Jagdeo defends Granger’s 1-year extension for Exxon’s three oil blocks

Aug 25, 2023 ExxonMobil, News, Oil & Gas

Kaieteur News – Vice President, Dr. Bharrat Jagdeo confirmed on Thursday that the government did its due diligence to ensure the exploration efforts of ExxonMobil and its partners in the Stabroek Block were indeed affected by the COVID-19 pandemic, thereby warranting a one-year extension.

That extension has been the centre of a political quarrel that erupted over the last few weeks as it delays the relinquishment of 20 percent of the lucrative Stabroek Block this year to 2024. Political opposition parties had lambasted the government for allowing this to occur.

The government subsequently released three documents showing that it was former President, David Granger who granted Exxon a one-year extension due to COVID-19 impacts. Granger gave the extension almost five months after the tumultuous March 2020 General and Regional Elections.

Upon further scrutiny of those signed documents, the Alliance For Change (AFC)—which was part of a coalition with the A Partnership for National Unity— pointed out that Granger never gave an unconditional extension, but rather outlined the need for quarterly assessments to allow for adjustments. The first assessment was required in September 2020. The AFC on Wednesday called for Jagdeo to provide evidence that this was done after the People’s Progressive Party assumed office.

Vice President, Dr. Bharrat Jagdeo

At his press conference on Thursday at Freedom House, the Vice President said, “Exxon brought in information and gave a full report to the Ministry [of Natural Resources] on how their original [exploration] plan was affected from six rigs down to four because two could not be mobilized.

“So they demonstrated how COVID affected them. It is the David Granger extension that therefore shifted the timeline to relinquish 20 percent of the block from 2023 to 2024 and that is the consequence we are living with.”

With respect to the Opposition’s call for reports of such due diligence to be made public, the Vice President said there is no need for the government to do this. “This is a diversion. They got caught with their pants down…we don’t have to give evidence to AFC,” the official said.

The chief policymaker was also not inclined to make government’s reports on this matter public to ease tensions of other stakeholders. He said the fact of the matter is that an extension was granted and the government did not extend it.

Furthermore, the Vice President questioned why Granger prioritized such an extension, especially at a time when the country was fighting to maintain its democratic credentials after suffering a historic five-month delay due to a number of legal battles over the verification of certain regional votes.

Jagdeo said, “The Opposition should ask Granger for an explanation on this. I don’t disagree with the contents of the letter. I am not going to run him down for that. But he didn’t need to do that. The current government could have done that…”

The Stabroek Block which spans 6.6 million acres and holds over 33 oil discoveries is so massive that it is equivalent to 600 oil blocks offshore Guyana. Exxon and its partners which include Hess Corporation and CNOOC Petroleum Guyana Limited are expected to give up 20 percent of the block this next year which could then be used as part of an auction to garner more funds for the country.

Exxon has to date received government approvals for five oil projects worth over US$40b and is streamlining project documents for a sixth. Guyana, considered to be the fastest growing economy in the world, is targeting oil production to surpass over 1.2 million barrels by 2027.