Opposition demands justification from Govt. for extending a portion of  ExxonM’s Stabroek Block

Aug 18, 2023 ExxonMobil, News, Oil & Gas

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Kaieteur News – “Billions of US-dollars are at stake.” This was the Opposition’s contention yesterday as the political group questioned the Government’s move to allow United States oil major, ExxonMobil, an additional year to explore the resource-rich Stabroek Block.

The company was expected to give back (relinquish) a portion of the block, equivalent to 20 percent in October this year, however it was granted an extension by the government which gave into claims of the company’s work programme being hampered by the COVID-19 Pandemic.

This is according to Vice President Bharrat Jagdeo during a press conference at Freedom House back in June. The VP told reporters, “The force majeure that was given to them in the COVID period extends the relinquishment provision.”

Notably, the 20 percent portion of the Stabroek Block is equivalent to 120 oil blocks or one fifth of the entire 26,800 square kilometers or 6.6 million acres.

With no documented proof that the company’s operations were indeed impacted by the Corona Virus Pandemic, the Opposition is demanding an evaluation by the administration to confirm Exxon’s claims.

Economic Advisor to the Leader of the Opposition and Spokesperson on Oil and Gas, Elson Low while speaking at a press conference on Friday explained that while the pandemic is a reasonable explanation, government should provide the evaluation it conducted for the public to analyze.

Low stressed the importance of the document citing that the administration has a history of not conducting requisite studies and should justify its decision for the extension and clarify that it was not pulled “out of the clear blue sky”.

According to him, “While I can understand COVID-19 being a reasonable reason, what I would always ask is can the government provide to the public, a document which is evaluating the situation; which they were able to receive expert advice as to whether or not they should relinquish.”

Low pointed out that the over the past few years, ExxonMobil through the Stabroek Block operator, Esso Exploration and Production Guyana Limited (EEPGL) has substantially ramped up oil production, pushing Guyana’s Gross Domestic Product (GDP) above its forecasted growth.

He therefore reasoned, “This indicates that the company’s operations are functioning and have been functioning well. What we need to see is what evaluation has the government done to determine that the company’s operations were inhibited and what evaluation was done to give us an understanding that the company should not be relinquishing the blocks.”

To this end, the Economist flagged that the 20 percent that should be relinquished by Exxon could be valued tens of US-billions. Given its potential, Low argued he does not believe a determination should be made by a single individual who does not feel like forcing the company to not give back a portion of the Block.

He asserted, “That can’t be the way that the country is run. We need to see an evaluation that needs to be released to the public so that we can see the government did its due diligence in making this decision. This can be a multibillion-dollar decision; of course blocks that are relinquished can then be auctioned.”

The Opposition Economist said he suspects that the government does not have such a document but nonetheless issued a challenge for it to be released.

Meanwhile, Opposition Leader, Aubrey Norton commented that there is need for transparency and accountability in the sector, especially as it relates to the extension granted for the relinquishment of the Block.

He argued, “Jagdeo cannot tell this nation that it was done as a result of COVID without providing clear documentation so that we can know the rationale…the only way we could verify it, is by having the documentation to be able to discern whether what he’s saying is true, or he is just being Jagdeo and formulating his realities as he moves along and send them out as if they are truths.”

Jagdeo responds

Notably, Vice President Jagdeo was asked during his press engagement about the Opposition’s call for government to release the document that shows why government is extending the oil company’s hold on the Stabroek Block when he provided an unrelated response.

Kaieteur News pressed the VP, explaining that the relinquishment was expected to occur this year, in keeping with the 2016 Production Sharing Agreement (PSA); however, it was extended due to the COVID pandemic. To this end, he said, “That’s the force majeure; we looked at the force majeure already. That’s a different matter. We explained it in the period and why and all of that.”

In a follow up question Kaieteur News asked the VP about the due diligence by government to prove the oil company’s operation was indeed affected when he responded, “Don’t worry with that. It’s just another waste of time. I’m not wasting my time anymore with Norton.”

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• evaluation, justify, opposition, relinquish, Stabroek Block

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