Jul 03, 2022 News
By Gary Eleazar
Kaieteur News – With talks of renegotiating the Production Sharing Agreement (PSA) between the Guyana Government and Esso Exploration and Production Guyana Limited (EEPGL)—ExxonMobil Guyana—currently a hot button topic, it would be poignant to note, talks with ExxonMobil is akin to negotiations with a superpower.
At least, this is the assertion of Guyana’s Head of State, President Irfaan Ali, who gave the position last week, as he outlined the course forward with regard the development of the country’s gas-to-energy initiative in partnership with ExxonMobil Guyana.
He was at the time addressing Cabinet members, representatives of the business community, diplomatic representatives as well as Executives of the oil companies involved, namely ExxonMobil Guyana, Hess Guyana Corporation and CNOOC.
During his address, President Ali reflected on the recently concluded negotiations with the US Oil Major and told those in attendance, “let me be very clear this was no walk in the park, our partners are sitting here, negotiating with Exxon is like negotiating with a superpower state.”
As such, he was adamant while this was known, “don’t doubt our own capacity and the technical capability that we brought to this.”
Additionally, President Ali disclosed too that during the negotiations on the project that, “importantly the partners did not go to the table looking for an all-out victory, they went to the table looking to derive the best possible output for all the stakeholders and I congratulate them for this.”
Speaking to the results of the negotiations with ExxonMobil, the President used the occasion to publicly “thank all of our partners, I would like to thank the executives and team of Exxon, Hess, CNOOC” and in addition, the government members who worked tirelessly including Vice President, Bharrat Jagdeo and “his team for your collective demonstration of cooperation good faith and commitment with team work that got us to this point.”
Speaking to some of the benefits, arrived at through the negotiations with ExxonMobil, the President in addition to highlighting that the talks ended where it began in terms of free gas to Guyana, spoke to savings to be derived.
To this end, he told those in attendance that with the gas project scheduled to have a contract inked by the last quarter in the year, the project will cost the nation over the course of its life between four and five US cents per kilowatt hour. The President is adamant that this figure, down from the previous seven US cents per kilowatt hour, includes the full repayment of the 12” pipeline that would be providing some 50 million standard cubic feet of Natural Gas daily to the onshore project.
According to the President, with electricity bills slashed in half, it would mean that $20B would immediately be saved through the initiative, which would mean an additional $20B in disposable income in the pockets of Guyanese. Additionally, President Ali said with the new power plant in place, it would also mean an additional US$11M in monthly savings as a result of the savings to be had from purchasing less fuel for electricity generation.
As it relates to the other proposed facility, namely the NGL plant, President Ali noted that the industry generates some $10.1B in revenue.
As such, he noted that with the NGL plant being able to supply some 3,500 barrels daily, it would surpass the local demands which requires about just over 780 barrels.
With this in mind, the President said that not only would there be a $7B saving but with cooking gas presently retailing at $4,500 per 20-lb cylinder (and the price varies from place to place), the President said, with the NGL plant up and running, the administration would be able to provide its citizenry with cheaper cooking gas.
He did rule out the provision of free cooking gas to the public, since according to President Ali that would not be sustainable.
Prefacing his pronouncements on the project and the administration’s desire to move ahead with the project, the president was adamant that there had been enough time given to the citizenry to question the merits of the project.
According to the President, the matter had been fully ventilated and all questions answered. It should be noted that there has been no formal briefing by the President or the Vice President to fully question the project as intimated by Ali.
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