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‘I don’t feel bad about Guyana’s oil deal’ Aug 06, 2024 News, Peeping Tom …ExxonM negotiator tells Bloomberg of lopsided contract “I have examined my conscience about it over a period of time, but I don’t feel bad about it…It was a complete fit for what we knew and what we didn’t know,” Rod Limbert, geoscientist and former Exploration Manager for South America for ExxonMobil Kaieteur News – Former Exploration Manager for South America for ExxonMobil and geoscientist, Rod Limbert was quoted in a recent Bloomberg article stating that he does not feel bad about the oil deal Guyana signed onto with the United States oil giant. Former Exploration Manager for South America for ExxonMobil, Rod Limbert U.S based media company, Bloomberg in a recent report, “The untold story of how Exxon scored a US$1 trillion oil bonanza that 30 rivals passed up” by Kevin Crowley, highlighted the story of the Stabroek Block which is now producing over 600,000 barrels of oil per day from just three projects ( Liza Phase 1, Liza Phase 2 and Payara). Exxon controls the block that holds 11 billion barrels of recoverable oil, worth nearly US$1 trillion at current prices. Limbert was part of Exxon’s team that negotiated the Production Sharing Agreement (PSA) for the Stabroek Block which was later signed in 2016 by the previous APNU+AFC administration after oil was discovered offshore Guyana in 2015. The PSA for the prolific Stabroek Block has been at the center of contentious debates with experts as well as citizens citing that Guyana signed onto a deal that benefits the oil companies more than the country. While Guyanese leaders have long accepted the lopsided nature of the deal, it remains in place as, ExxonMobil Guyana Limited (EMGL) and its partners Hess Guyana Exploration Ltd. and China National Offshore Oil Corporation (CNOOC) Petroleum Guyana Limited continue to benefit from it. Former Minister of Natural Resources, Raphael Trotman, who served under the APNU + AFC Coalition government between 2015 and 2020, was the one who signed the heavily criticized lopsided PSA with Exxon. The 2016 deal gives Guyana an industry-low 2% royalty. Presently, Guyana shares revenue with ExxonMobil after the company deducts 75 percent towards the costs incurred to develop the resources in the Stabroek Block. This arrangement, with the lack of ring-fencing, sees Guyana paying for projects that are yet to begin production activities. Each month bills from future producing developments are added to the list of expenses to be cost recovered by Exxon. After the 75 percent is deducted to pay back the oil company, Guyana then shares 50/50 of the 25 percent remaining with Exxon as profits. This amounts to 12.5 percent of profits from the operations. Bloomberg reported that Guyana has become the bedrock of Exxon’s post-Covid corporate revival. The Texas oil giant has a 45% share of a field that costs less than US$35 a barrel to produce, making it one of the most profitable outside of Organization of the Petroleum Exporting Countries (OPEC). With crude currently trading at US$85 a barrel, the oil field would make money even if the transition from fossil fuels caused demand to collapse and prices dropped by half. The report states that Exxon’s rivals no doubt have aching regret. Almost 30 other companies, including Chevron Corp., passed up the chance to buy into the Guyana discovery. Shell Plc, previously a 50% partner, walked away. Chevron is now paying US$53 billion for Hess Corp., which has a 30% stake in the project. Exxon this year filed an arbitration case against Hess, claiming it has a right of first refusal over the stake. (Hess says that right doesn’t apply in a merger.) It was reported that like many geoscientists, Limbert knew that the source rock for Venezuela’s oil—the La Luna formation—extended under the Atlantic into maritime territory held by Guyana, Suriname and French Guiana. The straight-talking Australian became fascinated with an onshore discovery in Suriname in the 1960s, when villagers accidentally found what became a billion-barrel oil field while drilling for water in a schoolyard. Limbert thought the schoolyard’s oil had originated off Guyana’s continental shelf and migrated more than 100 miles onshore over millions of years. He took the idea to the Exxon team responsible for entering new basins in mid-1997. “They had a picture of a downward-pointing thumb at the end of their presentation,” Limbert says. He contacted Guyana’s government about acquiring drilling rights anyway. “I just didn’t tell anyone,” he says. In 1997, Guyana was one of the poorest countries in South America, still suffering from the socialist and isolationist policies of strongman Forbes Burnham, who rose to power soon after independence from the UK in 1966.  