Guyana News Updates, October 03, 2022

Guyana Basins Summit

October 4-6, 2022

http://guyanabasinsummit.com/en

“Innovative Research on Sustainable Development in a Resource Abundant Economy”

University of Guyana School of Graduate Studies and Research (UGSGSR)

October 5 – 7, 2022

Webinar Registration Link:  https://zoom.us/webinar/register/WN_WuT_HF-yQO6T8_vuFFX05g

US Department of Commerce Caribbean Trade Mission & Conference

October 23-28, 2022

https://www.trade.gov/caribbean-trade-mission

Caribbean Investment Forum

November 8-11, 2022

Trinidad

https://www.caribbeaninvestmentforum.com/?utm_source=Caribbean+Export+List&utm_campaign=856bee512b-EMAIL_CAMPAIGN_2022_09_16_main_flyer&utm_medium=email&utm_term=0_9e96a5189f-856bee512b-52236001

IMF issues favourable Economic Report Card for Guyana: Kaieteur News

Following the conclusion of its 2022 ‘Article IV’ Mission with Guyana, the International Monetary Fund (IMF) released a detailed report last week which captures its findings on the economic health of the nation as well as the Government’s response to key matters… It noted that oil production increased by 57 percent in 2021 to 110,000 barrels of oil per day (bpd). With the coming on stream of three additional fields—Liza-2 (February 2022), Payara (end-2023) and Yellowtail (2025)—it said oil production is projected to reach at the very least, 720,000 bpd by 2026.

IMF applauds govt’s transformative infrastructural projects

IMF lauds Guyana’s progress in climate change mitigation – Guyana Times

The 2022 IMF Article IV Consultation Report on Guyana (Part II): Stabroek News (Columnist) Accountability Watch by Anand Goolsarran

According to media reports,  subsidiaries and/or affiliates of  Chinese companies competing to build Guyana’s natural gas power plant at Wales, West Bank Demerara, have been blacklisted for fraudulent practices in relation to the award of contracts funded by World Bank… The Board stated that it welcomed the restraint in using oil revenues before the passage of the recent amendments of the Natural Resource Fund Act and encouraged continued prudent management of oil revenues. It called for measured increase in spending on public investment to ensure that the annual non-oil overall fiscal balance does not exceed the expected oil transfers.

Guyana outranks Saudi Arabia, Norway, Qatar as country with world’s second highest oil reserves per capita: OilNOW  

New oil producer Guyana now ranks second only to Kuwait on the list of countries with the highest oil reserves per capita, placing it ahead of producers like Saudi Arabia, Norway, and Qatar, according to the International Monetary Fund (IMF). Guyana only had its first commercial oil discovery in 2015 but its reserves have reached an accumulated 11 billion oil-equivalent barrels as a result of ExxonMobil’s continued exploration success in the offshore Stabroek Block.

Guyana’s 2022 crude output valued at US$9.3 billion: OilNOW

The International Monetary Fund (IMF) has projected the total value of crude produced in the Stabroek Block this year at US$9.33 billion. This accounts for 93.4 million barrels of expected production, at an average price of US$99.90 per barrel. Guyana’s profit oil take will roughly align with that of the combined Stabroek Block group, as per the 50/50 split stipulated by the Production Sharing Agreement (PSA). The IMF recognised Guyana’s commitment to transparency and accountability in the management of its oil funds, as evidenced by the new Natural Resource Fund (NRF) legislation.

Guyana must perform delicate balancing act between present and future needs, says energy expert: OilNOW

From the diverse landscape of Ghana to the ultramodern architecture of Qatar, one can find a plethora of lessons on what to do with oil revenues. But the one thing Guyana, an oil explorer’s paradise must not do, is find herself a blind imitator of others. This advice was recently imparted by Dr. Lorraine Sobers, a Fulbright Scholar currently lecturing at the University of the West Indies, St. Augustine.

Guyana’s non-oil economy also performing well, IMF report shows: OilNOW

The International Monetary Fund (IMF) projects that Guyana, for the next five years, will see growth in its non-oil economy. The Washington-based institution projected that the country would see a growth of 7.2% Gross Domestic Product (GDP) for 2022. It said this can be attributed to the recovery of sugar and rice production from the floods as well as positive spill overs from the oil sector. It also projects non-oil GDP will hover around 5% and 5.2% per year up to 2027.

