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Guyana should have received US$10B from oil to date but only received US$4.4B Oct 01, 2024 News Kaieteur News – The Ministry of Natural Resources (MNR) on Monday revealed figures which indicate that Guyana should have received US$10B from the production of oil in the Liza One and Liza Two fields to date. Minister of Natural Resources, Vickram Bharrat Due to the government’s failure to manage the sector prudently in the best interest of Guyanese however, the country gained a meagre US$4.4B since the startup of production activities in the Stabroek Block, operated by ExxonMobil Guyana Limited (EMGL). The ministry was responding to an article carried by Kaieteur News on September 22, 2024 under the headline ‘Guyana poised to receive less than US$9B of US$70B from Liza 1 and Liza 2’.  In the article, Kaieteur News showed that the two projects, which are currently in operation, have a combined reserve of about one billion barrels of oil. At an average oil price of US$70 per barrel, the two projects are expected to generate about US$70B. Using a breakeven cost of US$40 per barrel, it was outlined that US$30B would remain from which other costs would be deducted, leaving Guyana with only US$9B of the revenue. The Ministry however clarified that the breakeven cost substituted by the newspaper was incorrect as this was an average figure which applies to several developments offshore. “In July, ExxonMobil Guyana’s Vice President, Phillip Rietema, stated that the company’s operations are secure at a US$40 per barrel break-even price…the US$40 per barrel figure is an average break-even price that applies to several developments offshore, not specifically to Liza 1 and Liza 2,” the MNR statement said. To this end, the Ministry said the Liza One breakeven cost was US$35 per barrel, while the Liza Two breakeven cost is US$25. Notably, the break-even price is the minimum price at which the crude needs to be sold, to cover all the costs of producing it, the MNR said. This includes capital, operating, and other necessary expenses. While Kaieteur News arrived at an earlier figure of US$9B to be received in revenue from the two projects, the country should receive about US$20B according to the information supplied by the Ministry. Using an average of US$30 as the breakeven cost for Liza One and Liza Two, the projects are estimated to generate some US$40B in revenue at an average cost per barrel of US$70. The US$40B would have to be split between ExxonMobil and Guyana, meaning that the country should receive US$20B while the oil company should receive an equal sum. According to information displayed by the Bank of Guyana on the Natural Resource Fund (NRF), the country only received the sum of US$4.4B as at the end of June 2024. This is particularly alarming and raises further questions about the management of the sector, since 40% of the reserves have already been depleted to date. Liza One, which commenced oil production in December 2019, has already produced close to 200 million barrels of oil (MBO). The Field Development Plan for that project however indicates that the project, operated by the Liza Destiny Floating Production Storage and Offloading (FPSO) vessel, has a reserve of 452 MBO. This means that 44% of the reserves are already drained. Similarly, at the Liza Two project, the Ministry reported that almost 200 MBO have been produced by Exxon since the commencement of production activities in February 2022. That field, according to the FDP holds about 570 MBO. Consequently, 35% of the reserves have already been produced by the company. It could also be deduced that about 40% of the collective reserves at the two projects have been depleted. Due to the government’s failure to implement a ring-fencing provision, ExxonMobil uses revenue that should come to Guyana to fund its investments across the Stabroek Block. A ring-fencing provision would force the operator to use the revenue generated at one project to pay for its expenses. In the absence of this key mechanism, Exxon is allowed to take revenue from Liza One, Liza Two and Payara to develop its other projects. If those projects were ring-fenced, the country would have been receiving a greater share of profits today, since Exxon has already recovered over US$19B- the total cost of the three projects. Related Similar Articles

Foreigners cannot be excluded from benefits of subsidies to GPL-Jagdeo Oct 01, 2024 News Kaieteur News – The Government of Guyana has been heavily subsidising the Guyana Power and Light (GPL) and it claims that the efforts are to prevent a raise in the light bills of citizens.  Guyana’s booming oil industry has attracted a range of foreign companies coming into the country and setting up shop and at the same time driving up electricity demand.   