Jan 12, 2021 News
Kaieteur News – As Guyana hurtles headfirst into approving multiple ExxonMobil field developments, energy transition advisor, Gerard Kreeft, warns that the billions of dollars, or the pot of gold that Guyana is being promised is an illusion of the worst sort.
Kreeft appeared on a virtual forum on Sunday last, during which International Lawyer, Melinda Janki, delivered a scathing rebuke of Guyana’s relationship with ExxonMobil. The forum was aptly titled ‘Oil and the betrayal of Guyana’s working people.’
During that address, Janki spoke of how former Minister of Natural Resources, Raphael Trotman, has left Guyana in an oil deal with ExxonMobil, which has not secured value for the Guyanese people, from the production of its Stabroek block crude.
Kreeft thought it important to emphasize that Exxon needs Guyana more than Guyana needs Exxon. He is not the only one that has made this observation. Seeking Alpha, a forum of international investors and financial industry experts, published an article in August last year stating that ExxonMobil has bet so much on Guyana that the oil major may very well need Guyana more than Guyana needs ExxonMobil.
“It’s basically a case right now of the tail wagging the dog,” Kreeft said of the Guyana-Exxon relationship.
Guyana cannot do oil exploration and production by itself, but there are other oil majors it can turn to with the technological expertise and track record for the job.
In an article titled ‘Whisky Galore: Developing an Energy Roadmap for Guyana,’ Kreeft wrote that there are companies, which would swoop in and take charge in Guyana if ExxonMobil begins to flounder.
Exxon’s share price has been unstable lately, and Kreeft said that a stable share price is what will guarantee the resilience of oil majors to aid deepwater developments, like Guyana’s, in the future. In this regard, he pointed to companies like Equinor and Total SA, which are perceived to be ‘greener’ than ExxonMobil. On the other hand, ExxonMobil has shown itself to be a laggard in its commitment to be a sound environmental steward, causing investors to dump stocks out of dissatisfaction, in the past few years.
The company has placed its bets on Guyana, hoping to pump as much oil as it can to rake in a lot of revenue due to a lopsided production sharing agreement (PSA), with the support of Vice President, Dr. Bharrat Jagdeo, who has said that he is in favour of aggressive production of Guyana’s oil.
Kreeft pointed to a report by the Institute for Energy Economics and Financial Analysis (IEEFA), which states that revenues from the oil will be insufficient to cover Guyana’s deficits, support new spending and build wealth.
How can Guyana help itself, then? Kreeft gave advice Guyana’s leaders have read in the newspapers many times but are yet to implement. He advises the strengthening of the Natural Resources Fund (NRF) to ensure it can fulfill its mandate, and having an agency established to be Guyana’s eyes and ears in oil with responsibility for its concessions. Kreeft also advises having a state energy company to be the negotiating partner of all oil and gas activities and that advice is taken from countries, which have properly managed their petroleum sector, such as Norway.
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