The Week-in-Review – January 26th to February 1st

Oil & Gas

Guyana stands to lose US$55B in bad oil deal – Saying that available data show that Guyana has an oil deal far below global standards and will lose out on up to US$55 Billion over the 40-year period of the licence for the offshore Stabroek Block, international corruption watchdog Global Witness has written to ExxonMobil urging a renegotiation. “Exxon should renegotiate the Stabroek license so that Guyana obtains a fair deal,” a letter written by Senior Campaigner of the NGO Jonathan Gant to ExxonMobil’s Country Manager Rod Henson stated as he asked the company to respond to a number of statements from an analysis done. The data, according to Global Witness, will be used as it compiles a report on this country’s oil sector, which is to be published soon. Global Witness had written to the company last month and had gotten a response but said that with the recent announcement of ExxonMobil’s 16th discovery and its increased estimate of reserves of over 8 billion barrels of oil equivalent, it needed further clarity for updated analysis. “We would welcome your comments on the following statements. If any are inaccurate, we would be grateful if you would say in what way,” the letter, seen by Stabroek News, states.

Steep rise in oil reserve seen as upping pressure for revamping of Exxon deal – ExxonMobil last Monday said it has increased its estimated recoverable resource base in Guyana to more than 8 billion barrels of oil-equivalent (BOE) and made a further oil find northeast of the producing Liza field in the Stabroek Block, offshore Guyana. The whopping eight billion BOE underlines the high stakes at the upcoming March 2 general elections and the challenge that the next administration will have in managing the sector. The new BOE is roughly 33% above what had been declared as recently as December last year when Exxon made its 15th discovery at the Mako-1 well. The 16th find on the Stabroek Block was made at the Uaru exploration well. A release on Monday from Exxon said that the new recoverable resource estimate includes 15 discoveries offshore Guyana through year-end 2019. The Uaru discovery is the first of this year and will be added to the resource estimate at a later date.

Hess not worried about oil deal renegotiation – Even as the company plugs most of its US$3 billion capital and exploratory expenditure into its Guyana operations, Stabroek Block partner Hess last Wednesday brushed off concerns about a possible renegotiation of the Production Sharing Agreement (PSA) that it and its co-venturers, ExxonMobil and CNOOC, have with Guyana, while saying both government and opposition have signalled they will not renegotiate. “Most of the news that you hear is not from reliable sources, neither the current government nor opposition government. I think they both have been pretty clear that they’re going to honour the [PSA]. So I think that’s the real takeaway you should have,” Hess CEO and Director John Hess said on Wednesday. He was at the time responding to a question from Barclays Bank PLC, Research Division-Research Analyst, Jeanine Wai, during the company’s Q4 2019 Earnings Conference Call, on recent headlines here about the potential for a contract renegotiation. The PSA between Guyana and ExxonMobil’s affiliate, Esso Exploration and Production Guyana Limited (EEPGL), and partners CNOOC, NEXEN Petroleum Guyana Limited, and Hess Guyana, states that up to 75% of the revenue earned from production could be used for expenses and to recover the companies’ investment. This was estimated at US$5 billion by the year 2020, when production was estimated to begin at the Liza-1 well. The remaining 25% – profit oil – is to be split evenly between Guyana and ExxonMobil.

Jagdeo supports Ali’s position on Exxon contract – The views expressed by the PPP/C’s presidential candidate Irfaan Ali on how the party intends to deal with current oil and gas contracts should the party win the upcoming General and Regional Elections,  reflects the party’s position and should not be disputed, General Secretary Bharrat Jagdeo says. “Irfaan has made it clear how the PPP/C intends to move forward…he made a post following the Reuters story and what he says is the party’s position,” Jagdeo told the Stabroek News when contacted. On the sidelines of a January 18th campaign rally at Anna Regina in Essequibo, Region Three, Reuters said that Ali informed that an Ali-led PPP/C government would “keep the Exxon contract intact” but review and push for renegotiation of others signed after 2015. The article quoted Ali as saying that Exxon was a pioneer investor here and “a different case” which he would not look at for a renegotiation, should he become president. “Exxon was a pioneering investment,” Reuters quoted Ali as saying. “But those that came after that time they were not pioneering, so they have to be examined in totality,” he added.

