Feasibility studies

Aug 23, 2023 Editorial

Kaieteur News – ExxonMobil has Guyana in an iron grip, and most citizens are only becoming aware of how much this is so in bits and pieces. Information about pivotal aspects of the nation’s oil wealth has been limited at best, mostly sparse and difficult to comprehend, when there is a new development. The latest such development is that ExxonMobil has conducted the related feasibility studies for the five oil projects that Guyana has approved.

It is in the company’s interest to do such studies. This determines, among other things, the technical difficulties, the possible pressure risks, the full cost of a project, and how much of a return to factor-in to its pricing, so that the company’s efforts are profitable. In answer to a question about what Guyana has done when ExxonMobil’s feasibility studies are shared, the PPP/C Government’s leading oil voice, Vice President Jagdeo, said that “What we did, we hire practitioners, and people specific to the industry.” In addition, Jagdeo said that “we do an internal review, and then we have other external specialists who review these documents.”

On the face of it, this is helpful and encouraging. Nevertheless, Jagdeo’s response raises other questions, which we think are fair and reasonable. Regarding this “internal review” that is done locally, who are the people doing this? Since, it is widely known that Guyana is severely lacking in the required skills, technologies, and overall capacity to oversee many crucial areas of this oil sector, how is it that this country is now capable of doing what Jagdeo describes as “internal reviews?” In other words, where did these people come from, and do they have what is required for a credible review job involving feasibility studies? Do they even know where to begin? Or is this one of Jagdeo’s usual figures of speech that gives something to grasp at, but which means next to nothing, and under the pretense of an “internal review?”

Capacity is the one thing, perhaps the only one that the PPP/C Government has not pushed into some far, dark corner. It has been truthful enough to admit that Guyana suffers from a most severe deficit. Yet there is this grand pronouncement that Guyana is conducting “internal reviews” of what ExxonMobil has done. Something does not feel right or sits right, with this. Further, there was the even more comforting assurance from the Vice President that after the internal reviews are completed, then there is the additional layer of scrutiny in the form of “other external specialists who review these [feasibility] documents.”

This is good, and under normal circumstances would be the end of concerns about feasibility studies, or similar components in the oil sector. However, this is a Government of Guyana and a Vice President in charge of oil and, sad to say, neither has given Guyanese much confidence in how this massive oil wealth is being stewarded. The reality is that the PPP/C Government’s management of the oil patrimony has been riddled with mysteries, surprises, and secrecies. Internal reviews definitely belong in the realm of surprise and mystery, given who we have, given what we know. Very few things about this oil, if any at all, has been open and straight since oil has been found here. This is not the monopoly of the PPP/C Government, but was also embedded in quite a few oil developments when the APNU+AFC Coalition Government was in charge.

One of the baffling developments with this oil is how time has been compressed to suit the crafty visions of both ExxonMobil and operators in the PPP/C Government. For one, Guyanese are reminded of the less and lesser times in which oil studies were completed, which raised many eyebrows, as to what was actually done, and how anything of quality and credibility could be forthcoming, in such a short space of time. The concern was whether Guyana was really getting the genuine article in the studies claimed to be done.

Considering his track record with candidness, one never knows how to take what is given by Jagdeo. It would be to Guyana’s advantage if both “internal reviews” and “external specialists” did justice by citizens relative to ExxonMobil’s feasibility studies. We are not so sure.

Discover more from Kaieteur News

Subscribe to get the latest posts sent to your email.

Editorial, ExxonMobil, Guyana, Jagdeo, oil

Latest News