'Knowing oil reserves not important to the nation' - VP Jagdeo tells reporters

‘Knowing oil reserves not important to the nation’ – VP Jagdeo tells reporters

Mar 22, 2024 ExxonMobil, News, Oil & Gas

Vice President, Dr. Bharrat Jagdeo

Kaieteur News – Vice President Bharrat Jagdeo on Thursday revealed that the Government of Guyana (GoG) has been updated on the Stabroek Block reserves, however this information is not important if ExxonMobil does not move to production.

He made those remarks in response to an article published by Kaieteur News, during his weekly press conference, hosted at Freedom House, Robb Street, Georgetown. In its Sunday March 17, 2024 edition, this publication reported that the Opposition said it was disrespectful that the nation is being kept in the dark on its oil reserves. Since April 2022, Exxon has not provided the country with an update on the estimated resources discovered in the prolific Stabroek Block. Last week Friday, Exxon announced another successful discovery, Bluefin, but was tight-lipped on how this increased the country’s total recoverable resources from its last estimate of 11 billion barrels- some eight discoveries ago.

Following the announcement of the Bluefin discover, the Opposition 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.”

In response, Jagdeo pointed out that the country has been receiving quarterly reports from the operator of the block on the reserves. “We know about all the reserves we have now but the only way this country can make money (from) is if we actually convert the resources into reserves and then into production. Knowing reserves without converting it into production is nonsense because we already know we have 11 billion barrels of reserves and it will keep growing but what’s the point about knowing any, about reserves,” the VP said.

He continued, “and we do get every quarter, a report on reserves. Every quarter, we get a report so we got a quarterly report, the Ministry in the last quarter of 2023 on it, so the information has to come to us.”

Jagdeo pointed out that while the information is presented to government, its focus is not on pushing Exxon to do more appraisal activities to understand the resources discovered, but on moving to production, since “you only make money on production for the country, not knowing how much reserves you got.”

In the realm of oil and gas, companies undertake a process known to the industry as appraisal to help the developer determine whether or not a project is viable. This process helps to reduce the range of uncertainty in the volumes of hydrocarbons in place; define the size and configuration of the reservoir and collect data for the prediction of the performance of the reservoir during the forecasted production life.

Jagdeo was asked to provide an estimate of the country’s reserves but instead said he would check to see whether the report submitted by ExxonMobil contains proprietary information so they can be shared on the Ministry of Natural Resources’ website. “I have asked the Ministry on that to see if there is anything proprietary in the reports and to see if we can’t extract the basics, so if the report in its fullness has elements that are only the Ministry and the staff of the ministry then we can’t extract parts of the report and make it public on the Ministry’s website,” the Vice President explained.

Jagdeo said that while the Oil and Gas Governance Network (OGGN) had called for updates to be provided within two months, this is not possible. According to him, “When you discover oil, it doesn’t mean you immediately know the quantum etcetera. You have to come back often and do an appraisal well or estimate the resources on the basis of the geology, a whole range of complex issues, so they somehow, they are conflating discovery with knowledge of reserves.”

He added that Exxon reported its focus was moving to production and he agreed with that position. Jagdeo noted, “It’s important we get the data but it’s not an obsession of the government (to know the reserves) because even if you know more about the reserves, the only way we will benefit from that is if the projects are done and our focus is on getting the projects approved because it’s out of the projects that this country will make money.”