Mechanical failure and Guyanese knowing this way

Nov 03, 2023 Editorial

Kaieteur News – Even on his way out the door and with less of a direct role in Guyana’s offshore oil operations, the CEO of Hess Corporation, Mr. John Hess, can be depended on to spill the beans. It might be belated, and may not be the whole story, but Mr. Hess is a good source for what is really going on in the ExxonMobil-led consortium operating 120 miles from Guyana’s shoreline. Thanks to Mr. Hess, Guyanese now know of something called ‘mechanical failure’ occurring on the Liza Destiny vessel during this year’s third quarter.

This is astonishing, for the third quarter stretched from July 1^st to September 30, and Guyanese are now learning of this in a by-the-way manner at the end of October, compliments of Hess Corporation’s third quarter earnings report. Wall Street analysts and Hess watchers know about this ‘mechanical failure’ on the Liza Destiny before Guyanese know. As could be gathered, this mechanical failure was significant enough that lower production numbers were recorded. Lower oil production means less profits, and those are paramount for analysts and shareholders.

Meanwhile, what was involved in this so-called ‘mechanical failure’ and its possible threats to the safety of Guyana’s environment and people have been kept away from citizens. Guyanese are only learning about this now, with their own government hiding the development from them. Why is this necessary, and how can this ever be condoned? What was the severity of this mechanical failure? When did it start, and how long did it take to fix? For emphasis: why was the Ministry of Natural Resources mum on this, is it for reduced production numbers in its Petroleum Management Programme? Though Guyana’s chief oilman, Bharat Jagdeo, recently said that he was prioritizing policymaking, this was something for Guyanese to know, so why didn’t he inform them? How could Guyanese with key responsibilities for this trillion-dollar sector shelter under a blanket of silence? How could they, when Hess Corporation had to come clean on that mechanical failure development and link it to lower production and, hence, lower earning numbers.

Undoubtedly, what is given the bland company label of ‘mechanical failure’ had to be material. If not, there would have been no need to note its occurrence in the third quarter earnings report, and then still go into an explanation for financial analysts and other interested parties, as Mr. Hess did. Guyanese also have a right to that information, and not at the end of the quarter, but as it happened. Nobody is talking about the run of the mill activities, as in a light bulb going out, or an air conditioning unit breaking down. For that mechanical failure was big enough that it had to be mentioned in the third quarter earnings report.

Analysts and investors watch those quarterly earnings reports as if their fortunes and reputations depended on it. It is so in many respects, which explains their keen vigilance. With the spotlight shining so brightly on them, CEOs cannot afford to get cute or cagey with numbers, or worse still, they don’t have a convincing emergency to support the difference in quarterly earnings. So, they share the whole story, no matter how unpalatable and wounding it may be.

Contrast that standard to what operates in Guyana, with the PPPC Government being the sole source of information on oil developments, oil numbers, and anything to do with oil operations offshore. To get a sliver of information on most oil-related matters, Guyanese have to engage in virtual wrestling matches or pull the teeth of those standing as stewards of the oil sector. If it is not dense silence being the norm, it is actual denseness displayed by those intimately involved in overseeing the sector.

What else has happened out there, or could be happening currently, that Guyanese need to know? In the event of an oil spill of significance, when would Guyanese know, and how much would they be told? As matters stand, Guyanese may be forced to wait for some company release to be informed about what endangers their welfare. Little is to be expected from the PPPC Government, which is comfortable dealing in darkness and the emptiness of scant information released.

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Editorial, Guyanese, Hess Corporation, Liza Destiny, Mr. John Hess

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