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Jagdeo presses accelerated oil exploration despite paucity of regulatory skills
…points to upcoming auction to have more companies exploring at the same time
Kaieteur News – Having contended that there exists, a paucity of skills in-country, as it relates to the management of the domestic oil and gas industry, including from a regulatory side, Vice President Bharrat Jagdeo, is of the view that Guyana as a country cannot await that, in order to develop its resources.
He gave the position publicly during discussion with Mr. Daniel Yergin, Vice Chairman of S&P Global where the two explored Guyana’s Rise as an Energy Power, during the CERAWeek 2023 held in Houston, Texas.
Vice President Bharrat Jagdeo (at right) during his engagement with S&P Global’s Vice President, Daniel Yergin
Dubbed “one of the biggest events on the calendar for the energy industry, with over 1,000 CEOs, policymakers, and financiers due to speak” the former Guyanese President told the S&P Official, “we will build the capacity in future years but it’s not there now, and we can’t await the development of that capacity to move the industry along.”
He qualified his position by pointing to the pace at which the industry is moving along to which is forcing the administration to keep apace on the regulatory side.
Speaking to Guyana’s carbon credentials, Vice President Jagdeo was quick to remind that even at a Net Zero target achieved in the world, oil and oil products would still be required.
According to Jagdeo, the global dissent against countries such as Guyana pursuing the development of its resources only serves to remind that there is a limited window within which the country would be able to extract the maximum benefits from its resources.
To this end, he pointed to the upcoming bid round or public auction in which there are some 14 offshore oil blocks up for offer.
Recognizing that this would be the first time in Guyana’s history, auctioning oil bocks, it has since retained the services of International Consultants HIS Markit, “to help us through this process.”
He expounded further on the 14 blocks offshore oil blocks up for offer and noted that the process is open and that any company can bid on any of them.
Jagdeo did speak to a caveat, in that any successful bidders would only be allowed to secure up to three oil blocks.
The reason, he said, was directly linked to the limited window within which the country can fully benefit from its resources and as such, “we want multiple companies exploring at the same time, we believe there is a window now.”
With the upcoming bid round on the Horizon, the former President now Vice President told the S&P official that the country is still looking to finalise a new model Production Sharing Agreement which would be beneficial to all parties.
Playing up Guyana securing a bigger take under a new PSA, he spoke of planned consultations with the oil companies in finalizing that document.
According to Jagdeo, the 1986 Petroleum Laws are also under review, since in his opinion; it is no longer fit for purpose.
He said that amendments to the law would also be subject to further consultations and was adamant; the objective is to emerge with a predictable and stable environment for potential bidders.
Addressing the importance of a stable and predicable investment environment, Jagdeo used the occasion to point to the royalty rate that was being charged by Guyana and emphasized that for decades it had not been changed.
According to Jagdeo, it was only after the gold price on the international market reached US$1,000 that this was changed, to allow for an increased royalty rate to be paid to the country should the price meet and exceed that limit and reiterated “we believe in stability.”
Despite acknowledging a paucity of skills locally, Jagdeo was adamant that this should not stymie the industry which has been pressing for the rapid approval of permits and licenses, something that has led the country to employ foreign skills.
It would be apposite to note that Jagdeo’s public sentiments comes as Esso Exploration and Production Guyana Limited (EEPGL)—ExxonMobil Guyana—and the Environmental Protection Agency activates the screening process for 35 more exploration and appraisal oil wells beginning in the third quarter of this year.
- CERAWeek, Mr. Daniel Yergin, Vice Chairman of S&P Global, Vice President, Vice President Bharrat Jagdeo
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