Introduction “You couldn’t do the math”, said Ambassador Perry Holloway in his interview with reporters published in Stabroek News last Tuesday December 9, 2018 as he exhorted us Guyanese to educate ourselves about the fortune coming our way from ExxonMobil’s oil.
Part 66 Introduction Mr. David Patterson, Minister of Public Infrastructure, offered a commendably prompt but strange response to last week’s column by way of his December 8 letter to the editor “The 2019 budgetary allocation has nothing to do with natural gas”.
Introduction Today’s column carries out a commitment I made in a letter earlier this week responding to a statement by Mr.
Introduction Figures contained in the 2017 financial statements of Esso Exploration and Production Guyana Limited indicate that the three-party set up of Esso, Hess and CNOOC Nexen will spend well over five hundred billion dollars ($500,000,000,000) up to December 2019.
Introduction It has been nearly a month since the last column appeared on October 19 under the title Complex for the White Man, Disdain for Locals.
Introduction During the recently-concluded United Nations General Assembly in New York, USA, the Guyana Delegation led by Foreign Minister Carl Greenidge facilitated a meeting between the Governor of the Bank of Guyana and representatives of Merrill Lynch, the investment arm of the Bank of America Corporation which had expressed an interest in Guyana’s proposed Sovereign Wealth Fund.
Introduction In an advertisement appearing in the national media yesterday, the Ministry of Natural Resources, on its own behalf and that of the Government of Guyana, invited expressions of interest by Consultants desirous of providing services to the Project Execution Unit, presumably of the Ministry, to “conduct an audit of the Recoverable Contract Costs as called for in the signed Production Sharing Contract(s).” It also requires the successful person or Firm to provide on-the-job training to the staff of the Guyana Revenue Authority (GRA) and the Office of the Auditor General (OAG) on cost recovery auditing, “with a particular focus on value for money.” The advertisement sets out the scope of the consultancy to include: 1.
Introduction Following last week’s call for a Commission of Inquiry into the Petroleum Sector, more than a handful of individuals approached me enquiring whether the call was serious and what would be the expected outcome.
Introduction It was good to see Dr. Mark Bynoe, Director/Head of the Department of Energy in the Ministry of the Presidency speaking publicly on the petroleum sector.
Introduction Amid all the noise about audits and Memorandum of Understanding, it is understandable and not at all surprising that a letter to the editor might have received less attention than it would have otherwise deserved.
Introduction It has been over one month since the Ministry of Finance tabled in the National Assembly a fifty-one page document which it claims presents “preliminary proposals” to stimulate discussion on its plan for managing the flows from petroleum operations following first oil estimated to flow by the end of the first quarter of 2020.
Introduction The 2016 Petroleum Agreement has been a source of grief, anger, disbelief and shock to the average Guyanese whether living inside or outside Guyana.
Introduction Recall that Column # 54 published in this column last week cited two Emancipation Day speeches, one from President Granger which was discussed at some length in the same column.
(Part 54) Introduction Events marking Emancipation Day saw two significant statements from two leading Afro-Guyanese leaders, President David Granger and Professor Clive Thomas.
Introduction Surprise would be a mild word to describe the reaction of many Guyanese to the report by Minister of State Joseph Harmon that President Granger had appointed Dr.
Introduction I will resume the piece on Getting the work done next week to allow me in today’s column to address the outpouring of anger and hurt expressed by politicians, columnists, letter writers and contributors in the print and social media over an article in the New York Times one week ago.
Introduction In the previous column in which I examined whether Guyana was prepared for First Oil in 2020, I wrote that the situation is not irretrievable but that “there need[ed] to be manpower changes and more leadership from the President.” I suggested that President Granger needed “to take charge before it is too late.” As if on cue, the President was reported on the same day expressing a high level of confidence that “by the end of August or thereabouts the Guyanese people will see a Department of Energy with which they are satisfied”.
Introduction Inspired by the May 20, 2015 announcement by ExxonMobil that it had made the largest discovery of petroleum resources for that year off the coast of Guyana, this column with the title Road to First Oil began, coincidentally, on May 26, 2017 and was expected to run for approximately twenty-five weeks.
Introduction We continue and conclude today on what is known as Sovereign Wealth Funds, essentially special purpose state-owned investment funds to achieve financial objectives using investment strategies, tools and instruments.
Introduction Column 40 noted that in practice, any Sovereign Wealth Fund for Guyana has to take a whole host of factors into account, including the country’s recurring deficits which are financed by loans; the deficit in its infrastructure; future revenue gains and losses; commodity prices including that of oil; and citizens’ rising expectations.
Introduction This column turns attention to the Environment Impact Assessment (EIA) for the Liza Phase 1 Develop-ment Project done by Environmental Resources Management (ERM) an external consultancy firm which describes itself as is a leading global provider of environmental, health, safety, risk, social consulting services and sustainability related services.
Introduction For a country that will soon become petroleum dependent, Guyana’s petroleum legislation is not particularly expansive.
Introduction After the major financial issue last week, we return today to the mundane issue of the provisions on non-associated gas in the 2016 Agreement which the three oil companies signed in June 2016.
