Cart before the horse? Govt. inviting project proposals before ironing out gas strategy

Jan 21, 2024 ExxonMobil, News, Oil & Gas

Vice President, Dr. Bharrat Jagdeo

Kaieteur News – The government has opened the floor for private companies to submit proposals for the design, finance, construction, and operation of vital gas infrastructure. This move is part of the government’s broader strategy to accelerate the development of its natural gas resources.

However, the timing of this request for proposals (RFP), which precedes the finalization of a comprehensive gas strategy, has sparked concern among stakeholders about the hurry to seek proposals before completing the gas strategy.

The government has a record of putting the cart before the horse in the oil sector. Last year, the government launched the oil auction, but then stopped to overhaul the oil law in the middle of the process. This dragged out the completion of the auction.

The gas infrastructure RFP said the government wants to rapidly develop the gas resources. It aims to establish an open-access infrastructure system that would bolster both existing and future upstream oil and gas developments. This includes necessary pipelines and other infrastructure crucial for monetizing the offshore gas. Notably, the projects are expected to be entirely financed and owned by private entities, indicating a clear preference for limited government ownership.

The government has set a stringent criterion for applicants, who must demonstrate their capability and credibility. The requirements include detailed project plans, cost estimates, legal agreements, and for consortiums, proof of agreement. The deadline for proposal submissions is firmly set for 9:00 am on February 27, 2024, with the National Procurement and Tender Administration Board designated to receive and open the submissions.

This call for proposals is being issued as Guyana is in the midst of crafting a gas strategy, expected to outline the nation’s approach to developing its gas resources. There is very little indication about what the strategy will say, given the confusion caused by the initial strategy draft, eventually rebranded as a discussion paper because of issues acknowledged by Vice President Dr. Bharrat Jagdeo.

Jagdeo has been vocal about the need for urgent development of gas resources, stating, “We need [ExxonMobil] to share our view that these resources must be developed, and developed urgently because of this timeline.” He further added that the government would consider other developers if ExxonMobil is not interested in gas development.

He did not say whether the government wants to ask Exxon to relinquish its gas discoveries, noting that these are discussions which must be had with the company.

During his press conference last week, Jagdeo addressed questions regarding the timing of the RFP and its relation to the gas strategy. He said the RFP and the gas strategy are separate entities and can progress concurrently. “The two are not the same, the gas strategy and the Request for Proposal. I’ve explained that that work can go in parallel.”

Jagdeo also said the government wants to utilize the surplus gas from the Gas-to-Energy project to sustain a midsize fertilizer plant, to support the agriculture sector. The government is investing tremendously in agriculture to help meet the Caribbean region’s food supply needs.

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Construction, Dr. Bharrat Jagdeo, Infrastructure, request for proposals (RFP), Vice President

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