Govt. trusting Exxon’s oil reserves estimate   

Aug 12, 2024 Editorial

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Kaieteur News – We reported last week that Vice President Bharrat is prepared to go along with what ExxonMbil has told him regarding Guyana’s current oil reserves. At a news conference last Thursday he insisted that the reserves have not shifted significantly, although reputable US firm, S&P Global recently disclosed that the oil reserves currently stands at 18.7 billion barrels, an increase from a previous estimation by the Chairman of the Wales Development Agency Asgar Ally who had put the reserves to at least 15B barrels in May of this year. Based on Jagdeo’s report last week the reserves have not significantly changed, which means it has not moved too far from the 11 billion barrel that was announced in 2022.

That last resource count, dated April 26, 2022, declared the recoverable resource for the Stabroek Block at nearly 11 billion oil-equivalent barrels. Since then, Exxon announced eight subsequent discoveries, the Seabob-1 and Kiru-Kiru-1 wells, Sailfin-1, Yarrow-1, Fangtooth SE, Lancetfish-1, and Lancetfish-2 wells, along with the recently announced Bluefin discovery. It was revealed that the Lancetfish discovery, which was made in April 2023, averaged some 100 million tons, which is equivalent to 746 million barrels, according to the conversion formula of the Independent Petroleum Association of America. Yet Jagdeo is going along with ExxonMobil claiming that there was no significant increase since the last update.

We have said here many times that Guyana does not have independent meters at the oil pumps offshore, so much of the information regarding production is being fed to it by ExxonMobil- a company which cannot be trusted. Any Guyanese that places an iota of trust in what ExxonMobil does here needs to obtain some professional attention.  Any national government, populated by patriotic leaders that think of ExxonMobil as a trusted partner, really ought to be nowhere near the corridors of power. We say it as bluntly as we can: ExxonMobil is not to be trusted, ExxonMobil has done little to garner credibility with Guyanese on their oil, has been as untrustworthy as they come when certain deplorable aspects of its presence here are weighed. The company has been found wanting, and by a large margin.

In reverse order, there is this fascinating US$214 million in audit findings that was mysteriously shaved all the way down to US$3 million. Right now, both ExxonMobil and the PPPC leadership have egg on their faces, and it is not of the freshly cooked kind. This US$214 million audit is a stink bomb that is not losing any of its aroma, even as the PPPC Government labors around the clock to suppress the odors that intensify. Why did ExxonMobil engage in what it did, and how could a partnership that calls for the highest levels of reciprocal trust deteriorate to this ugly state? With the production of oil some 120 miles from Guyana’s shoreline, this question takes on even more severity.  With Guyana limited in terms of capacity and technology, and all the essentials of requisite expertise, the issue of trust becomes even more urgent.

Then, there is this inexplicable matter of billions in oil expenses that the Government of Guyana conceals from its own citizens. Guyanese are the ones paying these expenses. Given what is taken out from their oil revenues, they have every right, therefore, to see every item that ExxonMobil has billed Guyana for under one project heading or the other. This assumes an even greater momentum when the absence of ring-fencing is given the sharpest gaze. Could ExxonMobil be trusted to be fair and principled in billing this country for expenses that belong only to our oil projects?  We at this paper are insistent: NO!  Should ExxonMobil be trusted to bill Guyana with accurate quantities and prices for materials and labor and systems said to be used in our oilfields?  Again, our answer is a resounding: NO!

In focusing on ExxonMobil’s accounting books, the company was caught with its pants down, and it is a sight from which Guyanese turn their faces.  ExxonMobil billed Guyana US$460 million for pre-contract costs from 1999 to 2015, but its own accounting systems disclose the revealing amount of US$368 million. This is how a US$92 million differential got bagged and tagged and dropped on Guyana’s head. How can this company called ExxonMobil ever be considered as worthy of any smidgen of trust from any Guyanese?  ExxonMobil is ripping off Guyanese, laughing all the way to the bank, and actively seeking ways to gouge this country still more. Given all this, it is clear that ExxonMobil’s production numbers cannot be trusted. The same can be said for everything that it does offshore.

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• Chairman, Exxon, Guyana’s, Guyanese, President Bharrat, Stabroek Block

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