Control Risks Senior Analyst Raul Gallegos came out swinging on Thursday at the Government of Guyana over the issue of transparency with respect to the emerging oil and gas sector.
Speaking at the XXVI La Jolla Energy Conference during a plenary session on “Latin America’s Upstream Prospects and Outlook,” Gallegos bash the Government saying that Guyana’s Administration was “not transparent about essentially public sharing contract that it has with ExxonMobil”.
Control Risks Senior Analyst Raul Gallegos
ExxonMobil is the operating partner in the exploration of oil offshore Guyana.
Gallegos, a former journalist and an expert on Venezuela, told the gathering of investors, thought leaders and Government officials that the problem with Guyana was the issue of transparency.
He added that over the past few months, he and his team spent a considerable amount of time “patching” up a little information on what the Guyana Government planned to do with the revenues for the oil sector.
The Government of Guyana, he said, “still cannot figure it out”, making reference to the contract and plans for the revenue streaming in from oil.
“In my experience as years of a journalist, if somehow you spend a very long period of time and you can’t really get some transparency on where the laws are going…that’s alarming.”
Added to that, he pointed the Conference to the fact that the Guyana Government was also not very transparent about the laws being put together to govern the oil and gas sector.
“That is something that is keeping us a little bit concerned – this level of obscurity.”
The Guyana Government laid the Petroleum Commission Bill in the National Assembly on May 8.
The Bill intituled an Act (give title to a legislative act) to provide for the establishment and functions of the Petroleum Commission of Guyana and for related matters. The six-part Bill has 51 sections which cover areas pertaining to the establishment and incorporation of the Petroleum Commission, functions and duties of the Commission, and financing among others.
However, the Senior Analyst added that compounding the issue of transparency, the law would become the basis for the new sector, and expressed concern over Guyana’s history of “weak institutions”.
On the bright side, he noted with just about 800,000 people, for Guyana the news of the oil find was “essentially a big bounty and the good news”. He said in this respect the Government was sending the right signals as far as creating a reality for companies to enter the country and explore.
In May of 2015, ExxonMobil declared the discovery of substantial oil deposits in its exploratory Liza Well offshore Guyana. Subsequent drillings of this and other wells have revealed total deposits estimated to be in excess of one billion barrels of oil.
In fact, the United States-based company intends to extract 100,000 barrels per day from its Liza field offshore Guyana when production begins in 2020.
With the Guyana Government yet to enter into an arrangement with ExxonMobil, it has the June 14, 1999 agreement that the US oil giant had signed with the People’s Progressive Party/Civic (PPP/C) Administration for petroleum exploration in the Stabroek Block. (Tusika Martin)
