No checks on our oil

Sep 05, 2024 Editorial

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Kaieteur News – For years this newspaper has sought answers regarding how much oil ExxonMobil is deducting for its operations as per the lopsided Production Sharing Agreement (PSA) Guyana signed with that American company.

It was refreshing to see International Lawyer, and activists Melinda Janki raising this issue at a recent webinar, where she mentioned that she had sought the answer to this very question from President Irfaan Ali several years ago, but received no answer. Article 11.9 of the PSA states: “The Contractor shall have the right to use in any Petroleum Operations as much of the production as may reasonably be required by it therefore and the quantities so used or lost shall be excluded from any calculations of Cost Oil and/or Cost Gas and Profit Oil and/or Profit Gas entitlement.”

However, the country does not know how much oil is being taken out by Exxon to run its operations. Janki during a webinar on Sunday pointed out, “The Petroleum Agreement says that Exxon, Hess and CNOOC can take as much oil as they need for the operations. So when they produce the oil, they can take, each one of them, Exxon, Hess and CNOOC, each one of them can take as much oil as they say they need for their operations.” In 2021, Janki said she wrote to President Irfaan Ali requesting information on how much oil was being deducted by the companies; however, she never received a response.  She said, “Either he doesn’t know or he doesn’t want to say, but this oil does not get counted, it’s just gone and the rest of the oil is divided into cost oil and profit oil, so if you think of the oil, you have got three things- one, the free oil that’s taken off the top, we don’t know how much that is and it doesn’t count and then the rest of the oil which is divided into something called cost oil and profit oil.”

It must be noted that all other oil production related data have been made public by the government including how much gas was flared, used for fuel and re-injected, along with the quantity of produced water, however when it comes to how much ExxonMobil is deducting for its operations has been a state secret.

It is the same carefree approach that has been taken regarding putting our own meters at the oil pumps being operated by ExxonMobil in order to monitor offshore oil production. So we ask today which leader would be able to look the Guyanese people in the face, and say that there is no move to get meters to keep ExxonMobil honest with actual oil production numbers, but the best is being done?  What is it that we at this paper do not know that can justify having no meters of our own to monitor what ExxonMobil is doing offshore?

In the best of circumstances, when there is a partner that has proven to be one that is credible, a chance may be taken in Guyana not having its own meters looking out for us, barrel by barrel. It is ironic that the PPP/C Government has such discomfort, so many anxieties, with citizens clamoring for better from the nation’s oil patrimony, but it does not manifest a single concern about what ExxonMobil could be doing in the oil fields 120 miles from shore, and those in control don’t know the whole story.  What could be made of this standard?  Could it be that the Government of Guyana, of the Guyanese people, is in bed with ExxonMobil, and the tricks that it is pulling on this country with the amount of oil produced?  Who are leaders listening to, being coached by, in slowing down getting vital meters?

What the government and its leadership team are doing does not make sense, nor give much comfort, when there is clear awareness of the kind of operator that ExxonMobil is.  The history of this American supergiant is one that is checkered, and its own records have often put it to shame, before regulators and the courts.  Right here, ExxonMobil has been a prime exhibit of the partner from hell. ExxonMobil has been about anything and everything that richly benefits itself, and what suffocates the promise of this country. Starting with an oil contract that is unspeakable, so reprehensible it is, ExxonMobil has been about pulling every trick in the book to get one over Guyana.  A genuine partner does not operate in this greedy manner, not even in the cutthroat world that is about skimming secretly, and profiting perversely at the expense of those who are called partners.  ExxonMobil has gone to great lengths to gouge Guyanese of their oil dollars, as the US$7.3 billion audit of Liza 1 and 2 projects has revealed.  The US millions in expenses claimed are not about what is frivolous, they reek of what is covetous.  From contract to expenses hidden and audits, the reports are of a partner, ExxonMobil, that seeks every opportunity to swindle Guyanese out of their already low oil revenues.

In a context such as this, it is unimaginable, therefore, that the Guyana Government (any government), and Guyana’s leaders (any leaders anywhere) could be so casual, so irresponsible, in getting our own meters to monitor the flow of oil from the seabed through the company’s systems, and to the storage tanks.  Whatever the cost of getting our own meters, it would be money well spent, and the earlier that they are bought and installed the better for Guyana. There would be our own metering system, and our own people overseeing firsthand how much oil is passing through the pipes and lines, not some secondhand, probably trumped up, numbers from ExxonMobil.

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• Editorial, ExxonMobil, Melinda Janki, operations, production

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