Despite this, Vice President Bharrat Jagdeo told reporters last Thursday that they cannot be excluded from the benefits being derived from the government subsidies to GPL. Vice President Bharrat Jagdeo. At his weekly news conference last week, this news asked the Vice President why foreign companies operating here are not made to pay the unsubsidised electricity charges as they are in most cases the biggest consumers of electricity. Jagdeo responded saying: “We can have people come and say we will charge two electricity rates, now one for Guyanese and one for foreigners and the foreigners must come and bring a document every week and show whether they are foreigners or not or every Guyanese will have to then prove that they are Guyanese and prove that they are Guyanese to benefit from the electricity subsidy.” Labeling the separation of rates an administrative nightmare, he said the foreigners will very well put the meters in the names of Guyanese citizens to be able to enjoy the rates, adding that targeted subsidies are a nightmare. Jagdeo to let his point hit home took the reporter on a history trip back to the time when old age pension was awarded based on a “means test”. Back then, the less you earned the better your chances were of getting the pension and the monthly earnings in the 90’s was about $16.” “We abolished the mean test so if you reach 65, you get the old age pension. Some of the rich people will get it too but it is administratively easier to do that and you don’t have the corruption,” Jagdeo stated. On May 27th 2024, this publication reported that for the past five years, the cost of fuel has increased significantly with some $49.151 billion to be spent by the Guyana Power and Light (GPL) to purchase fuel for its operations. This information was taken from GPL Performance Statistics. The document stated that some 1,354,700 barrels of Heavy Fuel Oil (HFO) and Light Fuel Oil (LFO) were purchased by the state entity to the tune of $16.171 billion. With increases recorded annually since then, it was stated that this year, GPL will purchase 2,191,585 of barrels of HFO and LFO, at the cost of $49.151 billion (US$228.34 million). The weighted average fuel price per barrel is US$104.19 – the document states. In 2022, GPL had announced that the steady rise in fuel prices is negatively affecting its operations. In fact, it was stated that if the trend continues, generating costs are expected to trump revenue earnings. In June of this year, the VP had told reporters that he was informed that there is a need for US$66M as what the GPL budgeted for did not cater for the fuel price increases. “But we are not increasing the price of electricity in another country, they would have increased the price of electricity. So that means before the end of the year, we’ll go to Parliament for a supplementary of US$66M for just subsidizing electricity,” he added. The VP boasted that the government has absorbed the price increases that should have come from electricity since the price of fuel has gone up. “So the price of fuel went up from $70 dollars that we were budgeting; now, we are paying one $105 maybe $110 per barrel. We have to go to the parliament for the recess because of just fuel prices.” In April, the government, through GPL, signed a multi-million-dollar contract with Urbacon Concessions Investments, W.L.L (UCI), a subsidiary of UCC Holdings in Qatar, in collaboration with Karpowership International to rent the ship for two years. The floating power plant arrived in Georgetown in May and was docked at Everton, East Bank Berbice in Region Six, and eventually connected to the Demerara-Berbice Interconnected System (DBIS). The government procured the services of the energy vessel to bring relief to citizens since there has been an increase in electricity demand, which led to shortfalls and constant power outages across the country. Tags: Jagdeo, GPL, foreigners, subsidies, power Related Similar Articles

Govt. spending US$16M to buy helicopters for GDF  Oct 01, 2024 News Finance Minister, Dr. Ashni Singh and US Ambassador to Guyana, Nicole D. Theriot were on hand to witness the signing of the purchase deal Kaieteur News – The Government of Guyana on Monday signed a US$16 million contract with Bell Textron Inc. for the supply of two advanced rotary wing aircraft. This milestone agreement not only enhances the capabilities of the Guyana Defence Force (GDF) but also serves as a testament to the strong bilateral relationship between Guyana and the United States of America (USA), the Ministry of Finance said in a press release. Overseeing the signing on behalf of the Government of Guyana was Senior Minister in the Office of the President with Responsibility for Finance and the Public Service, Dr. Ashni Singh. Also witnessing the signing, were US Ambassador to Guyana, Nicole D. Theriot; Chief of Defence Staff of the GDF, Brigadier Omar Khan and other officials of the Ministry of Finance, the GDF, and the USA Embassy. Minister Singh said that the signing represents yet another installment in the government’s very significant investments in the capitalization and recapitalisation of the GDF. He detailed that by the end of this year, the Government would have spent almost $32 billion on investments in capital assets for the GDF.  These investments are targeted towards improving all aspects in the Force’s operations (Air Corps, Marine, Infantry, etc.) as well as supporting surveillance of Guyana’s Exclusive Economic Zone and joint service operations. Further, on behalf of President Irfaan Ali and the Government and People of Guyana, Minister Singh registered the highest level of importance the Government places on the very special relationship shared with the USA and emphasised that the signing is yet another step in further strengthening and deepening relations between the two countries. He noted that during the three years from 2021 to 2023, Guyana received US$15.4 billion in foreign direct investment from the USA, representing approximately 96 percent of total FDI over that period. Over the same period, the USA accounted for 13 percent of all exports from Guyana and 17 percent of all imports into Guyana, making the USA Guyana’s largest trading partner. Dr. Singh also used the opportunity to thank the