proposition for a government which has been mired in controversies surrounding the handing-out of the Kaieteur and Canje blocks.

This newspaper has written extensive reports and commentaries on the give-away of the Canje and Kaieteur Blocks. The government avoids this issue like the plague. The deadline for deciding whether to auction the blocks has passed. It was eventually hinted that the blocks may be put up for auction but nothing definitive has been forthcoming. But it was indicated in one section of the media that the government was setting fiscal terms for future oil deals and would soon commence auction for oil blocks.

Then there emerged the bombshell announcement. The government will be setting aside some oil blocks for government-to-government deals. The PPP never fails to astonish and amaze this country with its ingenuity. This one takes the cake. When everyone was waiting expectantly for the auction of the oil blocks, there comes this surprising announcement that the government is moving towards reserving oil blocks for bilateral pacts. Is the Guyana government setting aside the oil blocks for government-to-government deals or it is being set aside for friends of the PPPC?

The government should explain itself before it finds itself being accused of being up to its old tricks. It should set the record straight as to why it has opted to go this unheard of route. Setting aside oil blocks for bilateral pacts is not well-known in oil economics. The PPPC has outdone itself with this one. Just which country does the PPPC have in mind for bilateral oil deals?

The oil business is dominated by private multinationals. So which country does the PPPC have in mind to enter into an oil deal: Saudi Arabia, Iran, China or Brazil?

Why would the Saudi’s be interested in a government-to-government oil deal? They have no reason to be interested. They are the second largest oil producer in the world. Saudi Arabia produces more than 10 million barrels of crude per day and has extensive reserves. They do not need Guyana’s oil.

Iran and China are tied to Venezuela which has the largest reserves in the world. They are not going to jeopardize the investments in Venezuela to come to Guyana. Brazil is seeking investors for its own oil. But it may be willing to partner with Guyana. No reports however have suggested that Brazil is looking for developing Guyana’s oil blocks. The United Arab Emirates, Mexico and Angola, Ghana and Colombia are not also likely to be interested in such partnerships.

The oil companies in the UK are privately owned. But there has been a suggestion that the Guyana may be setting aside oil blocks for one or more of Britain’s oil companies. There has been speculation that the recent decision of the UK government to offer visa- free entry to Guyanese was part of barter deal (visa-free travel for oil blocks) between the two countries. It is in order to either end or confirm such speculation that the government of Guyana should be more forthcoming on just why it has made this surprising and seemingly novel decision to set aside oil blocks for bilateral pacts. Just which country does it have in mind?

Surely, it could not be the government woke up one day and had a brainwave that some foreign government may one day be interested in entering into a deal over oil blocks? Stranger things have happened but it is not likely that the PPPC had such a premonition. Time will in the end reveal whether indeed the PPPC is reserving the oil blocks for bilateral pacts or for its friends.

(The views expressed in this article are those of the writer and not this newspaper.)

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Is China making a pitch for our oil blocks?

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