Column 43 dealt mainly with Associated Gas and my plan was to deal with non-associated gas this week.
Part 43 One feature of the Esso/Hess/CNOOC 2016 Agreement – as indeed the 1999 Esso Agreement signed by President Janet Jagan – which has received little public attention is Gas which is addressed in Article 12 of both Agreements.
Introduction Column 41 which appeared two weeks ago looked at the paltry share capital of the three foreign oil companies which signed the 2016 Petroleum Agreement for the Stabroek Block.
Introduction Regulations made under the Petroleum Exploration and Production Act require the application for a prospecting licence to be accompanied by a statement giving particulars of the applicant’s financial status while in the case of a production licence, the application must give full information as to the applicant’s financial status.
Introduction In the course of his presentation of Budget Speech 2018 delivered on November 27, 2017, the Minister of Finance announced that the Government of Guyana would be partnering with the Islamic Development Bank (IsDB/the Bank), through the Malaysia Agricultural Research and Development Institute (MARDI), to update the expertise and technology in rice production through a Reverse Linkage Project to the tune of US$863,000.
Introduction In this the 39th column I wrap up the comparison of the 1999 and 2016 contracts by looking at Annex D which is completely new in the 2016 Agreement.
Introduction Column 37 which appeared last week dealt with the classification of costs and as indicated there, attention now turns to what Annex C describes as Pre-contract costs.
Strange numbers Size Column 36 published on Friday February 16, concluded the comparison of the 1999 and the 2016 Agreements proper.
Introduction Readers will recall that Article 27 – Applicable Law, was addressed in Column 29 which is available on the website of the Stabroek News as well as on chrisram.net.
Government inaction now constitutes force majeure! Today we take up from Article 24 which deals with force majeure, the definition of which is set out in paragraph 2.6.
Just a reminder that this series within a series seeks to compare the Janet Jagan administration’s 1999 Agreement with the Trotman 2016 Agreement and as we closed last week’s column we were on Article 20.
Part 33 Local Content Article 18 which deals with local content has been subject to a number of modifications, the first of which recognises that the activities will be carried out not by the Contractor but by an Operator appointed by the three companies making up the Contractor.
The March of Folly The 2016 Agreement places greater emphasis on “gas”, or more correctly, “associated gas”, compared with the 1999 Agreement, including superficially minor, but no less significant, changes to Article 11 – Cost Recovery and Production Sharing and Article 12 – Associated and Non – Associated Gas.
Part 31 Introduction I must start this week’s column by publicly complimenting the painstaking and excellent work done by the technical staff of Ram & McRae in comparing, line by line and word by word, the 1999 Janet Jagan’s Agreement with Esso and the Raphael Trotman’s 2016 Agreement with Esso (not Exxon), Hess and CNOOC.
Today’s column continues a review of the Esso/Hess/Nexen Petroleum Agreement signed on June 27, 2016 and publicly released by the Government of Guyana on December 29, 2017.
Part 29 Introduction In keeping with a recent undertaking, the Government of Guyana yesterday released the Petroleum Agreement entered into on its behalf by Mr.
Introduction The final, belated and reluctant admission by the Government of Guyana that it received a signing bonus from ExxonMobil, seems to have caused increasing curiosity, not least because the amount disclosed is a rather odd-sounding US$18 million.
New Account On the day this column appeared last week, the press in Guyana, in an outstanding case of enterprising journalism, confirmed that Guyana had indeed received a signing bonus from ExxonMobil.
Introduction This Column touched earlier on what the Model Petroleum Contract describes as a Stability Clause, the objective of which is to provide assurance to international oil companies that they will be protected from any variation in fiscal or economic policies by governments for a period of as much as thirty years.
Kudos, Cabinet Notwithstanding its extreme reluctance to release the contract signed by Natural Resources Minister Raphael Trotman with Esso Exploration and Production (Guyana) Limited and two Joint Partners some eighteen months ago, Cabinet deserves credit for its decision to make the contract public in December.
In Part 23 this column noted that Indonesia which had taken a lead role in the Production Sharing Contract (PSC) had moved to the Gross Sharing Production Sharing Contract.
Indonesia explores new model Indonesia, the country that is credited with giving the petroleum world the petroleum production sharing agreement (PSC) in the nineteen sixties, now seems to be walking away from the model.
Part 22 Oil and the Environment The title of this week’s column is borrowed from a presentation by Annette Arjoon-Martins, Mr.
Part 21 EITI Admission That troublesome confidentiality provision in the law and the Petroleum Agreement has once more attracted attention with the announcement that Guyana is now officially the 53rd candidate country of the Extractive Industries Transparency Initiative (EITI).
Introduction Column 19 last week summarised how petroleum produced is shared between the Contractor and Guyana represented by the Minister.
Part 19 Disposal of Production Recall that under a production sharing contract, costs are deducted from the value of production to arrive at profit oil to be shared between the contractor and the Government of Guyana in the proportion set out in the contract: Article 11.6.
Trotman and Turbot The good news This column keeps meeting distractions from week to week.