GRA working for 24/7 presence on oil operations – The Guyana Revenue Authority (GRA) is actively participating in the ongoing audit of the US$460 million in pre-contract costs claimed by ExxonMobil and its co-venturers and is working to have a 24-hour presence on offshore oil operations and closed-circuit television access as it yesterday promised strict tax oversight of the petroleum sector. “There is a full gamut of activities that we are required to monitor and evaluate… just to say that we have been successful and the next (oil) lift is slated for tentatively the 3rd or 4th of February and we are in full state of readiness to attend to those duties,” Head of the GRA’s Petroleum Unit Lancelot Wills told a press conference held by the agency on Friday to bring the public up to date on its activities.

Industrial relations

Rusal lays off almost all employees on eve of meeting with Chief Labour Officer – On the eve of a meeting with Guyana’s Chief Labour Officer, the Russian-owned Bau#xite Company of Guyana Inc (BCGI) laid off nearly all of its employees, a move that has left the Minister of Natural Resources Raphael Trotman shocked. The company last Wednesday notified workers of their employment status by way of letter on its notice board outside the company’s premises, which listed some 146 persons along with their job identification numbers. “That is nearly all if not all of us,” an employee told the Stabroek News via phone. “We wish to advise that we are forced to further reduce operations and to lay off employees due to adverse operating circumstances including shipment interruption due to the blockage of the Berbice River. Unfortunately, the employees listed below are affected by the reduction and have to be (laid)  off effective the 30th January 2020 and to be recalled as soon as the situation returns to normal,” the correspondence said while informing that individual letters would be sent via post to the homes of the employees. The blockage was installed on the river by workers after 142 of them were laid off last week after the company said it had experienced a fuel shortage.

Elections

Granger announces squatter resettlement initiative  – President David Granger on Friday announced plans for a squatter resettlement body as he sought to make his case for re-election to residents of Region Three (Essequibo Islands/West Demerara), where he also touted conditional cash transfers for families with school-age children from oil revenues and access to farming lands for laid off sugar workers. While addressing a huge crowd at the Leonora Track and Field Centre, Granger declared that during the incumbent’s planned ‘Decade of Development,’ Guyana’s oil revenues will be used to provide housing, education and employment for “the ordinary people”. Specifically, he promised a massive squatter resettlement programme, the conditional cash transfers for families, with school-age children and access to farming lands for laid off sugar workers.

US urges Guyana to ensure elections free and fair – The United States last Tuesday called upon Guyana to ensure that the March 2nd general elections are free and fair and expressed concerns about the Government’s “apparent misapplication” of the country’s constitution and “certain court rulings.” US Ambassador Sean Mariano speaking at the 35th Session of the United Nations’ Universal Periodic Review in Geneva, Switzerland recommended that Guyana immediately implement reforms to strengthen electoral procedures to enhance the independence of electoral authorities in order to ensure the March 2nd elections are “free, fair, transparent and credible.” “The United States in concerned by recent actions by Guyana that may undermine democratic principles, including apparent misapplication of the Guyanese constitution and certain court rulings,” the representative said. Mariano would likely have been referring to the fact that the Government did not dissolve Parliament and call elections within three months of the December 21st 2018 No Confidence Motion passed in the National Assembly but instead proceeded to challenge it in the courts which moved all the way to the Caribbean Court of Justice (CCJ). The CCJ was asked to rule on various cases emanating from the motion and ruled that the motion was validly passed and that the relevant sections of the constitution were now applicable. It, however, issued no coercive orders and the government did not call elections until several months after those rulings.  The unconstitutionality of the appointment of former Chairman of GECOM, Justice James Patterson, would also be another area where President David Granger ran afoul of the constitution.

Health

After coronavirus outbreak, Guyana closing Beijing embassy, moving to bring home students – Minister of Foreign Affairs Dr. Karen Cummings on Friday announced that government has taken a decision to close its embassy in China due to the coronavirus epidemic and is also working to have Guyanese students there returned home. “…We have decided to close our embassy in China…,” Cummings told reporters on the sidelines of an event at D’Urban Park. Cummings also said that there are currently Guyanese students in Wuhan, China, where the virus was first reported and she said they will be returned home in “due time” even as she called on their immediate relatives to be patient.