GTUC hosts seminar on Guyana’s oil and gas contract: Village Voice News

Guyana’s oil and gas contract with ExxonMobil was the topic of discussion at a seminar hosted by the Guyana Trades Union Congress (GTUC). The September 28 seminar was conducted in collaboration with the United States based International Republican Institute (IRI). The IRI was represented at the daylong event by Local Program Manager Sara Bharrat. The session comprised an analysis of the oil and gas contract by economist Rawle Lucas followed by a discussion of the topic among some 30 attendees.

Guyana’s Environmental Protection Agency builds capacity: Guyana Chronicle (Columnist) Oil, gas & you

GUYANA’S rapidly developing offshore oil and gas sector presents a once-in-a-generation opportunity to secure wealth for a country that has historically suffered from low growth and underinvestment. This new wealth also presents a challenge to managing the natural wealth of Guyana – the land, air and sea that underpins our green identity. Tasked with maintaining Guyana’s global leadership on sustainability and environmental protection is the Environmental Protection Agency (EPA).

The Production Sharing Agreement, Renegotiation, and the Stability Clause (Part 2): Guyana Chronicle by Joel Bhagwandin

THE argument by the proponents for renegotiation that the oil companies are not paying any taxes in Guyana is a misconceived notion. The clause in the Production Sharing Agreement (PSA) that speaks to the government paying the oil companies’ corporate taxes from the government’s share of profit– following which the Guyana Revenue Authority issues a tax certificate to the oil companies is essentially a nominal tax. In other words, the normal corporate tax rate is not applied to the oil companies, but the oil companies benefit from this in the form of a tax credit in the case of ExxonMobil in the United States (U.S).

Prioritizing Guyana’s Oil Revenue Spending: A Common Sense Approach September 29, 2022: Village Voice News (Columnist) by Dr. Lorraine Sobers

What can Guyana learn from Botswana, Ghana, Suriname, Qatar, Trinidad and Tobago, the United Arab Emirates, and Venezuela? There is great interest in this type of analysis- gleaning lessons and best practices from the oil and gas development of other countries. Case studies help us to identify best practices but they are not intended to be imitated blindly. Instead the focus ought to be on identifying proven principles that lead to right thinking and right action. Changing conditions, shifting strategies and new paradigms call for discretion and common sense in applying history lessons to today’s challenges.

We can build around existing Exxon contract instead of talking about how bad it isStabroek News (Letter to the Editor) by Everton D. Morris

Every day on reading the highlights in our Guyanese media I become sick of the incessant call to renegotiate the oil contract with Exxon. These cries come from very qualified minds at home and abroad and from some “talking” heads. In contract law the two most compelling reasons for contract renegotiation are “Fraud” or “Misrepresentation of facts.” That is a tall ladder for Guyana to climb – Exxon knows that.

New terms and conditions being finalised to maximise gains in upcoming oil blocks auction – Natural Resources Ministry: Kaieteur News

The Government of Guyana (GoG) said on Friday that it is preparing to launch its first bidding round for offshore exploration and production of hydrocarbon blocks. It said Cabinet is finalising the new fiscal terms and conditions which will allow for the country to gain the maximum economic benefits as it advances the exploration and development of the Guyana offshore blocks. The 2022 bidding round, which is expected to be officially launched soon, and will be open for several months, is expected to give interested companies sufficient time to prepare their competitive packages and bid to win the available acreages offshore; which will be done in an open and transparent manner.

Gov’t retains right to accept or reject bids for Wales gas plant without liability: Stabroek News  

Government has informed the five pre-qualified companies in the running to build the 300MW natural gas-fired power plant at Wales that it has the right to accept or reject any proposal or terminate the selection process without incurring any liability. “Acting in its sole discretion, the Employer reserves the right to accept or reject any Proposal or to reject all Proposals, without thereby incurring any liability to the affected Applicants. 

