Government is now awaiting the recommendations of two independent agencies that are in the process of reviewing ExxonMobil’s production licence applications to make a decision on the way forward.
Natural Resources Minister Raphael Trotman on Monday was quoted in the media saying that the US oil giant had submitted its application in December 2016 and was now awaiting approval. He explained that the process was a very rigid one that was aimed at guaranteeing that Guyana got the best deal.
He said further that one team was hired to review the environmental aspect of the licence agreement, while the other consultant was looking at the technical aspect of the project.
“We expect to get reports from both independent bodies within the next week or two, then Government’s decision will be informed as to whether or not, we can proceed towards products in 2020,” the Minister explained.
Trotman said consideration was being given to oil spills and the effects these could have on marine life and life along the coast in relation to fisher folk.
Two weeks ago, outgoing Country Manager for ExxonMobil Guyana, Jeff Simon had told the local media that the company was yet to make a Final Investment Decision (FID).
The Country Manager explained that there was need for some level of certainty that must be exercised on the part of the Government of Guyana in granting the licences and approvals.
The Environmental Impact Assessment (EIA) is currently being reviewed, while the production licence has to be granted by the Guyana Geology and Mines Commission (GGMC).
Since 2015, ExxonMobil has announced three oil finds offshore Guyana. The most recent discovery came in April 2017, when the company found 25 metres of high-quality oil-bearing sandstone reservoirs at its Snoek well in the Stabroek block.
The company has also hit oil at Stabroek’s Payara and Liza fields. The latter is estimated to contain up to 1.4 billion barrels of light oil. According to the company, by the mid-2020s daily output from Stabroek could reach 450,000 barrels.
At present, tenders are out for local suppliers and contractors that are able to support a number of projects for the company’s operation.
ExxonMobil could invest $5 billion as it prepares to explore oil production in Guyana by 2020.
Just recently the Transparency Institute of Guyana Inc (TIGI) issued a statement saying that is was less than impressed with the Natural Resources Ministry’s commitment to transparency and accountability within the emerging sector.
Moreover, Government was also criticised over the issue of transparency by Control Risks Senior Analyst Raul Gallegos.
Gallegos was addressing an audience in California at the XXVI La Jolla Energy Conference during a plenary session on “Latin America’s Upstream Prospects and Outlook”.
Gallegos, a former journalist and an expert on Venezuela, told the gathering of investors, leaders and Government officials that the problem with Guyana was the issue of transparency.
He added that over the past few months, he and his team spent a considerable amount of time “patching” up a little information on what the Guyana Government planned to do with the revenues from the oil sector. The Government, he said, “still cannot figure it out”, making reference to the contract and plans for the revenue streaming in from oil.
Meanwhile, Director of the Centre of Commercial Law at University of Reading, England, Professor Jorge Guira, who addressed stakeholders at his lecture session titled, “Paradise found in Guyana? Meeting the challenges of oil and gas exploration and production”, at the Theatre Guild Playhouse in Kingston on Thursday, warned that Guyana could encounter the ‘resource curse’ if stringent measures are not taken.
Among other things, he said that in order to avoid such a curse, Guyana must implement a robust legal and institutional infrastructure, which is strong and specialised for the oil and gas industry, and one that will make sure that the environmental situation is one where oil companies have every reason to do the right thing.