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PNC now has most of the information needed to decide on ring-fencing – Norton
Leader of the Opposition, Aubrey Norton
Kaieteur News – The People’s National Congress Reform (PNC/R) now has most of the information it needs on ring-fencing, according to the party’s leader, Aubrey Norton.
Ring-fencing means that each oil project should pay for itself. It would also allow the country to benefit from 50 percent of profits at individual projects after expenses have been recovered or repaid to the Contractor.
The Leader of the Opposition provided an update on Thursday during his weekly press conference while responding to a question posed by this newspaper. Norton was asked to comment on Vice President, Bharrat Jagdeo’s remarks, who said that government did not receive a request from the Opposition for “well data” to determine the feasibility of a ring-fencing provision.
Jagdeo at his March 7, 2024 press conference told reporters that government was prepared to provide the information needed by the Opposition if it was not proprietary.
Norton later said on March 21, 2024, “I don’t attach much to what Bharrat Jagdeo says. He is always distant from the truth but I can say to you we have made our own efforts as far as our Oil and Gas Committee and they have gotten most of the information they want and I think they are addressing the issue (of ring-fencing)”.
The Opposition had explained at previous press engagements that it required “well data” to weigh the benefits of ring-fencing each oil project.
Economic Advisor to the Opposition Leader, Aubrey Norton Elson Low said on Thursday, “What we are saying is, as we see cost increase for developments, in order for us to get a sense of the development and the competitiveness of them and therefore their ability to be able to attract capital, we need to be able to see what is exactly driving up those costs. To that end we have been calling for data, not just recently, but I think over a year now for that kind of production and cost data so that we can come to a better understanding of this.”
In the absence of a ring-fencing provision, ExxonMobil Guyana Limited (EMGL), the operator of the Stabroek Block has been utilizing profits that should be directed to Guyana to pay for its activities across the block.
Each month, Exxon is allowed to deduct 75% of Guyana’s oil to pay for its exploration and development costs in the Stabroek Block. This is in keeping with the terms of the 2016 Production Sharing Agreement (PSA) Guyana signed with Exxon and its co-venturers, Hess and CNOOC.
Guyana has been repeatedly advised by independent international experts to ring-fence its oil projects to ensure the country benefits from its resources early on, as this would help to improve the nation’s education, infrastructure and health services among others. This is particularly important for Guyana, a new-comer to the sector, as the world transitions to cleaner sources of energy, causing a decline in oil prices.
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