Dear Editor,
Your Sunday December 2, 2018 edition carries a report in which Public Infrastructure Minister Mr. David Patterson reports that a Dutch company will be undertaking an ocean floor mapping “as government prepares to bring natural gas onshore”. The article quotes at various points two Ministers – Patterson and Raphael Trotman – and Dr. Mark Bynoe, the Head of the Department of Energy.
It is unclear how much this mapping will cost and where it is provided for in the Budget. The closest it comes to is a project described on page 467 of Volume 1 of the Estimates as Energy Matrix Diversification Programme with an of allocation of $600 million for provision for studies and distribution infrastructure in the capital budget of the Ministry of Public Infrastructure. This then refers readers to Volume 2 of the Estimates which then lists six separate project descriptions only one of which comes any way close to the kind of activity described by Patterson and that is Support for pre-investment studies. That is the extent of the information.
Confusion arises in the same article attributing statements to Dr. Bynoe about a gas to power feasibility study to “not only determine where the gas pipelines should be landed …” And for good measure the article also refers to Trotman speaking of a desk study having been undertaken and that the gas pipelines will be landed at Woodlands, Mahaica, East Coast Demerara. This involves a World Bank Loan of US$20 million.
This suggests serious confusion not only among Cabinet ministers but in the Government as a whole. Since Patterson’s and Bynoe’s initiatives are funded by different sources they must be different projects. But why two and has Trotman’s now been discarded? One has to hope that the President or the newly designated Petroleum Minister Mr. Joseph Harmon can offer some clarity. There is also a more fundamental problem: under the Esso/Hess/CNOOC Petroleum Agreement, first option on gas lies with those three contractors and they have several years to decide how they propose to deal with both Associated and Non-Associated Gas.
Patterson has so far displayed a remarkable unfamiliarity with the Agreement and one really has to hope that there is someone who is checking to see he does his homework. The IDB, the World Bank, the IMF and, especially the Islamic Development Bank and China, are only too willing to plunge money into this emerging oil economy regardless of its internal confusion.
In the final analysis, it is the Guyanese taxpayers who will have to finance the repayment of the loans and it is we who will bear as Recoverable Contract Costs, any costs and expenses which are incurred by the Contractors. In other words, we Guyanese will have to suffer the consequences of any confusion or poor decisions made by various segments of the Government. We therefore cannot just shrug and dismiss the actions of Ministers, however misguided they might be.
I will be addressing the issue of Associated and Non-Associated Gas in greater detail in this coming Friday’s Oil and Gas column in the Stabroek News.
Yours faithfully,
Christopher Ram
