Guyana News Updates, June 27, 2022

Caribbean diaspora webinar on shaping US-Caribbean policy: Atlantic Council and Caribbean Policy Consortium

Wednesday, June 29, 2022 @ 3pmET

 

 

 

Regional energy strategy to soon be presented- will develop Caribbean nations’ economy – President Ali – Department of Public Information, Guyana

 

Countries depending on oil can brace for lower revenue – EITI report: Kaieteur News

As countries around the world speed up the transition to renewable energy, the Extractive Industries Transparency Initiative (EITI), a global watchdog for the governance of oil and gas and mineral resources, in its 2022 Progress Report has highlighted that oil producing nations that depend on revenue garnered from the sector can brace for a decline from that stream. Guyana, being a fairly new kid on the block when it comes to the production of oil has been pushing to speed up production rates, with the backing from United States oil giant, ExxonMobil.

 

Fire Juggling In The Energy Sector: Part 2 by Lorraine Sobers

  

Guyana could earn GY$136B (US$650m) through local content by year-end – Pres. Ali – News Room Guyana

 

Govt not satisfied with CGX’s pace in constructing deep-water facility – Min Bharrat – Guyana Times

 

Review of the Consolidated Financials of EEPGL, Hess and CNOOC: FY 2020 and FY 2021 [Part 2]: Guyana Chronicle

THE total assets for the oil companies grew from $1.2 trillion in Financial Year (FY) 2019 to $1.9 trillion in FY 2020, representing an increase of $641.5 billion or 55 per cent. Total liabilities grew from a position of $651.4 billion in FY 2019 to $763 billion in FY 2020 representing an increase of $111.7 billion or 17 per cent and 54 per cent of total assets. Total equity increased from $546.7 billion in FY 2020 to $1.129 trillion in FY 2021 representing an increase of $581.7 billion or 106.4 per cent and 46 per cent of total assets.

 

Local economy thrives in first quarter of 2022: Guyana Chronicle

THE first quarter of 2022 was a productive period for Guyana’s economy, which recorded positive economic growth on account of sustained production in the oil and gas sector, and positive output performances in the non-oil sectors. “As oil and gas activities continued, the non-oil economy experienced moderate growth on account of economic activities regaining momentum from the full reopening of the economy, coupled with fiscal measures to alleviate the rising costs of production and services,” the Bank of Guyana reported in its quarterly update which was published recently.

 

A neutral forensic audit of all costs of Exxon’s operations is criticalStabroek News (Letter to the Editor) by Vishnu Bisram (PhD)

Reference is made to several recent reports (including a statement by GRA’s Godfrey Statia) and commentaries relating to royalty and whether it is recovered as company costs for operations. In Guyana, everyone is an economist, including many who never took an economics course or read an economics book or magazine. Worse, everyone is an oil expert. The public is misled by uninformed information about royalty and profits as well as oil economics. For clarification purposes, royalty refers to payment by a company or business for use of the state’s or someone else’s resources and is not recoverable as a cost. However, for tax purposes, it is computed as a business cost.

 

Stabroek Block royalties not part of cost oil – Guyana tax boss: OilNOWGuyana Times   

Commissioner-General of the Guyana Revenue Authority (GRA), Godfrey Statia said on Saturday that royalties paid by the Stabroek Block consortium are not allowable in the calculation of cost oil. The tax boss explained this in response to “misinformation” in the local press about the petroleum tax regime and the petroleum cost recovery regime in the Stabroek Block production sharing agreement (PSA). These provisions govern four approved and sanctioned projects that together, will carry combined production capacity of 830,000 barrels of oil per day by

 

Works commence on US$300M shore base facility for ExxonMobil: iNews

Just days after the sod was turned for the construction of the US$300 million shore base facility for ExxonMobil at Port Vreed-en-Hoop, the dredging of the area commenced on Thursday as per scheduled. 