Limbert and two colleagues flew from Houston to Georgetown to acquire old well logs and discuss the potential for drilling rights with the Guyana Geology and Mines Commission (GGMC). “The ground floor was literally the ground floor,” Limbert says. “By that I mean the desks and chairs were on the dirt.” The Exxon team also met Samuel Hinds, Guyana’s president at the time who talked mostly about cricket, Guyana’s national pastime. “I wasn’t in any particular hurry to talk about business, because I had no authority to do anything,” Limbert says. On returning to Texas and armed with fresh data, Limbert won permission to begin contract negotiations for exploration rights. Citing the legions of failed wells, Limbert pushed for and won a highly favourable deal. The Stabroek block offered to Exxon was more than 1,000 times bigger than the average oil block in the Gulf of Mexico. It required no upfront payment, and if Exxon struck oil, the company would keep 50% of the profit after deducting costs. The Bloomberg report states that Guyana later received heavy criticism for the contract. “I have examined my conscience about it over a period of time, but I don’t feel bad about it,” Limbert says. “It was a complete fit for what we knew and what we didn’t know.” It was stated too that the deal helped the government in another way. Guyana faced serious border disputes both with Suriname to the east and Venezuela to the west. Aligning with Exxon would mean anyone picking a fight with Guyana would also be picking a fight with the world’s most powerful oil company. Related Similar Articles

At current rate of production oil in Liza 1 & 2 could be drained before 20-year lifespan Aug 06, 2024 News Source: Liza Two FDP Kaieteur News – The Liza One and Liza Two projects in the Stabroek Block are both currently operating above the design rate outlined in the Field Development Plans (FDPs), sparking concerns about the early depletion of resources from the developments. Each project has a 20-year lifespan, but with American oil giant, ExxonMobil pushing the Floating Production Storage and Offloading (FPSO) vessels above the design rate, the oil in each field could be depleted long ahead of its time. Kaieteur News was able to secure copies of the FDPs for the Liza One and Liza Two projects, which revealed alarming details about the developments. The FDP is a technical document that provides detailed information on the project, including the design details, equipment and chemicals to be used during the operations and production profiles to guide the extraction of resources. According to the Liza One FDP, the project’s total reserves for developed resource are forecast to be 452 million barrels of oil (MBO) for a 20-year production period. The project, which commenced production in 2019, should have been producing 98 thousand barrels per day (kbpd) in 2024 (see table attached) but Exxon has pushed production to as much as 160 kbpd, according to information on the Ministry of Natural Resources website. Similarly, the Liza Two project which commenced oil production in February 2022 was expected to be producing at 211 kbpd this year but over 250 kbpd is being pumped daily by the American oil super major. The Liza Two field, according to the FDP has an expected production volume of 570 MBO. So far, it is unclear how much oil in total has been produced at each of the projects since startup. It is however clear that with Liza One producing a whopping 60,000 barrels above the design rate and Liza Two pumping 40,000 barrels extra daily, the lifespan of the two projects could be depleted well ahead of the 20-year lifespan. Source: Liza One FDP The higher daily production has not only sparked safety and environmental concerns as the country remains without an unlimited parent company guarantee to clean up and compensate after an oil spill, but has raised questions regarding the country’s ability to benefit from a greater portion of its oil wealth. Based on the 2016 oil contract Guyana signed with ExxonMobil, Hess and CNOOC, 75% of the monthly revenue is deducted by the companies to repay investments. The remaining 25% is shared with Guyana as profits. The country also receives an additional 2% as royalty every quarter. The country’s Vice President, Bharrat Jagdeo, who manages the oil and gas sector at a previous press conference, told reporters that in another few years, after Guyana repays Exxon and partners for the investments, the country will enjoy more profits. But with more oil being produced daily to help cover those expenses, it is unclear how the country would benefit more when the resources are likely to be depleted before the 20-year period. This is particularly alarming since the government is continuously approving more projects that often carry a higher price tag compared to previously approved developments. Related Similar Articles

Govt. looking to expand oil and gas operations to Berbice Aug 06, 2024 News Vice President, Dr. Bharrat Jagdeo Kaieteur News – The Government of Guyana is looking to extend its oil and gas operations to Berbice,  Vice President Bharrat Jagdeo has said. Speaking during his news conference last week, Jagdeo told the media that government is looking to migrate more of the oil and gas industry to the Berbice Region. “We believe that there will be more migration of the oil and gas industry to that region. Maybe if the large gas…second monetization of gas project comes onshore it will come onshore in Berbice, because that is the ideal location given that more of our gas finds have been in the Haimara area and Pluma.” Jagdeo went on to explain that, “wherever we put the deep water harbour now because there are some issues now with the mouth of the river too much sedimentation. So we are looking now at a cause way proposal which will build out to the Atlantic to the deep so that we don’t have to have dredging costs. So that four lane road would be good to move goods and services along that corridor.” At a previous press conference Jagdeo had stated that despite not finalising the National Gas Monetization Strategy, the Government of Guyana (GoG) has embarked on a second gas project to check for viability.  “We are still working on it. But as you have seen, we have moved forward in the project that we wanted to check the viability for. We have moved forward on that, but the gas strategy is a clear one,” he said. Jagdeo explained then that the key element of the gas strategy is to figure out how to monetise the associated gas outside of the current gas project.  “We have moved forward on that element,” Jagdeo stated. Presently, government is pursuing a US$2 billion Gas-to-Energy (GTE) project that will be located at Wales, West Bank Demerara. This is the country’s first natural gas project. It entails bringing the gas onshore from the Stabroek Block to feed a liquefied natural gas (LNG) facility and generate 300 megawatts from a power plant. ExxonMobil Guyana Limited (EMGL) is responsible for building a 12-inch pipeline that will transport 50 million cubic of gas per day to the Wales location from offshore. ,

Govt. to spend over $300M to repair 51 schools in Regions 2, 5 Aug 06, 2024 News Kaieteur News – Having been allocated approximately $74.4 billion from this year’s budget the Ministry of Education is gearing up to spend approximately $303,510,507 to rehabilitate a total of 51 schools located in Regions Two and Five. This is according to the award of contracts which have been published by the National Procurement and Tender Administration Board (NPTAB) office. According to the information provided the contracts are for nursery, primary and secondary schools in the two regions. For the nursery schools scheduled for repairs in Region Two, the contracts are as follow: rehabilitation of Mabel Sandy and Somerset & Berks Nursery Schools, this was awarded to P. Persaud Investment for $10,655,300; rehabilitation of Zorg, Affiance and Abram Zuil Nursery Schools, awarded to A&N Innovation and Construction Services for $12,158,850; rehabilitation of Ulele, Kabakaburi and Jacklow Nursery Schools, awarded to B.S Narine & Sons for $14,114,400; rehabilitation of Onderneeming, Lima Sands and Cotton Field Nursery Schools,  awarded to S Singh Contracting Service for $10,574,100; rehabilitation of Reliance Nursery School and Reliance Nursery Annex, awarded to SAAM General Contracting for $14,608,070; and the rehabilitation of Fisher and Maria’s Lodge Nursery Schools will be done by A&N Innovation and Construction Services to the tune of $6,341,500. The list of primary school that will be repaired are as follow: rehabilitation of Ulele Primary School was, awarded to Safraz Ally Construction  for $11,341,260; rehabilitation of St Monica, Siriki and Abram’s Creek Primary Schools, awarded to M.N Contracting and General Supplies for $12,135,128; rehabilitation of Tapakuma, Queenstown and Capoey, Primary Schools, awarded to Daywane’s Mechanic Shop for $12,326,365, rehabilitation of Fisher and Mashabo Primary Schools, awarded to Vin’s Construction & Supplies  for $10,927,050; and the rehabilitation of Aurora Primary School, was awarded to SAAM General Contracting for $7,573,500. Further, the various schools that will be repaired in Region Five are as follow: rehabilitation of Groden, Trafalgar and Litchfield Nursery Schools, the contract was given to Associate Investments for $11,398,900;  rehabilitation of Hopetown and Bush Lot Nursery Schools, awarded to HD Investment for $11,883,925; rehabilitation of Liberty Hall, Cotton Tree and Zee Zight Nursery Schools, awarded to James Nicholson Construction Services  for $10,906,930;  rehabilitation of Ithaca, Blairmont and Shieldstown Nursery Schools, awarded to T&A Construction Services & Supply for $8,513,000; and rehabilitation of Cottage, Carlton Hall and De Hoop Nursery Schools, the contract was awarded to Latchman Construction & Landscaping  for $13,553,050. As for the several primary schools in that region, the projects entail the rehabilitation of St.Francis, Moraikobai Primary School which was given to Charlie’s Construction Services for $12,362,750; rehabilitation of Karamat Primary School, awarded to James Nicholson Construction Services for $9,342,949; rehabilitation of Latchmansingh Primary School, awarded to RHR Enterprise for $8,999,900; rehabilitation of Cotton Tree Primary School, awarded to Quality Home Construction for $13,182,700; rehabilitation of Rosignol Primary School, also awarded to RHR Enterprise for $9,006,380; rehabilitation of Mahaicony Primary School, awarded to RHR Enterprise  for $10,937,820; and rehabilitation of No. 8 Primary School Region, awarded to RA & D Construction Firm for $6,464,200. Additionally, the rehabilitation of Belladrum Secondary School will be undertaken by Charlie’s Construction Services for $11,864,100; rehabilitation of Novar Secondary School, was awarded to RHR Enterprise for $10,009,450; rehabilitation of Mahaicony Secondary School will be executed by Charlie’s Construction Services for $12,280,600; rehabilitation of No.8 Secondary School will be carried out by RHR Enterprise for $7,822,950; and the rehabilitation of Woodley Park Secondary School will also be executed by Charlie’s Construction Services for $12,225,400. At a press conference in May, Minister of Education, Priya Manickchand mentioned that the government would be repairing and upgrading all schools across the country to ensure children are learning in a safe and comfortable environment. “In addition to building new schools what we are doing currently is repairing schools. The President has made it clear that he does not want any school to be without functioning washrooms and plumbing, electricity, a good roof where there is no leaking and [repairing] the dilapidated looking buildings. So across the country right now, the Ministry of Education is attempting to go out and receive bids for the repairs of all schools, nursery, primary and secondary,” the Minister had told reporters. Related Similar Articles

