Reports of SARA investigating oil blocks harmful to investment – GCCI

…questions timing of probe without regulatory oil agencies

Reports of an investigation into the award of oil blocks being done by the State Asset Recovery Unit can harm Guyana by discouraging investors from vying for future oil blocks. This is according to the Georgetown Chamber of Commerce and Industries (GCCI).

At a press conference on Tuesday, head of the GCCI’s Petroleum arm, Charles Ramson, expressed worry over the impact these revelations have on Guyana’s image. He noted that the fact that the revelations initially appeared in Bloomberg means thousands in the global business community would have read this unsavoury news.
“It’s dangerous for our investment climate, destroys investor confidence and it creates that level of uncertainty that we don’t need right now. We haven’t produced a drop as yet. And you already want to send bad signals to the international community? It’s highly improper, irregular and totally disturbing.”
Ramson hastened to add that in cases where there is evidence of fraud, an investigation would be warranted. But he noted that because of the impact such pronouncements would have on investor climate, preliminary disclosures should be kept under wraps.
Meanwhile, GCCI President Nicholas Boyer decried the haphazard way in which the investigation is being done. He also noted that the investigation is being done at a time when much of the regulatory framework for the industry has not even been set up.
“At this point I think we’re shooting in the dark. I think SARA is wasting its time because of the lack of having a petroleum commission in place, lack of policies saying how it’s going to issue future blocks and approach relinquishment.”
On May 22, an article appeared in the New York-based Bloomberg website, in which SARA Director, Dr Clive Thomas was quoted confirming that there was a probe. According to Thomas, the probe was in its early stages and would be centred on the award of blocks and licences to ExxonMobil and Tullow.
Thomas was quoted by Bloomberg as saying “we’re investigating the issuance of the licences, for example, and the various blocks. We’re building up a case. This is an area of investigation into how the blocks were allocated and the decisions that were made.”
“We’re at an investigatory stage so we can’t libel persons by saying that we found proof of anything. There’s enough evidence for us to want to continue the investigation,” the article also quoted him saying.
The Stabroek Block is 6.6 million acres (26,800 square kilometres). ExxonMobil affiliate, Esso Exploration and Production Guyana Limited, is operator and holds 45 per cent interest in the Stabroek Block. Hess Guyana Exploration Ltd holds 30 per cent interest and CNOOC Petroleum Guyana Limited, a wholly-owned subsidiary of CNOOC Limited, holds 25 per cent interest.
Meanwhile, the Orinduik oil block administered by Tullow is just a few kilometres from Exxon’s discoveries in the Liza and Payara fields in Stabroek. Tullow had in February announced it was bringing forward its drilling programme from the previously scheduled end of the year to the second quarter.
It had announced that the Jethro prospect would be drilled in June.
On the other hand, its Carapa prospect in Kanuku will be drilled in the third quarter. It is understood that the net cost of the Jethro well is US$30 million, while the Carapa well will cost US$20 million.
Tullow’s partner in the Orinduik block, Eco Atlantic, had announced that drilling on the Joe prospect will begin in mid-July of this year. They had announced that the Stena forth drill ship will move directly to the Joe, after it finishes drilling the Jethro Lobe Well in the Orinduik block.