 

Tom Mitro failed to prove Guyana losing big on cost oil deductions: OilNOW (Columnist) by Joel Bhagwandin

I am tired of responding to first world “so called experts” who have their own agenda and based on their absurd pronouncements on Guyana’s affairs, probably believe that we are an uneducated population and lack critical thinking abilities.” I will never stop, however, to challenge, expose and discredit their arguments and pronouncements because that notion is not true, and I will never allow these foreigners to treat us as such. It is totally disrespectful and derogatory on their part, and what’s even worse, local media houses give them a platform to propagate their nonsense.

 

‘No path to net-zero without using gas as transition fuel’ – VP Jagdeo: OilNOW

As the world charts a path forward to net zero by 2050, some environmentalists argue that countries should leave the natural gas in the ground and move straight to renewable energy. But Guyana’s Vice President Dr. Bharrat Jagdeo argues that natural gas is the most feasible energy source in the world and that the South American country plans to use it as a catalyst to transition the nation’s energy sector into renewables. “There is no pathway to net zero without using gas as a transitional fuel. Everybody has accepted that, including the US government – which, before COP26, was not accepting that… The whole world has now concluded that,” the Vice President related during a recent press conference.

   

Chemical spill reported at Exxon’s Stabroek block operationsKaieteur News

– Minister Bharrat says EPA dealt with matter

Approximately 925 gallons of chemical asphaltene inhibitor is said to have spilled during its supply to one of the floating production storage and offloading (FPSO) involved in oil production in the offshore Stabroek Block. Information reaching the newspaper is that the 925 gallons, approximately 18.5 barrels of the chemical was being delivered from a supply boat when a leakage seemed to have occurred. “A supply ship was discharging chemicals to the FPSO and approximately 925 gallons were spilled which is around 18.5 drums.

 

‘Contract with Exxon makes a mockery of our constitution’Kaieteur News

– Yog Mahdeo says deal attempts to shackle govt. into more unfair provisions

The Production Sharing Agreement (PSA) that the government signed with US oil major ExxonMobil is a mockery to the country’s constitution as it attempts to shackle this country into more unfair provisions or benefits for the petroleum companies operating in Stabroek Block. This is the view of Dr. Yog Mahadeo, a transparency advocate and co-founder of the civil society body- Article 13. He gave this conclusion in an invited comment yesterday while citing the necessity for the contract to be renegotiated.

 

Exxon contract silent on whether royalty is recoverable: Kaieteur News (Repeat)

– but clearly states what can or cannot be deducted

The Production Sharing Agreement (PSA) that Guyana signed with ExxonMobil subsidiary Esso Exploration and Production Guyana Limited (EEPGL) and their partners for the Stabroek Block, Hess Guyana Exploration Limited is very specific on cost recovery. Under the terms of the PSA signed in 2016, up to 75 percent of the gross production of crude oil can be deducted as cost oil for expenses. In that PSA, there are essentially two categories, spending that can be recovered by the contractor, “without the Approval of the Minister,” instances where deduction can be made subject to the approval of the minister.

 

‘Elections COI should be free from political interference’: Kaieteur News

– Article 13 urges clear Terms of reference

Article 13 has congratulated President Irfaan Ali for taking what they called a “bold step” towards the establishment of a Commission of Inquiry (CoI) into the contentious 2020 General elections. The body’s comments come just weeks after the civil society group had signaled its intention to lobby the diplomatic community to get the government interested in such a probe. Article 13 Co-founder, Yog Mahadeo told the newspaper that after a two-year struggle and demand for an investigation into the Guyana Elections Commission (GECOM) and the 2020 Elections, “we are happy to see that the President has named the Commission of Inquiry.

  

PAY-ON-BEHALF AS A TAX CONCEPT? IT IS A FRAUD: Kaieteur News (Letter to the Editor) by Mike Persaud

The Executive branch of government and the GRA, a government agency, have finally decided to come clean on some very important provisions on the Oil Contract. They are at once revealing – and they are outrageous frauds and violations of all standards of decency. How well known is the Pay-on-Behalf concept in Oil Contracts – as in ‘GoG is required to pay Oil Companies’ legal obligations to itself’? Further GoG is required to pay it out of its (GoG’s) share of profits. From Commissioner Statia’s press release, it goes like this: Oil Companies figure out their tax liability, prepare a tax invoice, send it GoG – and the GoG, with no money received, issues a tax receipt for the full amount of taxes due.

