New oil reserves – a clever game

May 05, 2024 Editorial

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Kaieteur News – The PPP/C Government has reduced Guyanese to engage in guessing games and a waiting game regarding how much oil has been found in the eight discoveries announced by ExxonMobil.  It is a clever game that the man in charge of the oil sector, Vice President Bharrat Jagdeo, has been playing.  First, he pretends to be ignorant, then he shifts the conversation into murky territory while feigning new knowledge, and recently, there is a new development that resembles his prints, so cunning it is.

The latest that Guyanese grapple with is that ExxonMobil has announced eight discoveries, but not a scrap of information about how many barrels of oil have been found.  Two years of blankness has been the constant reminder about new reserves.  This provides confirmation on the chronic secrets that have plagued the oil sector from the beginning, thanks to the machinations and moves of Jagdeo.  The only morsel of information that came to Guyanese was through a virtual backdoor.  It was from the smallest member of ExxonMobil’s Guyana offshore consortium, China National Offshore Oil Corporation (CNOOC), with 746 million barrels stated in company documents.  Both Alistair Routledge, ExxonMobil’s Guyana Country Head and Guyana’s oil czar, Bharrat Jagdeo, have been strangely quiet about that development.  This CNOOC disclosure has only intensified interest in what ExxonMobil knows about the oil reserves and why the company is balking at sharing this need-to-know information with citizens.  Mr. Routledge has been tightlipped and content with sending locals running in circles, and in Vice President Jagdeo he has found the most cooperative partner imaginable.

When Jagdeo does speak about oil reserves, he is slick enough to align his narratives with those of Routledge.  The wording is almost the same.  Routledge mentions “monetizing” assets and Jagdeo parrots monetizing.  Routledge feeds Guyanese convoluted stories about “appraisals” and Jagdeo is right there to echo the same six for a nine about how appraisals are time-consuming.  What was a vital and automatic part of oil discovery announcements before is now the merry-go-round insisting that appraisals can take years and are a deep scientific process?  Neither the foreign nor local oil chief has been forthcoming or frank about how CNOOC got its information about 746 million new barrels in one discovery.  Studious avoidance has featured prominently relative to the CNOOC disclosure.  One of the more curious developments is how ExxonMobil focuses on reengineering its longstanding oil reserve language, as is evidenced in Mr. Routledge’s public statements.  A not-so-humorous example is where ExxonMobil used to speak of oil reserves with earlier discoveries, Mr. Routledge is now clever enough to use the more nuanced oil “resources” today.  Reserves prompt the image of a reservoir or pool, while resources allow leeway to hedge through what is known and unknown, or commercially feasible or not.  In other words, the always scheming people at ExxonMobil are now more comfortable with resources because that could mean anything and everything that the company wants them to be.

The most recent twist in the new reserves’ mystery is that Dr. Asgar Ally, the chair of the Wales Development Authority spoke very confidently of where it is, using a lowball estimate.  This was what he shared with a Jamaican audience: “As of this point in time, we don’t know the full extent of the oil deposits but it’s huge and I could explain what that means. It’s about I would say they have identified at least 15 billion barrels of oil in the (Stabroek) Block. So at this point in time, I would say Exxon has identified about 25 to 35% of that.”

Possibly a minimum of four new billion barrels of oil, and both Jagdeo and Routledge have zipped their lips and lead Guyanese astray with this song and dance of “monetizing” and “appraisals.”  We do not think that former PPP/C Finance Minister Ally’s tongue slipped, with him letting the cat out of the reserves/resource bag.  It could be that Jagdeo used a trusted PPP/C insider to leak that, so as to slowly and smartly condition Guyanese about new reserves, notwithstanding his and Routledge’s gyrations on the issue.  Give reserves information in trickles and reduce any pressure building about renegotiation of ExxonMobil’s cradle-to-grave robbing 2016 oil contract.

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• Editorial, ExxonMobil, Government, Guyanese, PPP/C

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