Government Take & Reported Reserves – Part 2Stabroek News (Columnist) Guyana And The Wider World by Dr. Clive Thomas     

In an effort to provide clarity and boost comprehension of the listed column title in this series, last week’s  column introduced my re-visit of Government Take under Production Sharing Agreements, PSAs, with a summary re-statement of the intellectual origins of PSAs in legal theory, behavioral economics, and institutional theory. Based on these fields of research and analysis, PSAs have been, from the time of their earliest introduction to the oil and gas sector, subjected to generic   critical dissections, from economic, legal, and institutional perspectives.

RenegotiationStabroek News (Columnist) In The Diaspora by Melinda Janki

In 2016, Raphael Trotman,  the Minister responsible for petroleum signed a Petroleum Agreement with three oil companies – Esso Exploration and Production Guyana Ltd.(Esso), Hess Guyana Exploration Ltd. (Hess) and CNOOC Petroleum  Guyana Ltd CNOOC). These are not the big international companies but their offshore subsidiaries, which have fewer assets. Esso is a subsidiary of ExxonMobil Corporation. Public pressure forced the government to release that Petroleum Agreement in December 2017. Everybody in Guyana knows that it is a horrible deal.

‘Exxon contract not cast in stone’Kaieteur News

– Int’l lawyers says ‘sanctity of contract’ doctrine does not mean an agreement cannot be changed

“There is a willingness not to treat contracts as cast in stone (so) that while contracts bind us to terms and conditions, if the conditions have changed so dramatically and so detrimentally, then the reopening and renegotiation of contracts is a reasonable demand of the people of Trinidad and Tobago and we anticipate that our partners in this business will see our claim as a fair and just one and we anticipate that there will be some reopening of contracts so that at the end of the day, we can all sustainably benefit from the God-given riches of Trinidad and Tobago.”

Govt. must consider how pipeline will cut farmers’ income when valuing lands along route – PattersonKaieteur News

As farmers complain about being handed an inconsiderate proposal from government to take over a fraction of their land to facilitate a natural gas pipeline that will run from Nouvelle Flanders to Wales on the West Bank of Demerara, Shadow Oil and Gas Minister, David Patterson is arguing that the government’s valuation approach is incorrect as it did not factor in the losses farmers would face from not being able to use their lands.

International watchdog groups believe Exxon calling the shots on Guyana’s oilKaieteur News

…Article 13 says PPP/C Govt dancing to companies’ tune to stay in power

Based on interactions with international watchdog agencies, local transparency group Article 13, says it is becoming increasingly obvious to anti-corruption advocates and other stakeholders that US oil major, ExxonMobil is calling the shots when it comes to Guyana’s lucrative oil find in the offshore Stabroek Block. Given the government’s continued resistance toward renegotiating the lopsided 2016 Production Sharing Agreement (PSA) it has with Exxon’s subsidiary Esso Exploration and Production Guyana Ltd (EEPGL), the body says stakeholders are also beginning to think that the government is deliberately supporting this unfavourable agreement in return for the oil companies’ support in maintaining political power.

We are all watching and waitingKaieteur News (Letter to the Editor) by GHK Lall

Guyana is watching, waiting.  They are watching and waiting to absorb what happens next in this shadowy, slightly messy, matter of the NRF and tax payments made by the Government of Guyana on behalf of Exxon.  It would enlighten all on how well this national oil fund is overseen.  As matters stand currently, the starting gun is in the President’s hands. The Audit Office issued its opinion that all is well, while the Auditor General made clear where he stood.  His position, through a nifty handoff, was check with the GRA since it is the entity that has responsibility for issuing the related tax receipts.

The gas pipeline project is a very expensive and risky undertakingStabroek News (Letter to the Editor) by Jamil Changlee

The land purchase offer by the current administration is competitive and shows a significant improvement from the past if the land being purchased is land used for farming. Given the prevailing local market prices and pricing in other markets, the government’s offer should not be easily dismissed. However, the recent concerns expressed in the news is with some merit. The value of the land should also be based on the net present value of the cash flows.

From Exxon’s perspective there are those backdoor and sideways profitsStabroek News (Letter to the Editor) by GHK Lall

The ordinary citizen does know, maybe doesn’t even care to know, how interest rates operate.  All they know is that its charge is included in payments for mortgages, car loans, hire purchase plans, and such.  They need to know more, and I share a simple primer so that the unknowing may understand the game.  Further, I present an idea of how businesses and the real world operate when interest charges are involved, and how they are hurt.  I do this within the context of oil.

