Nov 23, 2022 News
…will continue to milk while Guyanese suffer
Kaieteur News – Opposition Leader Aubrey Norton on Tuesday accused the People’s Progressive Party (PPP) of failing to safely manage Guyana’s burgeoning oil and gas sector.
Norton at his weekly Press Conference referenced the Auditor General’s (AG) Report which flagged the unavailability of equipment to respond to large oil spills, even as oil production increases.
The Opposition Leader in response to questions posed by Kaieteur News insisted that that the Government must be removed from office for better management to prevail.
“We have to organize with our citizens, we have to meet with people, educate them so that they understand the direction the Government is going and then we vote them out of office. The solution to the problem is a new Government,” he said.
He continue, “It is not the first time the PPP is in Government and what we are seeing is clearly an incompetent, corrupt, and divisive Government that we need to get rid of and we will continue to engage the people to let them understand that and do the work to get rid of the People’s Progressive Party.”
Norton surmised that the Government does not have a comprehensive approach to managing the oil and gas sector. As an example, the Opposition Leader referred to the recent announcement by Attorney General, Anil Nandlall, SC that regulations will soon be put in place to govern the Local Content Act.
Norton argued that a “serious Government” would have made such provisions while crafting the law. “They see it (the oil sector) as a cash cow, they are going to milk it, they are going to get rich and then they will go their way while the Guyanese people continue to suffer,” he remarked while emphasising that the PPP is focused on “making money for themselves [and] about taking the resources from oil and gas and putting it into infrastructure in a way that it satisfies their cronies, their contractors, etcetera.”
The AG in his Report appealed to the authorities for there to be a stocktaking exercise of all assets available nationally, regionally and internationally, for a quick response to an oil spill incident.
In his performance audit report of the country’s National Oil Spill Contingency Plan, Deodat Sharma (the AG) said the inventory should be compiled appropriate to the risks assessed and the ranges of environmental operating conditions at possible spill locations.
Sharma was keen to note that his urgent recommendation is premised on the fact that a list of all response resources available for national-level response to an oil spill is still to be compiled by the Civil Defence Commission (CDC).
“The Head of the Civil Defence Commission explained that the response resources readily available are appropriate for responding to small spills but not medium or large oil spills. A list of response resources is referenced in the National Oil Spill Contingency Plan however; it only represents the equipment that is currently available in Guyana,” he said in the Audit Report.
In this regard, Norton believes that even though Government has commenced spending revenue from the sector, it is yet to develop the requisite capacity. In addition to oil spill response, Norton pointed to the nation’s capacity to conduct audits of the oil companies’ expenses as well.
Meanwhile, Economist and Opposition Spokesperson on oil and gas matters, Elson Low said that “the PPP has left Guyana in a very vulnerable position. We know that first of all they have refused to enforce any of the elements of the permits regarding full coverage insurance that they have refused to engage the insurance issue.”
Low also reminded that there was recently an oil spill off the country’s coasts for which no report was published to inform the nation as to what exactly occurred. As such, he reasoned, “you have to ask yourself if that’s going to be the way that the Government treats with oil spills, if that’s going to be the way the Government treats with a very huge risk that the country faces then I think we are in a very, I think the word tragic is also appropriate here.”
Presently, oil is being produced in the Liza One and Two fields in the Stabroek Block by Esso Exploration and Production Guyana Limited (EEPGL) also called ExxonMobil Guyana. A third project, Payara is expected to come on stream next year which will take the total oil production up from the present approximate 300,000 barrels per day to about 500,000 barrels per day.
Meanwhile, the fourth project, Yellowtail, with a production capacity of approximately 250,000 gross barrels of oil per day has been given approval for startup in 2025.
It must be noted that while these activities are taking place, Government is yet to secure full liability coverage from ExxonMobil to ensure they take full responsibility for the damages caused by an oil spill, which will not be covered by the limited insurance offered by the operator of the Block.
The oil company assured that there is US$600M that has been put aside by the Stabroek Block operators to cover oil spills per disaster in the rich Stabroek Block. In addition to that, it was reported that a US$2B parent company guarantee is being negotiated.
This means, however, that the immediate clean up finances could only amount to US$2.6B, meaning Guyana could be left to foot the additional charges that may be associated with an oil spill.
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