Was any feasibility study done on the proposed Crab Island facility?

Dear Editor,

We, the undersigned students of the University of Guyana’s Environmental Economics class of 2017, hereby seek space in your newspaper to request clarification on whether a feasibility study was done on the proposed on-shore facility at Crab Island.

Additionally, has ExxonMobil committed to making use of the Crab Island facility by way of an agreement, or will this initiative be another ‘white elephant’? The proposed shore house will, no doubt, provide a series of services to the emerging oil and gas sector, presumably starting with ExxonMobil’s ongoing exploration activities in the Stabroek Block. According to the Minister of Natural Resources, the Government of Guyana is either investing or facilitating the investment of US$500M in this facility. If a feasibility study was done, we are keen on being apprised of the significant findings of the investment/cost-benefit analysis.

Notwithstanding the foregoing, there are a number of unanswered questions which still linger, to which we respectfully seek answers: Is this venture going to be a purely public investment, or will it be a public-private investment initiative? To what extent has the private sector been engaged in conceptualising this project, given their vast experience in negotiating and handling business transactions?

Our class has some broader concerns: Has Guyana already determined to take royalty payments as profit oil, as opposed to money? Is the profit-sharing agreement going to allow ExxonMobil to recover 75% of its cost? We understand that the 50/50 split of profit oil was negotiated a while back. Has this split been renegotiated since the major discovery? And if not, will it be? Will Exxon pay taxes from their share of profit oil, as is done in other profit sharing agreements (PSAs). What exactly was granted to ExxonMobil in the Kaieteur and Canje Blocks over the period 2016/2017? Was consideration given to a public auction of the Kaieteur and Canje Blocks prior to Exxon obtaining exclusive rights to explore?

We wish to bring to the fore an existing model of this auctioning scenario, where, not so long ago, the UK conducted auctions in its oil & gas sector and was able to get value for money by extracting top dollar/Sterling pounds for its oil fields. This having been said, is there a plan for a public auction of other blocks in the future?

Our Environmental Economics Instructor, Doctor Thomas Singh, Senior Lecturer in the Department of Economics at University of Guyana, had attempted to engage ExxonMobil (Guyana) to discuss ways in which citizens can be engaged as more than just mere onlookers in the emerging oil and gas sector. Unfortunately, Ms Kim Brassington of ExxonMobil (Guyana) has thus far been non responsive, and this begs the question: why the deafening silence?

In furtherance of transparency, however, we verily do believe that our national patrimony is at stake in this venture, and it behooves us to request that the entire PSA be made public, so its contents can be scrutinised. A major question of ours is whether all the information regarding this deal has been placed in a central repository available to the general public? And if not, how soon can we expect such a move?

Finally, while the GGMC website and elsewhere offer valuable information, is this all the information available on the deal? We sincerely doubt it is!

Signed: University of Guyana’s Environmental Economics Class of 2017

Student Names

Nalini Persaud

Mahesh Mahipaul

Sean Harmon

Arielle Harsingh

Ryan Goberdhan

Thamesha Watson

Audwin Anthony

Davarshini Doobay

Diquan Lewis

Aruna Jainarine

Khamini Ramlakhan