Solar power ensures better energy security: Stabroek News (Letter to the Editor) by Darshanand Khusial

The main purpose given for building this gas pipeline is to supply the majority of electricity to Guyanese homes and businesses. Energy security is like oxygen, you realize the magnitude of its importance when you don’t have it. Gas pipelines running in the ocean to Europe are now being sabotaged by rogue states. These punctured gas pipelines are releasing methane, at least 80 times more potent than carbon dioxide, into the atmosphere.

Both Governments misused ‘sanctity of contract’ doctrine to avoid acting in nation’s best interest – NY Lawyer: Kaieteur News

Though the 2016 Stabroek Block Production Sharing Agreement (PSA) has been heavily criticized for having a gross number of fiscal weaknesses, the PPP/C administration has maintained that no renegotiation will take place. The party’s top officials such as Vice President, Dr. Bharrat Jagdeo have categorically stated that they abide by the sanctity of contract doctrine. This principle states that the companies involved as well as the State will uphold their obligations under the deal.

Pres. Ali mum on request for tax particulars for oil companies to be made public: Kaieteur News

…civil society body tells Auditor General “immediate steps” needed to address misstatements

President Irfaan Ali is yet to respond to a letter addressed to him by the Civil Society body ‘Article 13’ that requested particulars of the tax payments made by Guyana on behalf of the oil companies, be made available to the public. That letter was sent to the Head of State on September 19, last – almost two weeks ago – but, to date, there has been no acknowledgement of the correspondence. A member of the group explained that while the President is yet to state his position on the release of the tax payment particulars, ‘Article 13’ will not allow the matter to be swept under the proverbial rug.

Exxon wanted PSA signed before Govt. fully understood its Stabroek oil wealth: Kaieteur News

…‘Article 13’ cites Clyde & Co report findings

“The fact that since 2016 the volume of oil being borne out of the same agreement that envisaged a fraction of what is expected production is itself a call for renegotiation. If only the Government cared more about Guyana than its retention of power,” ‘Article 13’ believes that it would have made earnest efforts to seek more economical benefits for its citizens through its oil wealth. The civil society body has been unrelenting in its support for the renegotiation of the lopsided 2016 Stabroek Block Production Sharing Agreement (PSA). 

Still no public consensus or release of new PSA as oil block auction approaches: Kaieteur News

– Opposition says it will use all avenues to access new document

Given the raging debates regarding the lopsided Production Sharing Agreement (PSA) that Guyana currently has with ExxonMobil’s subsidiary Esso Exploration and Production Guyana Limited (EEPGL) and partners, it was thought that the Government would have by now commenced consultations, or made public, information on the new agreement to ensure stakeholders’ input for a more satisfactory share of the oil resources.

Govt. yet to grasp extent of potential danger associated with gas plant project – Patterson: Kaieteur News

…says more needed than two fire trucks and new fire station

Even as the Government continues with its preparations for the construction of the Gas-to-Energy (GTE) project, it seems to be underestimating the dangers that can be associated with the US$2 billion venture. This is evident as response plans known at the moment only include two new fire trucks and a new fire station at Wales, West Bank Demerara where the Natural Gas Liquids (NGL) facility and power plant are expected to be constructed.

Don’t do business with crooked companies: Kaieteur News (Editorial)

What nonsense is this?  What is stirring in the heads of those controlling Chinese companies that they could harbour the idea that they could come up with any cock-and-bull cover (‘Chinese firms bidding for gas-to-energy project seek to distance themselves from shady past of affiliated companies’ -KN September 30) to get another fast one over Guyanese and their leaders?  The Guyana Government should not give any such defenses (‘seeking to distance’) a hearing, and be rid of these people.

An injunction should be sought to stop the auction of the oil blocks: Kaieteur News (Columnist) Peeping Tom

There should be a meeting of all the groups and individuals opposed to the oil deal. An alliance should be formed with two objectives, one long-term and one short-term. The short-term objective should be to prevent the impending auctions of oil blocks. Legal advice should be sought and legal action taken to prevent the government from moving forward with the auction. The Government should not be moving forward with any auction. It has not made public the model Production Sharing Agreement (PSA) which it says it was working on to guide future deals with oil companies.