Bell Textron’s team for the support they have given to Guyana thus far and reiterated that the Government looks forward to seeing more USA companies investing in Guyana and doing business in Guyana and with Guyanese companies. According to the press release for her part, Ambassador Theriot expressed that “this partnership represents more than just a commercial transaction. “It speaks directly to the core values and priorities that define the relationship between the United States and Guyana, and it underscores our mutual commitment to safety and security. These Bell helicopters enhance Guyana’s capabilities in disaster response, search and rescue, and overall public safety – it is an investment in protecting the lives of the Guyanese people. Coupled with training and maintenance, these aircraft will bolster Guyana’s ability to respond to emergencies swiftly and effectively,” the US ambassador said. Further, Ambassador Theriot said that “Today’s ceremony marks a significant advancement in our bilateral relationship.  The United States remains committed to being a reliable, trusted partner to Guyana, and today we strengthen the foundation of that collaboration.” Brigadier Omar Khan, MSS expressed that “this agreement is not merely us pursuing our defence objective to enhance our rotor-wing capability. In the main, it represents Government’s consistent approach to recapitalising the Force through strategic acquisition and infrastructure development. Notably, for this particular product, the GDF has been operating the Bell brand since the 1980s with the initial purchase of five (5) aircraft during that period. A further two similar brands were purchased in 2007, and an additional two were acquired in 2021 and 2023. While the Force only has one (1) Bell product in service to-date, the acquisition of two (2) more comparable products will better position the Force to enhance the conduct of missions in remote areas of our country.” The new rotary wing aircraft will empower the GDF to effectively conduct a range of missions, including search and rescue, disaster relief, and border security operations, the chief-of-staff said. Equipped with the most recent of modern technology, these helicopters demonstrate the proactive steps the Government of Guyana is taking to strengthen its defence capabilities and ensure that Guyana remains prepared to address emerging challenges. “The signing of this contract goes beyond the delivery of rotary-winged aircraft; it also encompasses comprehensive training and maintenance support for these aircraft from Bell Textron Inc, ensuring that the GDF can maximize the benefits of this investment for years to come. In addition to company support for the two helicopters under contract, the U.S. Embassy, in coordination with U.S. Southern Command, approved funding for a U.S. Air Force team to provide operations, logistics and maintenance training to the GDF Air Corps to strengthen their ability to sustain the air fleet,” Brigadier Khan said. The Region Sales Manager of Bell Textron Inc., Mr. Michael Aguilar expressed gratitude to the Government of Guyana and the GDF for their decision in relation to the acquisition of the two new aircraft and underscored the company’s interest in future supporting Guyana to strengthen its defence capabilities. The Government of Guyana remains dedicated to building a secure, stable, and prosperous nation. By forging strategic partnerships and investing in advanced defence capabilities, Guyana aims to safeguard its people while actively contributing to regional peace and stability. This commitment reflects the nation’s vision for a collaborative and secure future for all its citizens and neighbours. Related Similar Articles

One house destroyed, three others damaged Oct 01, 2024 News …as fire sweeps through sections of Hadfield Street A completely destroyed Hadfield Street house. Kaieteur News – A house was destroyed completely and three others damaged after a pile of garbage was maliciously set and left unattended at SS Hadfield Street, Wortmanville, Georgetown on Friday. The Guyana Fire Service (GFS) on Monday reported that the fire quickly spread from the rubbish heap to a nearby single-storey wooden house owned by 60-year-old Nigel Berkshire, who lived there with 68-year-old Terrence Moore. The structure was destroyed completely, leaving both men homeless. “The fire was maliciously set in a pile of rubbish that was left unattended and quickly spread to the building, causing the structure to ignite,” GFS said. Three adjacent houses were damaged. One of the houses owned by Elliot and Tenisha Berkshire, suffered significant damage, while the second house owned by Maurice (surname not provided) suffered minor damage. The third house owned by Robert Ross and occupied by Sharmin Mustapha, experienced minor damage with a number of louvre window panes being damaged as a result of the intense heat. Firefighters were able to extinguish the flames before the houses were destroyed. The Fire Service said that after it received a distress call at 16:08 hrs, multiple water tenders and firefighters were dispatched to the scene. Water Tenders #95 and #118, along with seven firefighters led by Section Leader Sparman and Leading Fireman Henry, arrived at 16:10hrs. The fire units contained a total of 19,274 liters of water, which was utilized in the initial firefighting efforts until an open water source was found. Firefighters initially deployed two jets from light pump #A7 and Water Tender #118 to fully extinguish the fire. Related Similar Articles