Introduction Today’s column wraps-up my consideration of absorption capacity. This is the fourth on the list of top-ten development challenges, which spending Guyana’s expected significant Take (petroleum revenues) has to navigate in coming years in order to achieve sustained development.
Introduction Today’s column continues the discussion on absorption capacity. This is on my list of top-ten development challenges, which spending of Guyana’s expected significant Government Take from first oil and first gas will have to contend with, starting 2020.
Introduction Today’s column starts my discussion of the fourth of the top-ten development challenges that spending of Guyana’s expected significant “Government Take” will have to navigate in the coming years of oil and gas production and export.
Introduction To recall, today’s column wraps-up the discussion of the Governance Curse. This topic was identified as one of the strategic development challenges that the Government of Guyana (GoG) faces as it plans to spend its coming sizeable petroleum revenues.
Introduction Today’s column wraps up my discussion of the Resource Curse. This is the second of the top ten development challenges, which I have said the Government of Guyana’s (GoG) spending of fiscal take from its oil wealth has to navigate in the coming years.
Introduction Today’s column considers the second topic in my list of the top ten developmental challenges, which the spending of Guyana’s significant estimated Government Take from the petroleum sector must navigate.
Introduction: Top Ten Last week’s column wrapped-up my evaluation of Open Oil’s financial modeling of Guyana’s 2016 Production Sharing Agreement (PSA) with the local ExxonMobil subsidiary and its partners.
Today’s column continues with my critiques of Open Oil’s financial modeling of Guyana’s 2016 Production Sharing Agreement, PSA.
Introduction Within hours of the publication of my last Sunday’s Stabroek column, where I had indicated my intention to write a “three-part review of Open Oil’s reported financial modeling exercise of Guyana’s 2016 PSA”, its Founder and Author of the exercise wrote to the Stabroek News Editor “to correct some inaccuracies” (letter published, Monday, May 7, 2018).
Introduction Since its appearance in mid-March several readers (I suspect largely students) have been urging me to appraise and/ or review the recent financial modeling exercise carried in sections of the media, and which has been conducted by Open Oil, on Guyana’s 2016, production sharing agreement, PSA.
Introduction This week’s column wraps up the ongoing discussion from an economic perspective of the last remaining of the five items, which that I had earlier identified from Guyana’s fiscal regime for its 2016 production sharing agreement, PSA.
Introduction Last week’s column addressed two of five topics singled out earlier for comment in order to highlight their significance from an economic perspective; namely 1) Government take/developmental benefits/economic profit; and 2) accounting for costs.
Introduction Today’s column along with the next portrays selected aspects of my recent discussion of the fiscal regime in Guyana’s 2016 Production Sharing Agreement (PSA), from the perspective of basic economic principles.
Rational incentive Based on the economics Nobel Prize winning theory of “incomplete markets”, my previous column posited that, the Parties to Guyana’s 2016 PSA have a rational incentive to re-negotiate the contract, if underlying conditions of the country’s petroleum sector drastically change.
Introduction The observation was made much earlier in the series and repeated for emphasis last week: Guyana’s present petroleum fiscal regime encompasses both 1) its basic constitutional, economic, financial, and accounting legislation, as well as 2) the specific terms and conditions enshrined in the 2016 Production Sharing Agreement (PSA).
Introduction Last week’s column identified several of the ‘known unknowns’, as these are termed in strategic management.
Introduction As far as I can determine, a standard formulation of Guyana’s fiscal regime for its petroleum sector would describe this as ‘The Terms and Conditions that are applied to both the Owner (State) and Contractor (Exxon and its partners) for conducting their business within an integrated framework; from exploration activities, right through the production chain (upstream to downstream), as well as trading’.
Introduction Last week’s column established that the mechanism of ring-fencing for determining recoverable cost is not, unambiguously, to Guyana’s benefit.
Introduction Following on several readers’ queries, perhaps I should indicate that I am by no means singular when treating cost recovery as a central component of the fiscal regime of petroleum producing countries.
Introduction: Catalogue The catalogue of desirable features energy economists promote for effective PSAs are that 1) ownership of the petroleum wealth should remain within the domain of the country in which it is discovered; 2) the State/Principal should maintain managerial control of this wealth, but 3) the Contractor/Agent (in Guyana’s case Exxon and its Partners) should maintain operational control of contract-assigned petroleum activities.
Introduction Last Sunday’s column introduced a simple basic ‘Setting’ (as energy analysts label it) or more commonly, analytical framework drawn from energy economics, under which the Guyana 2016 Production Sharing Agreement (PSA) will be appraised in coming columns.
Introduction From their very inception, oil agreements/contracts have embodied dynamic processes between states, as sovereign owners or guarantors/regulators of rights to a country’s petroleum wealth, and individuals/oil-companies that contract to develop this wealth.
Introduction Production sharing agreements or contracts (PSAs), have been, from the time of their earliest introduction to the oil and gas sector, subjected to in-depth critical analyses and/or evaluations from economic, legal, and institutional perspectives.
Introduction Last week’s column welcomed the coming release of Guyana’s petroleum contracts. It also identified that, based on the standard industry classification, there are four principal types of such contracts.
Introduction Last week’s column had raised an outside-the-box consideration, which is that Guyana’s best use of its coming petroleum benefits/revenues might well lie in their utilization as strategic spending on renewable energy.
Decision Rule 3 Last week’s column continued the exploration of Guyana’s natural gas prospects, both “associated with/and not associated with” its recent substantial petroleum finds.
Introduction Last week’s column had raised the conundrum: What next? Given that, I am advising against state investment in oil refining therefore, what other major options I am recommending for realizing the substantial potential of Guyana’s recent petroleum finds.
Introduction As matters presently stand, and in order to be precise as well as taking into account the discussion concerning a Guyana state-owned oil refinery has lasted for several weeks (since August 20, 2017) it is perhaps prudent that today’s column starts by summarizing my two recommendations.
Today’s column concludes my discussion of Decision Rule 2, which posits: there is no overall economic justification for a Guyana state-owned oil refinery (of approximately 100,000 barrels/day).
Introduction Today’s column, and the next, continues to evaluate the feasibility of a Guyana state-owned oil refinery, promoted by many as the leading edge of a local content requirements (LCRs) regime aimed at maximizing downstream domestic value-added in the coming petroleum sector.
Introduction In last week’s column I sought to recall, for the benefit of readers, several key observations and conclusions that were drawn from my earlier review of refinery economics in order to support Decision Rule 2.
Introduction Last week’s column was aimed at walking readers who are unfamiliar with economic feasibility studies, through the PowerPoint presentation by Pedro Haas of Hartree Partners, on the feasibility study for a state-owned Guyana refinery.
Introduction Today’s column aims at walking readers through the Guyana Refinery Study, presented in a talk by Pedro Haas of Hartree Partners, in May this year.