No need for Guyana to worry: ExxonMobil also accountable to US Govt – former EPA Director
A Murray House-facilitated panel discussion on Saturday saw contributions from civil society on how Guyana can better manage its oil and gas sector, including recommendations of 24/7 monitoring on the rigs of oil companies to ensure there is no value leakages or breaches of production licences.
This particular recommendation came from former Environmental Protection Agency (EPA) Director Dr Vincent Adams, who spoke of the importance of ensuring that oil companies are monitored at all times and that the State does not depend on reports from the company.
“We have to have 24/7 coverage, on-site monitoring. So that we can see exactly what’s going on. In my experience, over 90 per cent of the time, when you sit in your office and whatever the contractor is reporting, (cannot be relied on),” Adams informed the panel.
The petroleum engineer said that during his time at the EPA, they worked with the World Bank to develop a unit of “36 highly trained staff” who could provide this oversight of the offshore operations of oil companies in Guyana’s waters.
However, Adams admitted that the unit has, in fact, never been set up, owing to budgetary delays. He expressed hope that the unit will be set up under the current People’s Progressive Party (PPP) Government.
Adams also noted that while there has not been any independent verification of the oil potential of the Stabroek Block, oil giant ExxonMobil also has to be accountable to its United States (US) Government and thus must be transparent and accountable regarding its oil fields.
“As far as I know, all the data comes out of Exxon, but I don’t think I have any issues with that. Exxon is not going to… they have more accountability than Guyana to deal with, in terms of reporting numbers.”
“So, it’s not just they can willy nilly say they’re going to put eight billion barrels of oil on their books, so they can enhance the financial appearance. They’re not going to be allowed to do that and get away with it,” Dr Adams also said.
What he did recommend, however, is that the capacity be built to ensure that Guyana has qualified people who can do verifications of their own. This, according to Adams, means investing in human resource.
So far, the Liza-1 well has accounted for all of Guyana’s oil production. The Bank of Guyana’s last half-year report, which covers the period up to the end of June 2020, had previously revealed that Guyana produced over 10 million barrels of oil during the first half of 2020.
Guyana, with oil giant ExxonMobil as operator, began producing oil on December 20, 2019, in the Stabroek Block, lifting its first million barrels of profit oil from the Liza-1 well in February 2020. Oil tanker Cap Phillippe transported this lift from the Liza Destiny floating production storage and offloading (FPSO) vessel, allowing Guyana to receive its first payment the next month.
That money, $11.4 billion, constituted Guyana’s first oil revenue-based earnings from production in the Liza field. It was deposited in the Federal Reserve Bank of New York in March of this year.
An additional sum of $7.3 billion was subsequently deposited, as well as royalty payments. However, this money has remained untouched, as the protracted political crisis that followed the March 2 General and Regional elections sabotaged any attempt to set up a system for withdrawing funds.
The Natural Resource Fund Act stipulates that various committees must be established to provide oversight for the fund. It is expected that this legislation will be reviewed by the current Government this year. (G3)