That some very poor and costly decisions in Guyana’s budding oil and gas sector have recently been visited upon Guyanese is now sufficiently established. We expect political decisions in competitive democratic societies to be marginally suboptimal: although usually done in the country’s name, they usually reflect the interests of some class, region or group. However, I am talking here of instances where politics are at a minimum, even the corrupt should be able to make better decisions and where largely well-meaning people continue to make very poor decisions/non-decisions.
The government process is replete with questionable decisions, of which the controversial production sharing agreement with ExxonMobil is a signal example. But apart from this important issue, poor and costly decision-making has again raised its head in the discourse relating to the auditing of the ExxonMobil pre-contract costs and other matters. Indeed, Dr. Jan Mangal, an expert in the oil and gas industry, has claimed that the Ministry of Natural Resources (MNR) has not yet reviewed the US$4.4 billion capital cost for the Liza Phase 1 project. ‘If one assumes the capital cost for the Liza Phase 1 project could be reduced by 20%, which is not unreasonable, then the MNR effectively gave ExxonMobil US$880 million of Guyana’s money for no reason. That is more than four Skeldons’ (the US$200m East Berbice sugar factory usually portrayed as a white elephant of the previous PPP/C government) (SN: 12/09/2018).’
