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Guyana received US$100M exploration bills in 2020 – Financials
Despite Exxon said COVID affected work programme…
Kaieteur News – ExxonMobil Guyana Limited (EMGL) was granted a one-year extension to continue exploring the Stabroek Block in 2020 after it complained that its exploration programme was affected by the COVID-19 Pandemic.
Vice President, Dr. Bharrat Jagdeo
Financial statements for the company and Co-Venturers, Hess Guyana Exploration Limited and CNOOC Petroleum Guyana Limited have however revealed that the company racked up an exploration bill of $20B or US$100M during that same period.
Vice President, Bharrat Jagdeo was therefore asked to explain why the country received such a huge bill for exploration when Exxon claimed it could not work due to the pandemic.
ExxonMobil was initially expected to relinquish (return) a 20% portion of the Stabroek Block to the government of Guyana in 2024. Former President, David Granger however approved an extension to the relinquishment provision, enabling the company to keep the entire block for an additional year. In this respect, Granger ordered that the days from the period March 2020 to March 2021 are not counted in assessing elapsed time applicable to the agreement.
The former Head of State gave the extension almost five months after the tumultuous March 2020 General and Regional Elections. He further ordered that the licensees/operator shall present updated work plans detailing mitigation efforts, revised schedules, planned milestones and other information as requested by government.
The new government later said it was satisfied that the conditions were met to justify the extension. The PPP however refused to share reports detailing how the operator was affected during the Pandemic.
On Thursday, Jagdeo explained, “President Granger in, I think August 2020, just before he left, he gave an extension. That document said that they would get the extension, but submit documents to us. So it happened before we assumed office. We then asked them to submit the original exploration plan and how it was affected and they proved to the satisfaction of the Ministry that there was a departure from the original exploration plan.”
The Vice President therefore reasoned that this explains why exploration costs were recorded on the Stabroek Block partners’ financial statements.
According to him, “They did do some exploration but it was a more aggressive exploration plan. There was a departure and that is why the extension was given, but it was given before (we took office), but we concurred with it, that’s why we didn’t make an issue.”
In addition to Guyana being charged exploration costs during the 2020 period, the Alliance For Change (AFC) also previously presented documents indicating that Exxon’s operations was Gazetted as an essential service during the Pandemic, therefore permitting oil and gas operations to continue unhindered.
The government however maintains that it does not need to provide evidence to justify the extension it endorsed, allowing the company to continue exploring the oil rich block.
The Stabroek Block which spans 6.6 million acres remains Guyana’s only commercial block with over 40 discoveries announced to date. The offshore concession is so massive that it is also equivalent to 600 individual oil blocks. In October this year, Exxon and its partners will have to return 20% or about 120 of those blocks to the State which would not include any of its discoveries.
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