Jagdeo backs one-year old company to monetise Guyana’s gas

Aug 24, 2024 News

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…says Gov’t was aware former Exxon VP founded Fulcrum LNG

Kaieteur News – Vice President Bharrat Jagdeo has thrown his support behind the one-year-old company, with no known projects completed, to monetise the country’s gas resources.

He told reporters at his Thursday press conference, hosted at Freedom House, Robb Street, Georgetown that the Government of Guyana (GoG) was aware of the company’s link to U.S oil giant, ExxonMobil had no qualms about it, since the founder of Fulcrum LNG had already cut ties with Exxon.

Research by this publication found that Fulcrum LNG was founded by Jesus Bronchalo who worked 19 years and one month for ExxonMobil. The last position he held for the company was Vice President and Chief Commercial Officer for the Guyana operations. His tenure ended in February 2023.

According to reports, Bronchalo five months later- in July 2023- launched the energy company, Fulcrum LNG, boasting “experience and expertise across all aspects of the oil and gas value chain, including low-carbon solutions.”

The GoG subsequently issued a Request For Proposals (RFP) in January 2024 seeking private sector pitches for the design, financing, construction, and operation of gas infrastructure to support current and future upstream developments in Guyana.

Proposals were opened in February this year and by June, President Irfaan Ali announced the contract award to Fulcrum LNG.

Jagdeo said on Thursday, “We knew the person worked with Exxon, he had left…we knew that when the evaluation took place but the evaluation took place on the basis of the proposals that were made.”

The Vice President however joked that the evaluators may have believed Bronchalo had data on the gas which added a boost to his proposal that was among comprehensive pitches from other major international companies.

“He had left Exxon but if anything maybe the evaluators thought that he had the data on the gas. I don’t know if they did that, so he would have known, because Exxon does not want to go in that direction or did not want to go in that direction of monetising the gas in the early period- they said they needed the gas to be re-injected. We have a different view,” Jagdeo explained.

To this end, the Vice President opined that the best proposal was selected by the evaluators. According to him, “On the face of it, I thought it was the best proposal that the evaluators came up with and that’s what we’re looking for, so there is nothing I found wrong with the evaluation of the bids and I don’t see anything that has come out in any major way that’s wrong, except for that oh, he worked at one time with Exxon.”

When asked to comment on the fact that Fulcrum LNG has no known experience and has only been registered for one year now, the VP continued to defend the contract award, insisting that the Founder has years of experience in the field through his former employment with Exxon. “But he was there with Exxon a long time, but he has been a project developer for a long time,” Jagdeo pointed out.

Fulcrum LNG contract

Kaieteur News understands that the company will be responsible for the design, financing, construction, and operation of gas infrastructure, inclusive of the necessary pipelines required to connect the gas infrastructure crucial for monetizing upstream gas.

Further, as part of the process, the company will have exclusivity to negotiate with the government for its entitlement of gas to ensure the viability of the project and the overall value chain. Notably, the project will be strictly financed and owned 100% by Fulcrum LNG.

According to information received, evaluators assessed 17 proposals received on a number of factors. The requirements included: the developer’s capability and credibility to execute such a project, clear written agreements among the parties, and if a consortium, evidence of consortium agreement for this project, site plan for the project, summarized and detailed project schedule, project costs, project structure diagram, business plan, list of legal agreements, proposed capital structure and details of proposed local content.

The deal between the GoG and the former ExxonMobil Executive continues to raise eyebrows as company details remain sketchy. It should be noted that Fulcrum LNG would be entrusted with developing the country’s gas resources for monetisation purposes, however given its association with ExxonMobil, stakeholders remain concerned about whether the interests of Guyana are being protected in the transaction.

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• experience, Exxon, Fulcrum LNG, gas, Jadgeo

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