If Petroleum Commission was in place Guyana could have avoided audit controversies, failed oil block auction – PNC Aug 06, 2024 News Head of State President Irfaan Ali Kaieteur News – The political opposition is adamant that if Guyana had a Petroleum Commission in place the country could have avoided the current controversies regarding ExxonMobil’s illegal spending of the country’s oil funds as well as the recent failed oil block auction. Economist and advisor on oil and gas to the PNC Elson Low. Elson Low an economist and advisor to the Leader of the Opposition told this publication on Saturday that they are of the belief that the government is comfortable currently operating without the commission in place. “The PPP has consistently held the position that it is comfortable governing without a petroleum commission. We left a bill that could easily have been adapted rather than reviewing it and presenting it to Parliament they have completely dodged the issue.” Low lamented that the citizen of this country have had “four years of chaos because the PPP has no interest in principles of good governance. The result has been a failed oil block auction, audit controversy after audit controversy, no effort to engage the operator to get better for Guyana, environmental risks from potential oil spills and several other problems.” Hence the party remains firms in its position that all of these instances could have been totally avoided “if a professional petroleum commission was put in place early in their term. Instead, we have had the disastrous “Season of Jagdeo.” During his first press conference for this year Vice President, Bharrat Jagdeo assured that the government will honour its promise to have a Petroleum Commission when the time is right. Such a regulatory body is established by a government to oversee and manage the exploration, development, and production of petroleum resources within its jurisdiction. It ensures compliance with laws and regulations, manages licences and permits, and often plays a role in promoting sustainable and efficient utilization of petroleum resources.  In response to a question posed by this publication on when exactly the commission will be put in place, Jagdeo said that “The petroleum commission, we said we are building capacity in the Ministry (of Natural Resources).” Different song Months later with no apparent action on his promise this publication asked for an update on the progress so far and the VP is now singing a different song to say that independent oversight of Guyana’s oil and gas sector is not really necessary. Speaking at his at his weekly press-conference last Wednesday, Jagdeo said the PPP/C-led administration has done enough already to transparently monitor the oil sector.  “There is no magic with a Petroleum Commission”, Jagdeo told Kaieteur News in response to a question posed to him on when he will put the independent body in place. “There is no magic, we have given our agencies the tools to manage the sector.” The VP is of the view that a Petroleum Commission might not make any sense because the technical persons that will be nominated to sit on the body will be politicians too. “They would put a Vincent Adams, he is a great technical man although he is a politician (just) like how they put their executive member on the PPC (Public Procurement Commission) then say oh it acts independently- It’s a sham”, Jagdeo argued. Related Similar Articles

Car cleaner remanded to prison over gun, ammo possession Aug 06, 2024 Court Stories, Features / Columnists, News The remanded man, Dwayne Griffith Kaieteur News – A 68-year-old man residing on William Street in Kitty, Georgetown, was remanded to prison on Monday after he was charged with possession of an unlicensed firearm and ammunition. The defendant, Dwayne Griffith appeared before Senior Magistrate Fabayo Azore at the Georgetown Magistrates’ Court where the charge was read to him. It is alleged that on Saturday, August 3, 2024, a police mobile patrol responded to an assault report at the Red Dragon Bar on Robb Street, Bourda. Griffith was approached by the police and subsequently a search was conducted, during which a black SCCY 9mm firearm marked with #525358 and a magazine and eleven 9mm rounds, were found on his person.  When questioned about possessing a firearm license, Griffith responded, “no”. Following his arrest, he was taken to the Alberttown Police Station for further processing. During a video and audio interrogation, Griffith confessed to having the firearm and ammunition for self-defense purposes. He was remanded to prison until on August 26, 2024. Related Similar Articles