Opposition never requested well data to make ring-fencing decision - Jagdeo

Opposition never requested well data to make ring-fencing decision – Jagdeo

Mar 08, 2024 ExxonMobil, News, Oil & Gas

Kaieteur News – Despite pointing to the need for “well data” to determine the viability of ring-fencing the Stabroek Block projects, the Opposition has never made any request for information, Vice President Bharrat Jagdeo said on Thursday.

Opposition spokesperson on Oil and Gas, Elson Low

During his weekly press conference the VP asked, “So the well data, how does it relate to ring-fencing?” He nevertheless committed that government would provide the information needed by the Opposition if it was not proprietary. Opposition spokesperson on Oil and Gas, Elson Low had previously stated that the opposition needed this information to determine whether it would support the calls for ring-fencing of the Stabroek Block projects. When told about this on Thursday Jagdeo said: “You can put him in the center of the data room, in fact and it would be a great thing to have him look at it but whatever is public we will give it to him, if he wants it, and let’s see how he will come up with this model for ring-fencing,” the former President said.

Earlier on Thursday Low during the Leader of the Opposition’s press conference said the political group still needed data to determine the viability of ring-fencing the projects in the Stabroek Block. A ring-fencing provision would ensure that each oil project pays for itself. It would also enable Guyana to receive 50% of all the revenue generated after ExxonMobil’s investments have been repaid.

Former Executive Director of the Environmental Protection Agency (EPA), Dr. Vincent Adams had said government was gambling the country’s oil profits by refusing the ring-fence the projects, since oil prices can potentially take a steep dive in the future as the demand for fossil fuel reduces owing to the transition to cleaner energy. Low in an invited comment by this publication said that while he would not use the term “gambling” it is true that the operator is maximizing profits from the block.

He said, “I wouldn’t use the term gambling, but rather what I would say is, of course we believe that the operator is profit maximizing. It is looking to ensure that their business is run efficiently so we would anticipate they will be looking to invest based on, looking to secure profits for themselves, of course Guyana will be able to access profits as well from additional oil lifts.”

Low added that for the Opposition to make a concrete decision on ring-fencing the projects, it would require a greater understanding of the wells that can only be determined with data on the wells. “In order for us to have a more precise understanding of these investments in terms of additional fields, we would need data, more data on the fields themselves and we will need to review that with expert advice so that will give us a good sense of the direction of travel and the nature of additional investments in the Stabroek field so as we have previously said, when in office we will be looking closely at that data and we will ensure that we have a clear understanding of that regarding any future projects and the approval of projects and the approval of the pace of projects,” he said.

According to him, this was important since each project cost varies and the Opposition does not want to “dissuade investments.” When asked whether the Opposition agrees that the country can receive fewer profits in the future from lower oil prices, Low said this was a concern for all oil producing states.

“That is definitely a concern that every oil country will face however really in Guyana what we look at is the long term oil price. It is important that we understand that the long term oil price is not a price that oil will be every single day but it is an average and so what has been recently talked about is $65 a barrel being the long term oil price…that is one of the factors that will determine the viability of investments and the return on investments so while yes, there could be a decline in the price of oil, it is really about an average number when we look at it,” he said.

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Data, oil, opposition, ring-fencing, well

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