Aviation

Guyana makes gains in aviation compliance – Following significant gains in compliance with the International Civil Aviation Organization (ICAO) Standards and Recommended Practices (SARPs), the Guyana Civil Aviation Authority (GCAA) believes the foundation has been laid for Guyana to attain Category 1 status from the Federal Aviation Administration (FAA) of the United States and preliminary discussions have started. GCAA Director General Lieutenant Colonel (retired) Egbert Field last Tuesday  explained that the agency has commenced discussions with the FAA on what needs to be done for the country to attain the Category 1 status and the US body has signalled its willingness to assist.  “They responded and did say they are willing to assist us to move into or to attain Category 1 status. To do that, they are willing to send a team as soon as we give them the ‘ok’ to assess our situation, to assess where we are so that if there are any gaps, we can fill them but we are at a level now that we can move towards talking to the FAA about Category 1,” Field said during a press conference held at the GCAA’s headquarters.

Politics

Attorney General leads list of APNU+AFC MPs delinquent in declaring assets – Attorney General Basil Williams, Minister of Communities Ronald Bulkan, and Speaker of the National Assembly Dr Barton Scotland are among 74 public officials who have been identified as being delinquent in filing their declaration of assets for last year, according to the Integrity Commission. The list was published by the Commission in the Official Gazette on Friday afternoon. The other ministers identified by the Commission for not complying with their statutory duty to file their declarations were: Minister of Social Cohesion Dr George Norton, Minister of the Public Service Tabitha Sarabo-Halley, Minister within the Ministry of Communities with responsibility for Housing Annette Ferguson, Minister of Foreign Affairs Dr Karen Cummings, Minister within the Ministry of the Presidency with responsibility for Youth Affairs Simona Broomes, and Minister within the Ministry of Agriculture with responsibility for Rural Affairs Valerie Adams-Yearwood. The other former APNU+AFC MPs who were recorded as not yet filing their declarations are: Jennifer Wade, Rajcoomarie Bancroft, John Adams, Richard Allen, Mervyn Williams, Michael Carrington, Jermaine Figueira, Barbara Patricia Pilgrim, Donna Moothoo, Reynard Ward, Dr Rupert Roopnaraine, and Audwin Rutherford. The list was not published in the local newspapers as was done in 2018, likely owing to the Integrity Commission’s persisting financial woes.

Cabinet sub-committee noted 57 contracts on December 30 – A total of 57 contracts were noted by a Cabinet sub-committee on December 30 last year as the government continued to pursue major projects notwithstanding its caretaker status. Based on the documents seen by Stabroek News a large number of the contracts noted by the Cabinet subcommittee could be deemed as pressing while there were some that were not pressing. On January 10 this year, Stabroek News had reported on 31 of the contracts plus another 23 by the subcommittee on December 23rd. The Ministry of the Presidency did not release a list of these contracts as is customary. In the new documents made available to Stabroek News, 26 more contracts were taken notice of on December 30. These include a contract for the installation of LED lighting at sections along the Linden Highway, a contract for 24” SDR 11 HDPE pipes for the Guyana Water Inc and a contract for the procurement of portable solar-powered runway lights for the hinterland and airstrips. A contract for the completion of the 400 KWP solar PV farm at Mabaruma was also noted. This project had encountered a series of problems and is significantly behind schedule.

Banking

Ganga optimistic of Citibank setting up in Guyana – Guyana remains optimistic of Citibank establishing a presence in Guyana and has promised the US banking institution to assist in making that a reality, even as the country prepares for another round of meetings in April. “They are looking at the possibility of opening something here, given the potential and I was able to discuss with them the numerous possibilities here, more so now with oil and gas and they seemed very happy,” Bank of Guyana Governor, Gobind Ganga told Stabroek News. “They are doing their due diligence…I told them whatever it is that they need or believe they are not clear on that they can contact me,” Ganga added. He was quick to point out that Citibank is not a retail bank but may be looking at “providing funding to government institutions and things like that”.

Crime

Corentyne rice farmer gunned down in alleged cattle rustling feud – A Corentyne rice farmer, who is accused of being a cattle thief, was gunned down in the Number 67 Village, Corentyne backlands on Thursday, while allegedly stealing two cows. The body of Parmanand Lakeram, also known as ‘Bachan’, 45, of Lot 52, Number 68 Village, Corentyne, was removed from the backlands on Friday morning by police. Lakeram reportedly suffered multiple gunshot injuries to his head, belly and other parts of his body. According to a police source, a “main suspect” has since been arrested. Two workmen, who were allegedly with Lakeram at the time of the shooting, were also detained at the Springlands Police Station assisting with the investigation.