 

We did not need Vice News to tell us that our politicians are corrupt: Kaieteur News (Letter to the Editor) by Gerald A. Perreira, Organization for the Victory of the People (OVP)

First, let me be clear, the agenda of the Organization for the Victory of the People (OVP) is not set by Vice News. This US based media outfit is well-known for going into so-called Third World countries such as Guyana, with their Western bias and agenda… We must demand an answer from APNU+AFC Minister of Natural Resources, Raphael Trotman, as to who ordered him to sign the treasonous contract, one of the most exploitative and lop-sided contracts in the history of the global oil and gas industry, with the US imperial entity, ExxonMobil.

 

Seventeen reasons why the ExxonMobil contract should be renegotiated: Kaieteur News (Letter to the Editor) by Joe Persaud

In my opinion, this contract should be considered null and void for the following interim reasons:

1) This contract was not made in good faith, good intention, is biased and is not consistent with minimum international contracting requirements, practice, guidelines, procedures and laws. 2) This contract is a production sharing contract/royalty (PSA), where Guyana is technically a partner, a beneficiary, and must have a full time staff/inspection for verification of quantities/quality of the product, all resources, all works and costs, from the upstream to midstream to downstream.

 

Hubu joint venture has big aquaculture plans: Stabroek News  

-drones, sensors to be part of `organic’ rearing

-hoping to target 30% of UK prawns market

The US$25m Hubu Aquafarms joint venture aims to revolutionise aquaculture here with high technology and organic harvests and it hopes to eventually net 30% of the UK’s prawns market. “This is not agriculture. This is a tech business. There’s no longer agriculture… Recently, his company was able to secure a grant from a floating oil offshore platform operator, SBM offshore. The support received from SBM Offshore has fueled the realization of a lifelong dream and kick-started production once again. He stated that for years he had experimented with the venture and was convinced that this was a suitable and much needed investment.

 

Ramps to be given reason for denial of local content certificate –Bharrat: Stabroek News

Ramps Logistics will today receive a formal response from the Local Content Secretariat (LCS) about why it failed to secure certification, Minister of Natural Resources Vickram Bharrat yesterday said. “Yes we will…tomorrow,” Bharrat told Stabroek News when asked if Ramps will be given formal notification. Bharrat’s statement comes after silence by the LCS to public enquiries about the Ramps application. The LCS also did not respond to Ramps when it requested reasons for the denial of the certificate.

 

Some disturbing aspects of the VICE News interviewStabroek News (Columnist) Accountability Watch by Anand Goolsarran

Peruvian President Pedro Castillo along with a former Transport Minister and six lawmakers are being investigated for allegedly being part of a criminal network that received bribes for public works contracts… We have seen how the reverse happened when the previous Administration entered into an agreement with ExxonMobil’s subsidiaries for the exploration and production of crude oil. At that time, the estimated amount of crude oil resources discovered was about one billion barrels. Further discoveries have since upped the figure to about eleven billion barrels.

 

Denied Local Content Certificate after 9 years in operation: Stabroek News (Letter to the Editor) by Shamshun Mohamed

First there was no meaningful explanation on the non-issuance of the Local Content Certificate, then piecemeal explanations were put forward but it seems not to the company denied. A company in operation for nine years suddenly finds itself being sidelined?

 

The authority exists for Exxon to recover the 2% royalty: Stabroek News (Letter to the Editor) by GHK Lall

Guyana Revenue Authority (GRA) boss, Mr. Godfrey Statia, made a rare public media commentary on the roiling issue of royalties… Amid the deluge of details emerging from the Commissioner General (CG), there was reference to the Guyana’s Petroleum Tax Regime, Cost Recovery Regime, the Income Tax Act, and the discretionary powers of the subject minister.  The CG was quick to point out that the minister, whoever he is, or under what mandate he operates, has not exercised such discretionary powers to date relative to royalty recovery, but that it could be. 

