COVID-19, political situation impacting oil & gas sector – Energy Dept

The onset of the coronavirus (COVID-19) and the prevailing political situation, have impacted Guyana’s oil sector and caused delays in a number of areas, according to the Energy Department.
This was revealed by Director of the Energy Department, Dr Mark Bynoe, during a Zoom interview with the media on Monday. Bynoe explained that a number of operators, especially Esso Exploration and Production Guyana Limited (EEPGL), have had to adjust their work plans due to the circumstances.
“The major challenge for all operators, whether it be Repsol or CGX or EEPGL, is the issue of having to change out their workforce. Given that they’re supposed to be working 28 days on, 28 days off,” Bynoe explained.
“With airports being closed out, some of these workers are coming from different parts. In fact, I think the last estimate was 45 different destinations for EEPGL alone. This caused an impact on their work plan.”
He cited the fact that since many of these workers come from all over the world, travel restrictions in place to combat COVID in Guyana and other countries will directly hinder them from flying in.
Another impacted area is the contract for the cost oil audit being done on Exxon, which was awarded to UK firm IHS Markit last year. According to Bynoe, they have had to extend the period for the audit owing to the travel restrictions.
Similarly, the Department has had to extend the time for interested firms to respond to a tender for a marketing firm for Guyana’s oil. At one point in time, 34 companies had expressed an interest in snagging the contract.
“We did extend [the tender] twice. And the reason we extended it had nothing to do with a lack of interest. It had to do with the ports being closed off, to allow firms an opportunity to place a bid, we had to extend that time.”
“COVID-19 is new for all of us. So we are basically treating this like trial and error. The airports were closed for one month, another month and we did not know when it would open up back.”
Bynoe explained that a number of companies nevertheless sought to use unconventional means to deliver their bids to the National Procurement and Tender Administration Board (NPTAB), such as couriers.

Delays
With the subject Minister’s signature needed on various documents including Field Development Plan (FDP) approval and the unresolved elections, Bynoe noted that this has also had an effect on the Department’s work.
“However, what I have said and am doing is that we are providing EEPGL with line of sight. [There are issues] that have to be addressed before one can discuss approval of FDPs. So in large measure, we have provided [them] with a list of matters to be addressed before we can consider Payara further.”
The National Oil Spill Contingency plan has been not been spared. While Bynoe directed this publication’s queries to the Civil Defence Commission (CDC), he admitted that the situation has held up collaboration on the plan with overseas counterparts.

Elections process and uncertainty
It has already been over two months of controversies and a credible winner for the 2020 General and Regional Elections is yet to be declared.
However, only last week, ExxonMobil, Chief Executive Officer (CEO) Darren Woods, said that
with Guyana’s electoral process dragging out now for two months without a credible result being announced, the political crisis has led to delays in approvals for the development of ExxonMobil’s Payara project in the Stabroek Block.
Woods reported that the impact of the coronavirus disease (COVID-19) pandemic is presenting a challenge to the company in terms of rotating its crews in Guyana.
He said, “due to the impact of COVID-19 has temporarily slowed our drilling campaign.” Woods told investors, “…we expect a delay in our future developments [in Guyana] of roughly six to 12 months”. Speaking directly to the impact of the delayed transition of a new Government locally on the company, Woods lamented that “unfortunately, the ongoing elections process and uncertainty around the next Administration has slowed Government approvals of the Payara Development Plan.”

The Guyana Elections Commission (GECOM) and the Chairperson came in for much criticism for allowing Region Four’s (Demerara-Mahaica) Returning Officer Clairmont Mingo, to make two declarations which lacked transparency.
In fact, the first declaration was thrown out by the court. The second one currently sits in abeyance, with the parliamentary Opposition expressing fears that it could be used should the recount GECOM is embarking on be derailed.
In the meantime, coronavirus cases are steadily rising in Guyana. As of Monday, Guyana recorded 10 new cases, its steepest 24-hour increase yet, bringing the total number of cases to 92 out of 639 tests.