Dear Editor,
Guyanese are asking whether a review would lead to renegotiation of the contract and increased revenue sharing. Instead of 2% that the APNU+AFC saddled the country with in the 2016 contract, would it get more?
Guyanese applaud the PPP Government for voluntarily seeking a review of the Payara project. Government is short on revenue, so it rightly sought a grant from a willing donor country, Canada, to pay the costs to have the review done. Donor countries dictate conditions on aid, and have to approve the reviewer. The Government does not select the reviewer, although it could reject the selection and request a more able body to conduct the review.
Is there justifiable reason to question the professionalism of the review team? Should Guyana pay for, and undertake, its own review, as suggested by KN editorial? What would the review be about? Would such a review be any different from that conducted by Bayphase, whose report is unavailable and/or would be performed by the Alison Redford team? Is Redford the best available Canadian reviewer? Can Guyanese-Canadians or local Guyanese (critics, for example) be added to the team? Should Government rebuff the Redford Team? The answers to the above depend on the purpose of the review.
Some critics have called for a complete and thorough review of the entire project: from exploration site to actual drilling, and all aspects relating to recovery of oil and gas. That is not practical. Such a review is like starting over from afresh in finding oil and then deciding what to do with the find. That is not what the nation has in mind when it requested or gave its support for a review – Guyanese want a renegotiation of the contract for more revenue.
I also don’t think a review of the technical aspect of Payara is what the President had/has in mind when he responded to a reporter’s question on Janmashtmi Day, that a review of Payara would be undertaken. Vice President Jagdeo also addressed the issue of the review in his press conference. They all want a better deal for Guyana – money, safety, security, employment, et al.
Doing a review of the project from scratch would be a total waste of time and money, and such a review would probably take years. Is it a strategic move for renegotiation? Is the goal to stop the project, or proceed with its completion and seek increased revenues for Guyana’s development? The bottom line for Guyana is increase in royalty revenues, reduction in wasteful (padded) expenditures that would lead to increased revenue sharing and profits. It is also to secure an increase local content not only in supplying roti, dhal, bora, pumpkin, and bhajji, but also training and utilising Guyanese technical manpower. We don’t have petroleum and geo engineers in Guyana. But we can start training Guyanese for fieldwork; not every oil or gas field worker is a college engineering grad.
The review should focus on ensuring that the project is ‘relatively safe’, and that it maximises benefits and minimises risks to Guyana – cross the ‘T’ and dot the ‘i’, so to speak. The nation would not be interested in the technical aspects of the contract, the type and quantity of pipes, and drills, storage tanks, etc. – that is for the petroleum, electrical, civil, and geo or environmental engineers.
Since it is established that the Redford Team is not an engineering body, it would seem that their expertise would be primarily to review the legal aspects of the contract, and give advice accordingly. Ten days would seem sufficient for such a review, but it would not hurt to have a technical team look at those aspects of the production, especially for safety considerations.
Guyana must not be liable for blowouts, accidents, oil spills, and the like.
Technical aspects of the project have to be left to the expertise of Exxon – Perhaps Jan Mangal, Melinda Janki, and other critics would want to join in the technical aspects of the review after the report is delivered. They can point out all the missing aspects that should be raised with Exxon, or be included in the renegotiated contract.
Guyanese lawyers and economists, or others and/or negotiators can also give an input after receiving the report from the Redford Review Team. The review must also look at padded expenses (infrastructure costs and consultancy fees in particular) for the project, and this must be included in the contract. Aspects of the actual technical work on the project can be subjected to further review.
But the important question is: Would a review lead to a renegotiation of the contract? Exxon wishes quick approval so that it can proceed with rapid recovery of oil, which is also in the short-term interest of Guyana to increase revenues to erase billion of US dollars in debts accrued over the last five years. Increased revenues would also help with acquiring funds for our development. On this point, Vice President Jagdeo is right to move with speed on the review. But the Government must also balance this with the political demands of the country for greater revenue sharing.
As an objective commentator, legitimate questions are raised on the review, but one has to applaud the Government for volunteering to undertake a review of the project; the predecessor regime refused. In the end, what Guyanese really want is renegotiation for better terms. They want greater revenue sharing and reduction in padded expenses to increase profits.
Yours truly
Dr Vishnu Bisram