 

Neither the 1999 PSA, nor any subsequent PSA, was negotiated or signed by me: Stabroek News (Letter to the Editor) by Carl B. Greenidge, Adviser on Borders and Guyana’s Agent to the ICJ (Former Minister of Foreign Affairs and Trade)

I refer to page 11 of Kaieteur News (Friday the 24th June) which carries a feature entitled, “Exxon’s contract on 2% royalty misleading as Guyana bears the burden – Chris Ram”. Chris Ram’s name appears next to the headline but the actual authorship is not clear because at points the writing is in the third person as will be seen from an extract below. My name appears in the said piece as being responsible for inappropriate, if not illegal, ‘generosity’ including, remitting or waiving royalty payments ExxonMobil was due to make to the state.  The writer/s of the article, points out that the Production Sharing Agreement (PSA) is the framework in which the petroleum companies, namely ExxonMobil et al, are being taxed.

 

GUYANA: Energy Crisis: The time has come for CSME to play it s role – Letter by Eusi Kwayana | Guyanese Online

 

Trinidad pays deepwater royalties, taxes for oil companies, caps cost recovery at 80%: OilNOW

Trinidad and Tobago’s model deepwater production sharing contract (PSC) offers attractive incentives to international oil companies (IOCs). All royalties, taxes and other levies are paid for out of the Government’s share of Profit Petroleum, which remains after costs are recovered up to a ceiling of 80%. The effective waiver of royalty is outlined in Section 21.5 of the model PSC which states, “The Minister shall pay on behalf of the Contractor, out of the Government’s share of Profit Petroleum referred to in Article 18.14, the Contractor’s liability under applicable law for petroleum impost, petroleum profits tax, supplemental petroleum tax, petroleum production levy, green fund levy, unemployment levy and any other taxes or impositions whatsoever measured upon income or profits arising directly from the Petroleum Operations under this Contract.”

 

SOLD OUT: Suriname gearing up for major energy conference this week: OilNOW

The 2nd edition of the Suriname Energy, Oil & Gas Summit & Exhibition (SEOGS 2022) will be hosted this week in Paramaribo from June 28 to 30. The event is set to provide the opportunity to hear from government, meet the major operators, licence holders, tier one contractors, service companies and the entire value chain in Suriname’s nascent hydrocarbons sector. Suriname “open for business” as over 2,000 energy stakeholders expected at upcoming oil and gas summit. Annand Jagesar, Chief Executive Officer of Staatsolie Maatschappij Suriname, told OilNOW the growing oil and gas discoveries offshore Suriname in recent years is seeing the South American country emerging as the center of Oil & Gas activities, attracting stakeholders from across the globe.

 

Over 60% of Suriname’s deepwater acreage remain unlicensed; new bid round nears: OilNOW

Suriname’s state oil company, Staatsolie is set to auction off several deepwater blocks this year with another bid round reportedly planned for the shallow blocks by mid-2023. “We are very excited about the prospects of releasing further offshore acreage,” Annand Jagesar, Staatsolie’s Managing Director, told OilNOW ahead of a major energy conference set to take place this week. The CEO said Suriname currently has over 60% of its offshore acreage unlicensed.

 

Brazil’s Petrobras to sell deepwater assets to BW Energy for up to $75 mln | Reuters

https://www.reuters.com/markets/us/brazils-petrobras-sell-deepwater-assets-bw-energy-up-75-mln-2022-06-24/

 

Uruguay is back in the oil exploration business; three companies awarded four off shore blocks — MercoPress

https://en.mercopress.com/2022/06/25/uruguay-is-back-in-the-oil-exploration-business-three-companies-awarded-four-off-shore-blocks?utm_source=feed&utm_medium=rss&utm_content=main&utm_campaign=rss

 

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