Guyanese in for a “rocky road” with Govt. poor handling of oil industry

Jan 26, 2023 News

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…Opposition urges greater vigilance by citizens, scrutiny of gas-to-energy project 

Kaieteur News – Warning that the Government’s secretive nature in running the oil industry places Guyanese in great danger, Opposition Member of Parliament (MP), Shurwayne Holder has called on citizens to be more vigilant in helping to police the sector as well as the ambitious US$2B gas-to-energy project the administration has embarked on.

Holder made the points during his contributions to the ongoing budget debates on Tuesday. Questions continue to swirl about the financial feasibility of the project, which Government has largely ignored. There has been no press conference to address several outstanding issues about the project, even as the Irfaan Ali administration has refused to conduct a feasibility study to determine the economics of the venture.

Government said the venture will lower electricity costs by 50 percent, however independent analysts have said this may not be possible due to the increased price tag of the project. The Wales GTE project entails three components inclusive of the pipeline, a Natural Gas Liquids (NGL) facility to treat and separate the gas and a power plant to generate 300 megawatts of electricity. Exxon’s pipeline so far is expected to cost US$1.3 billion, while the other two aspects are now pegged at US$759M.

In addition, Guyanese remain in the dark regarding key aspects of the controversial initiative, in clear violation of the nation’s laws. Each application made to the Environmental Protection Agency (EPA) seeking Environmental Authorization or a Permit to start up a project must be shared with the public as per the Environmental Protection Act. Part VII of the Law, that speaks directly to ‘Investigations, Prosecutions, Civil Proceedings’ makes it pellucid at Section 36 (1) that “It shall be the duty of the Agency to maintain, open to the public, registers containing particulars of- (a) each application for an environmental authorization made to the agency, including the name and address of the person making the application, and the location at which any activity is proposed to be or is undertaken pursuant to the environmental authorization.”

Holder reminded the House that it was under the Coalition Government that an initial feasibility study to assess the value of a pipeline and its best potential location was done. He said once they got into Government, they tore up the recommendations of that study, situating the pipeline at Wales, which he said will cost the country at least an extra $100 million USD, because it is far from the most ideal location. “If that weren’t bad enough, they have refused to conduct an updated feasibility study, even though the cost of the pipeline has tripled since that study was conducted. In what world does a major infrastructure project triple in cost and a Government proceeds without urgent reassessment?”

As such, Holder asserted that it is clear that the ruling People Progressive Party/Civic (PPPC) is not interested in sober decision-making and thoughtful planning. The Opposition MP posited that the ruling party prefers chaos because in confusion there can be secrecy.  He asserted: “there are so many secrets in the Gas to Energy project that it’s hard to keep track.” To this end, the Opposition MP asked, “What is the unit cost of the gas the pipeline will supply Guyana?  Where is the agreement between the Government of Guyana and ExxonMobil for the construction of this pipeline? What is the final cost of this pipeline and what provisions are in place to address any cost overruns?”

He further contended: “it would seem to me to be utterly crazy to invest over $2 billion USD in any project without basic questions like these being answered.” On that note, he said that these questions needed to be asked.

“I understand Mr. Speaker that a contract for consultancy services has been signed between Engineers India Limited and Guyana Power and Gas Inc., but what is “Guyana Power and Gas Inc.? If this company is intended to operate the plant why has Guyana Power and Light been bypassed? In fact, what is the scope of this new company’s powers?”

Besides, Holder noted that the biggest act of “eye pass” to date is the Government’s claim that it intends to finance a stake in the gas to shore pipeline directly from cost oil. He said “Mr. Speaker this arrangement bypasses the very House we stand in, rendering the National Assembly irrelevant when the Government seeks to finance major infrastructure projects.  The Public Procurement Commission, Auditor General, and Public Accounts Committee are all sidelined in this arrangement. The Government is violating the Guyanese Constitution and the Fiscal Management and Accountability Act of Guyana in a casual, cold, malicious way.”

Fear

Holder said the PPP has turned a bumper year for oil revenues into one of fear about the management of the oil industry.  The MP believes that the issues now allow Guyanese to understand the PPP/C’s shady tactics and disdain for transparency and accountability. “Guyanese are starting to understand that they are in for a rocky road when it comes to the oil industry, that nothing can be taken for granted and that constant vigilance will be a necessity.”

Exxon expenses

He added that “Even basic things, like auditing Exxon’s cost-oil expenses, became the source of public outrage and concern. Recall that the PPP allowed the audit window for over $7billion USD of cost oil expenses to lapse, so clueless were they about the proper management of an oil and gas industry.”

On the other hand, Holder noted that the Government has refused to enforce the requirement for full coverage insurance that ExxonMobil has signed onto in Guyana’s development permits; raising the spectre of an unmitigated disaster should there be a major oil spill. He said: “we saw Guyana’s first oil spill last year as well, and no report on it has been publicly ventilated so the nation better understand the risks it faces. These are the types of concerns that keep vigilant citizens awake at night. We know that oil is a tricky man to manage and have seen many nations fall foul of poor governance in the sector.”

He asked “Will 2023 bring more of the same?”

“Sadly,” he said this is likely to be the case as the PPP is still to make public the new model Production Sharing Agreement.”  “Already, they have started the year off on the wrong foot. There is still time for the PPP to get its act together in the interest of all Guyanese. We urge them to put their country first,” he added.

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• Gas-to-Energy project, Opposition Member of Parliament (MP), People Progressive Party/Civic (PPPC), Shurwayne Holde, Wales GTE project

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