The terms of Guyana’s first oil lift must be made public

The terms of Guyana’s first oil lift must be made public

Dear Editor,

There is a tanker alongside Liza Destiny and the efficient Exxon public relations office has advised “The first tanker of crude oil from the Liza field will begin loading this weekend. As we have previously indicated, ExxonMobil will process the initial cargo in its refining system”. To celebrate this event a Cocktail party and a public fireworks display were held on Friday night. Speeches were made, information was shared; President of ExxonMobil’s Upstream Oil and Gas, Liam Mallon said “you people don’t know what is down that well and that is what we bring to the table”.  I do not know that I am any wiser as to what is down there after all that has been said and done, however, what was not mentioned by any speechmaker, including the Head of the Department of Energy, is anything of specific relevance to Guyana’s share of the resources.

On the 24th December 2019, the Department of Energy signed a contract with Shell Western Supply and Trading Limited to buy Guyana’s first three lifts of ‘profit-oil’. We, the ordinary citizens of the country do not know what is contained in the agreement with Shell Western. We cannot continue along this path, it is a recipe for civil disaster. Is our membership in the Extractive Industries Transparency Initiative (EITI) for real or for a pappyshow? I would ask for the contract to be made public before the first lift is made.

Here are key questions that form the basis of my request: when is the lift? How many barrels are expected to be lifted? Given that Exxon would have lifted, refined and marketed many millions of barrels before Guyana’s turn, how will the price be determined? Has there been any pre-pricing? What are the costs that will be deducted by Shell Western for lifting? Are there fees for the data that Shell Western will provide after they refine ‘Liza grade’ crude? Are there any other companies that are being used in this process for marketing, analysis or any other service? Answers to these and other questions can only be found by reading the agreement, we may well find that it is a well-negotiated contract; given the secrecy, I harbour grave doubts.

Guyanese have not had the best experience with oil contracts to date. The Minister who signed the Exxon PSA, Raphael Trotman, say we should have gotten a better deal; Carl Greenidge another Minister in Granger’s Cabinet says Guyanese should have “put pressure on government to acquire more skills to build a better technical team as well as ensure the significant enhancement of the Ministries of Finance and Natural Resources, and the Guyana Revenue Authority (GRA)”. I am honestly at a loss to figure how the country has been managed by David Granger when two senior Ministers seem to believe the blame for the entire slipshod, incompetent management lies somewhere else. That said, we are at an important juncture, oil is to be lifted from our share and revenues are about to flow, we are in the dark as to what the details are at this late stage and that is unacceptable.

Yours faithfully,

Robin Singh


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