NY-based lawyer says… Refusal to renegotiate ExxonMobil 2016 deal an economic mistake: Kaieteur News

The Guyana Government has remained resolute in its position to not renegotiate the 2016 Stabroek Block Production Sharing Agreement (PSA). It has argued that it respects the sanctity of contract. Vice President, Dr. Bharrat Jagdeo has, in recent times, said while the government agrees that there are clear weaknesses within the agreement, it would remain untouched. The official who has responsibility for policies within the oil sector said government would instead seek to claw back value through the improvement of provisions within permits and production licences, and ensure enforcement of other mechanisms such as the Local Content Legislation.

Politicians should not negotiate contracts on Guyanese behalf – Int’l Lawyer: Kaieteur News

…says leaders look after their own interests

…questions giveaway of bauxite, diamond, gold and oil wealth

International Lawyer, Melinda Janki does not believe that politicians should negotiate contracts on behalf of Guyanese but should stick to instituting the correct legislative framework to manage the country’s respective sectors… In the case of the oil contract, this deal with ExxonMobil was released by former President David Granger. It was only after it was made public that Guyana understood the magnitude of losses and giveaways the oil companies are benefitting from.

Oil companies required to detail how Guyanese businesses will have first consideration at each phase of operation: Kaieteur News

– must also facilitate alliances with appropriate partners

Guyana’s Local Content Secretariat has laid out strict requirements which oil companies must now follow when procuring goods and services for their operations. According to the Secretariat’s guidelines, companies are required to produce among other documents, an Annual Local Content Plan which outlines their procurement plan with the following details: How local content is to be included for each phase of petroleum operations;

Why there are no mass protests over the oil deal?: Kaieteur News (Columnist) Peeping Tom

No one likes to be robbed. A person would rather drop accidentally or lose a $1000 bill than be mugged and deprived of $500. There is something humiliating about being robbed. No one wants to experience being mugged and robbed of their possessions. There is outrage when this happens. But this appears to apply only to personal and business transactions. If you buy something from a store and you are shortchanged you would naturally be upset.

The President is in a pickle: Kaieteur News (Letter to the Editor) by GHK Lall

Guyana is watching, waiting.  They are watching and waiting to absorb what happens next in this shadowy, slightly messy, matter of the NRF and tax payments made by the Government of Guyana on behalf of Exxon.  It would enlighten all on how well this national oil fund is overseen. As matters stand currently, the starting gun is in the President’s hands. The Audit Office issued its opinion that all is well, while the Auditor General made clear where he stood.  

Govt to meet with CGX on Berbice Deep-Water Port: Guyana Times  

The Guyana Government is slated to meet with representatives from the Canadian company, CGX Energy Inc, next week to intensify discussions on the deep-water port facility that is being constructed in Berbice, Region Six (East Berbice-Corentyne).  This is according to Natural Resources Minister Vickram Bharrat, when contacted for an update on CGX’s Berbice Deep-Water Port (BDWP) project. Previously, the Government had expressed concerns over the slow pace of the project and had given the company up to September month-end to submit a plan on how it intends to move forward with the port facility.

Cabinet finalizing terms for ‘fairer share’ ahead of oil blocks auction – ministryStabroek News  

As it prepares to launch its first auction of oil blocks, government yesterday said that it was finalizing the fiscal terms and conditions to guide those agreements it will enter into and will ensure the nation gets a “fairer share” from its oils and gas resources. And as it wants maximum global interest and competitive bidding, it said that it will be embarking on “an intensive promoting campaign” that will ensure this. “Cabinet is finalizing the new fiscal terms and conditions which will allow for the country to gain the maximum economic benefits as we advance the exploration and development of the Guyana offshore blocks,” a press release from the Ministry of Natural Resources said yesterday.

Guyana gets US$12M for skills development, employability project – Department of Public Information, Guyana

Israelis to push hydroponics in Guyana, help slash food bill – News Room Guyana

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