Guyana ensuring oil and gas agreements are in country’s interest

GEORGETOWN, Guyana, Jul 1, CMC – Guyana is taking steps to ensure that all the agreements reached within the oil and gas sectors are in the country’s best interests and has a appointed a team to review the accords.
Minister of State Joseph Harmon said key government and other officials are now engaged in discussions and review of all of the agreements and arrangements that have been put in place, with respect to the country’s preparation for the oil and gas sector in 2020.
He said these include arrangements for the creation of the Sovereign Wealth Fund and the Oil and Gas Local Content Policy.
Harmon explained that the table top review came out of a meeting in which President David Granger appointed a team of ministers together with the government’s advisor on oil and gas, Dr. Jan Mangal to report on all issues relating to the sector to Cabinet.
He said the table top review is to allow for Cabinet to make decisions about the sector that are in “the best interest of all Guyanese”.
The Minister explained that to support the review, the team has held extensive consultations with several entities including a team of officials from the Extractive Industries Transparency Initiative (EITI) of the Inter-American Development Bank (IDB).
“We are basically at this point, of accepting advice but ultimately we would have to come up with what is the best practice, and what is in the best interest of the people of Guyana,” Harmon said.
He noted there are several statements that are being made, some by Venezuela with respect to role of ExxonMobil in Guyana and reiterated that Guyana is a sovereign nation, “and we will make decisions that are in the best interest of the people of Guyana.”
Harmon said that in moving forward, the government is taking consideration of all the historical issues with respect to the oil and gas industry including some of ExxonMobil’s past actions.
“We are taking note of all that is being said…and as a government. We have no issues with persons that are actually bring up information, for the benefit of the Guyanese people,” Harmon said, adding that the government in its continued engagement with ExxonMobil and other foreign companies, will continue to seek out a wealth of technical and experiences in the area of oil and gas.
He said that whilst Mangal is currently advising the team reviewing the decision of the sector, the government and the Ministry of Natural Resources’ in-house capacities will be augmented by the available international resources, as the country move forward with its negotiations.
“From time to time, we will identify leading experts in the field of law, environment and other negotiating skills, which we would put to use for the benefit of the people,” he added.
In March, the US-based oil company, ExxonMobil, said it would be investing five billion US dollars as it prepares to explore oil production in Guyana by 2020.
ExxonMobil Country Manager, Jeff Simon, said that its local affiliate Esso Exploration and Production Guyana Limited (EEPGL) had applied for a production licence and has contracted a Floating Production Storage and Offloading (FPSO) from SMB Offshore, a large company that specialises in tanker and FPSO construction.
The FPSO is a specialised vessel that will extract the oil from under the sea and store it until it is later moved to a refinery or sold on the world market. The FPSO will have an oil production capacity of 100,000 barrels per day.
Last month, the Ministry of Natural Resources announced that the government is preparing to issue a Production Licence to ExxonMobil “to move ahead in 2020; whilst placing emphasis on Guyanese employment and training, the procurement of goods and services in Guyana, infrastructural soundness and the protection of the environment.”
“The Government and people of the Cooperative Republic of Guyana will receive a royalty of two per cent on gross earnings and benefit from 50 per cent of the profits from the sale of petroleum once production commences,” the statement added.