Following the announced move by the coalition Administration to have responsibility for the oil and gas sector removed from under the Natural Resources Ministry and handed over to a Department of Energy within the Ministry of the Presidency, Government is now creating and new Ministry and likely a new minister to take control of the sector when oil production commences in 2020.
This was revealed by President David Granger on Friday at a media conference, his first for 2018. According to the Head of State, “The Department of Energy itself is just an interim measure. In due course, we hope to have a ministry responsible for the petroleum industry; it is too large. We are now setting up, we are now acquiring premises, we’re now recruiting personnel, we’re now reviewing legislation; so a lot of work has to be done. But right now we’re in the early stages of setting up a Department of Energy, and in due course there will be a Ministry of Energy or Petroleum,” the Head of State posited.
Back in March, Natural Resources Minister Raphael Trotman had disclosed that he had recommended the oil and gas sector be removed from his Ministry and be placed under the department, which will be “focused only on the development of the petroleum sector.”
Government’s spokesperson, State Minister Joseph Harmon, had subsequently said while the department would initially focus on oil and gas, it would later on take over responsibility for energy as well.
In the past months, there have been calls for Trotman to be removed from his position as Natural Resources Minister, especially when it was discovered last year that Government had stashed US$18 million in a private account in the Central Bank, which it received from ExxonMobil as a signing bonus.
Though this discovery was made since last year, the Government has made no attempts to have the money placed into the Consolidated Fund, when the Constitution dictates that all public revenue be placed in the Consolidated Fund, with the exception being where a specific law allows for the money to be placed in a special account.
Moreover, Trotman was also criticised for his handling of the oil contracts between Government and ExxonMobil.
In fact, even Government’s own adviser on petroleum, Dr Jan Mangal, had criticised Guyana’s two per cent royalty on earnings from ExxonMobil’s oil sales, which he said is low, compared to global standards.
However, at Friday’s press conference, President David Granger said that while the agreement between Guyana and Exxon will be the subject of review by the Department of Energy, there will be no question of renegotiation of the contract with the US oil giant.
“Given the circumstances at the time, I think the Government did what was in the realm of possibility. I do not want to answer in the way you may feel it should be answered, [but] given the situation at the time, I felt we did the best we could, given the circumstances,” the Head of State maintained.
Nevertheless, President Granger posited that Government will be moving forward and will ensure that it has the best advice in the future before entering into any other contracts.
Earlier this week, it was announced that ExxonMobil has made its ninth oil discovery offshore Guyana at the Hammerhead-1 well in the Stabroek Block.
Previous discoveries on the Stabroek Block at Liza, Liza Deep, Payara, Snoek, Turbot, Ranger, Pacora and Longtail wells had led to the announcement of an estimated recoverable resource of more than four billion oil-equivalent barrels and the potential for up to five floating production, storage and offloading (FPSO) vessels producing more than 750,000 barrels per day by 2025.