Qatar’s Amir to visit Guyana

Sep 10, 2023 ExxonMobil, News, Oil & Gas

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…for direct negotiations on oil block exploration; new embassy – Pres. Ali

Kaieteur News – Qatar’s Amir Sheikh Tamim bin Hamad Al Thani is expected to visit Guyana soon to discuss areas of co-operation, including direct negotiations between the two states for oil exploration in Guyana.

This was revealed by President Irfaan Ali during a press conference at State House on Saturday morning. During the question-and-answer segment, the Head-of-State told reporters that Guyana has been expanding its bilateral relations with various countries.

To this end, he noted, “We have a very active bilateral engagement with the state of Qatar. The Amir is coming to Guyana to pursue and follow up on a number of initiatives that we have under discussion including investment, including support in oil and gas- they have already offered technical support.”

In addition, President Ali pointed out that companies from Qatar are participating in the ongoing auction of 14 of Guyana’s oil blocks offshore. Moreover, he said, “They (Qatar) have expressed a direct government to government interest in exploration that is a government-to-government collaboration on exploration. They are working with us on some loans and I know they are in the process of finalizing arrangements to establish a formal footprint with an Embassy here in Guyana.”

Ali was not inclined to share further details regarding the upcoming visit by the Qatar leader but assured that the media would be informed in due course on when the official will arrive.

His Highness Sheikh Tamim Bin Hamad Al Thani is the Head-of-State of the country and commander-in-chief of the Armed Forces and guarantor of the Constitution.

Back in May this year, President Irfaan Ali held talks with the Amir during an official visit to Qatar. It was reported that the two leaders discussed co-operation relations and ways to enhance and develop them, especially in the areas of investment and energy, among others.

The United States Energy Information Administration in a March 2023 Country Analysis of Qatar highlighted the major role that the energy industry plays in the country’s economy. According to the International Monetary Fund, Qatar’s earnings from its hydrocarbon sector accounted for 81 percent of the country’s total government revenues in 2021, up from 77 percent in 2020. Hydrocarbon export revenues rose from $47 billion in 2020 to nearly $77 billion in 2021.

Qatar was also listed as the world’s sixth-largest dry natural gas producer (behind the United States, Russia, Iran, China, and Canada), the second-largest Liquefied Natural Gas (LNG) exporter, and the third-largest holder of natural gas reserves in 2021.

Moreover, with proved reserves of crude oil estimated at 25.2 billion barrels as of January 1, 2023, Qatar held the 6th largest reserves in the Middle East and the 14th largest in the world. Because all of Qatar’s oil fields are mature, Qatar’s crude oil production declined from its highest level of 852,000 barrels per day (bpd) in 2008 to 616,000 bpd in 2022.

Given its vast experience in the petroleum sector, Guyana is well positioned to learn from the experiences and gain from technical capabilities of Qatar.

While there can be no question of the wealth of knowledge to be shared with Guyana, the local administration has refused to allow Parliamentary scrutiny for oil blocks awarded through direct negotiations.

In fact, Government is now empowered to conduct direct negotiations for the award of the country’s oil blocks through the updated oil law.

According to the freshly passed Petroleum Activities Act, the process to grant a licence can be executed through two primary mechanisms: a competitive tender or through direct negotiations. The latter is permitted when “special circumstances exist, which, in the national interest or national security, justify the use of direct negotiation to grant a licence.”

While the provision may ostensibly provide flexibility to the government in its licensing process, it remains contentious among transparency advocates and certain sections of the public.

Although the government has cited reasons such as the opportunity to foster regional energy cooperation and safeguarding national interests, for the potential government-to-government partnerships, this process requires a deeper layer of scrutiny. The government has said very little about how such partnerships would work. The provision explicitly allows for potential partnerships with nations such as Qatar and India, which government said have shown interest in Guyana’s oil.

During the International Energy Conference hosted in Guyana this year at the Marriott Hotel, Vice President Bharrat Jagdeo revealed that the governments of Brazil, Qatar, India and Kuwait have just expressed interest in direct negotiations with Guyana.

Guyana has become a hot spot for exploration activity as a result of the exciting success of the Stabroek Block operated by U.S oil giant, ExxonMobil. The company and its partners, Hess Corporation and CNOOC have since discovered more than 11 billion barrels of oil, while exploration of the 26,800 square kilometer block continues.

Presently, Exxon is the only company producing oil in Guyana. The company has reported an average production rate of 400,000 barrels per day but government hopes to increase production to about one million bpd by 2027.

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• Block, direct, negotiations, oil, Qatar

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