Hiding our oil figures

Mar 19, 2024 Editorial

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Kaieteur News – On Sunday we reported the Office of the Leader of the Opposition calling for the release of the updated Stabroek Block reserves, following the announcement by ExxonMobil of another discovery on Friday last. Since April 2022, Exxon has not provided the country with an update on the estimated resources discovered in the prolific Stabroek Block. When it reported on its latest oil find last Friday, Exxon said nothing on how this increased the country’s total recoverable resources, from its last estimate of 11 billion barrels- some eight discoveries ago.

Saying that it supports calls for the nation to be updated on the amount of discovered oil reserves, the opposition also said it believes it is disrespectful that the country is being kept in the dark. It said: “Regardless whether it is the company that is keeping the government in the dark or whether it is the government keeping the people in the dark, the lack of transparency is totally disrespectful and unacceptable. The natural resources of Guyana belong to the people of Guyana. In the Preamble of our Constitution, we have declared our commitment “to protect our natural environment and endowment. Citizens are impeded in performing this duty if vital information on their oil resources is denied them.”

What the opposition should know is that Guyana is tailor-made for any level of exploitation. The eyes of Guyanese are open wide, but there is the considerable likelihood that they are still blind to what is happening. When the issue is about oil reserves, we are helpless. We are lost, and we don’t know what we don’t know, which makes this country ripe for exploitation, any foreign oil companies’ calculation.

How many proven barrels of oil reserves do we really have as of today?  How much has the Exxon-led consortium discovered, but of which Guyana only knows a portion, as told to this nation?  How much more do the seismic studies indicate could be present, but which are still secrets to the Guyanese people?  We have been informed about 11 billion barrels of oil equivalents, with more projects approved and being lined up for production. But an earlier question is now refined: is 11 billion barrels the total discoveries resulting from ExxonMobil’s sophisticated, race against the clock, efforts?

The reality is that Guyana has no way to know, other than what ExxonMobil sees fit to share with the government. We do not have the people, nor the systems, to reconcile what ExxonMobil puts before us, versus what could be the real oil picture almost 200 kilometers from shore. We have neither boats, nor the skills, nor trusted people of our own, to look into what is shared with us, and how complete it is. Quite frankly, it is clear that there is an absence of leadership will and interest in knowing how much we have as proven reserves. For what is received from oil company partners is what is swallowed wholesale, as if some divine force itself had said so.

To reinforce this point just recently ExxonMobil had said the company is no longer focused on providing updates on the number of barrels added to its resource base, but on monetizing those resources and when this country’s chief policy maker for the sector, Vice President Bharrat Jagdeo was asked about this he said he had agreed with the company’s position to hide the new discovery figures from the public. During a press conference at Office of the President, the Vice President said the question of Exxon’s update of the resources is not as serious an issue as it is being made out to be by some industry stakeholders. He said Exxon’s announcement, or lack thereof, will not change the fact that there is a discovery already there for the benefit of the country. “It’s just a matter of timing when we increase our reserves or not…In fact, they (Exxon) have a greater kind of need to do that because globally… they look at your reserve and that helps to move stock prices for Exxon but they’ve decided that they want to focus more on appraisals as to how many barrels are in these discoveries, etc,” said the Vice President. Overall, he said Exxon’s move to focus on monetizing the discovered resources is a logical step.

Standard & Poor’s (S&P) Global last year arrived at a place that is sure to discomfort ExxonMobil, and its partners. According to S&P’s Patrick Harrington, the numbers are “much bigger than that 11 billion barrels”, and that Guyana’s proven reserves could be at least double what has been making the rounds here. In numbers, it is not 11 billion barrels of oil, but starting (at least) at 22 billion barrels of oil. S&P noted the oil reservoirs in nearby Venezuela, the biggest in the world, which led to the position taken. It is our position at this publication, unscientific to be sure, that this country has even more oil reserves than the S&P least case number of 22 billion barrels.

This raises an interesting question: why would ExxonMobil not want to announce to the world that there is more than, possibly multiples of, the 11 billion barrels reportedly found so far offshore?  One solid reason is that to disclose a number of, say, 20 billion, or anything upwards of that huge figure, would not only intensify pressure from Guyanese for more from their oil. It would also swing the attention of the world even more powerfully to the massive Guyana oil bonanza. It could open further the floodgates for voices from all over to highlight the callous, definitely heinous, 2016 contract. A vile contract basking in its 2% royalty, and other rich financial provisions that hemorrhage Guyana, and sweetly benefit ExxonMobil and others.

It would be better to withhold the sum of what ExxonMobil has already confirmed about Guyana’s proven reserves. It is wiser for ExxonMobil to release oil discovery and reserves developments on a staggered basis, with a billion barrels from this field, and a couple billion more from another.  With such a trickledown strategy, the spotlight and pressure are off from ExxonMobil to do better for Guyana, with the contract remaining intact.

Considering what could be, Guyana is in the best and worst of places.  There is the richness of great oil finds, but there is the poverty of not knowing, not actually knowing with any degree of certainty, how many billion barrels there are.  An assertive government, with courageous leaders standing as oil stewards, would have felt duty bound to pull out all the stops, and use every means at its disposal, to get an accurate and reliable picture of how much oil we really have.  To depend wholly and solely on ExxonMobil for information about oil reserves is allowing ourselves to be taken for a ride.

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• announcement, ExxonMobil, opposition, resources, Stabroek Block

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