Dear Editor,
We must applaud the PPP government for voluntarily seeking a review of the Payara project. Would it lead to renegotiation of the contract and increased revenue sharing, Guyanese are asking.
Government is short on revenues. So it rightly sought a grant from a willing donor country, Canada, to pay the costs have the review the done. Donor countries dictate conditions on aid and have to approve the reviewer. As anyone who studies development economics would know, the PPP government does not select the reviewer although it could reject the selection and could request a more able body to conduct the review. Is there justifiable reason to question the professionalism of the review team? Should Guyana pay for and undertake its own review? What would the review be about? Would such a review be any different from that to be undertaken by Bayphase and or the Alison Redford team?
Some critics have called for a complete and thorough review of the entire project from exploration site to actual drilling and all aspects relating to recovery of oil and gas. Such a review is like starting over from afresh in finding oil and then deciding what to do with the find. I don’t think that is what the nation has in mind when it requested or give its support for a review – Guyanese want a renegotiation of the contract for more revenues. I also don’t think a review of the technical aspect of Payara is what the President had/has in mind when he responded to a reporter’s question on Janamashtmi Day that a review of Payara would be undertaken. Vice President Jagdeo also addressed the issue of the review in his press conference. They all want a better deal for Guyana – money, safety, security, employment, et. al.
Doing a review of the project from scratch would be a total waste of time and money and such a review would probably take years? Is the goal to stop the project or proceed with its completion and seek increased revenues for Guyana’s development? The bottom line for Guyana is an increase in royalty revenues, reduction in wasteful (padded) expenditures, and increased profit. It is also to secure and increase local content not only in supplying roti, dhal, bora, pumpkin, and bhaji but also training and utilizing Guyanese technical manpower. We don’t have petroleum and geo engineers in Guyana. But we can start training Guyanese for fieldwork; not every oil or gas field worker is a college engineering grad.
The review should focus on ensuring that the project is ‘relatively safe’ and that it maximizes benefits and minimizes risks to Guyana – cross the ‘Ts’ and dot the ‘Is’ so to speak. The nation would not be interested in the technical aspects of the contract, the type and quantity of pipes, and drills, storage tanks, etc. – that is for the petroleum, electrical, civil, and geo or environmental engineers. Since it is established that the Redford team is not an engineering body, it would seem that their expertise would be primarily to review the legal aspects of the contract and give advice accordingly; ten days would seem sufficient for such a review but it will not hurt to have a technical team look at those aspects of the production especially for safety considerations. (Guyana must not be liable for blowouts, accidents, oil spills, and the like). Technical aspects of the project have to be left to the expertise of Exxon – I don’t know if Jan Mangal, Melinda Janki, and other critics would want to join in technical aspects of review after the report is delivered. They can point out all the missing aspects that should be raised with Exxon or can be included in the renegotiated contract. Guyanese lawyers and economists or others and or negotiators can also give an input after receiving the report from the Redford Review Team.
But the important question is would a review lead to a renegotiation of the contract? Exxon wishes quick approval so that it can proceed with rapid recovery of oil which is also in the short term interest of Guyana to increase revenues to erase debts accrued over the last five years. Increased revenues will also help with funds for our development. On this point, Vice President Jagdeo is right to move with speed on the review. But the government must also satisfy the demands of the country with greater revenue sharing.
Yours faithfully,
Dr. Vishnu Bisram
