Guyana could face suspension, possible delisting from EITI for failing to update oil reserves

Jul 08, 2024 News

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Kaieteur News – Guyana, a member of the Extractive Industries Transparency Initiative (EITI) since 2017, can face suspension and even delisting from the body for failing to disclose data on the country’s oil, gas or mineral reserves.

EITI is a global standard that promotes the open and accountable management of oil, gas and mineral resources in member states. Guyana became the 53^rd EITI implementing country on 25th October, 2017.

The country is therefore expected to abide by the requirements and standards outlined to maintain its membership. Notably, Requirement Three which is specific to exploration and production activities states that implementing countries and companies are expected to “disclose data on proven economic oil, gas or mineral reserves, where available.”

Meanwhile, further research conducted by this newspaper found that the country can be suspended for failing to meet these requirements and principles of the EITI.

Article 8.1 states, “Where it is manifestly clear that a significant aspect of the EITI Principles and EITI Requirements are not adhered to by an implementing country, the EITI Board will suspend or delist the country.”

Where the EITI Board is concerned that adherence to the EITI Principles and EITI Requirements is compromised, it may task the EITI International Secretariat with gathering information about the situation and submitting a report to the EITI Board.

Suspension of an implementing country is a temporary mechanism. The EITI Board shall set a time limit for the implementing country to address breaches of the EITI Standard. During the period of suspension, the country will have the status “suspended”. If the matter is resolved to the satisfaction of the EITI Board by the deadline, the country’s status and level of progress will be reinstated, however, if the matter has not been resolved to the satisfaction of the EITI Board by the deadline, the EITI Board will delist the country.

Guyana was suspended temporarily by the EITI Board on 1 February 2023 for failing to publish its 2020 EITI Report. Following the publication of the report on June 30, 2023, the Secretariat informed that the suspension had been lifted.

A new suspension could however be looming as the government has kept citizens in the dark regarding the oil reserves in the Stabroek Block, although the operator, ExxonMobil Guyana Limited (EMGL) has been conducting appraisal activity to determine the value of its discoveries.

The last resource estimate in 2022 of the Stabroek Block determined that the country had approximately 11 billion barrels of recoverable oil reserves. Since then, however, Exxon has announced an additional eight discoveries.

President Irfaan Ali during a press conference last month at State House, Georgetown was asked by Kaieteur News to comment on the perceived lack of transparency in the management of the petroleum sector by his government.

In response, the Head of State explained, “I can’t respond to perception, what facts are you bringing? If you are saying, there is lack of transparency where is the lack of transparency?” Notably, the President did not allow Kaieteur News to cite specific examples but he noted that he does not need to address matters relating to the sector since the VP answers questions weekly in that regard.

After Ali pointed to the enactment of a new Petroleum Activities Act to govern the sector, the passage of the Local Content legislation, as well as the new Production Sharing Agreement (PSA) crafted by his government, Kaieteur News alerted the Head of State that the country is still in the dark on the interest rates being charged while there has also been no update to the Stabroek Block reserves in two years. The President however maintained, “I don’t know that there’s a lack of transparency. I can’t agree with you and I can say to you that all the revenue we have received is published according to law and there is remedy in the legislation if those revenues are not published.”

Meanwhile, the Head of State noted that work was ongoing to update the country’s reserves and when information in that regard becomes available, it will be shared publicly. He said, “Now in terms of the finds and the commercial viability, that is ongoing work and as the information becomes available, whatever information is there that becomes available will be shared publicly. You can rest assure we have no interest in not revealing the reserves that we have because we want more persons to be attracted.”

While the President has committed to revealing the updated reserves, as this would be in the best interest of the country, the government has refused to provide the public with recent data in that regard although Exxon has publicly revealed that appraisal activities are ongoing to determine the viability of the resources that have been discovered to date.

The last resource estimate in 2022 of the Stabroek Block determined that the country had approximately 11 billion barrels of recoverable oil reserves. Since then, however, Exxon has announced an additional eight discoveries. Stakeholders believe that the government is deliberately withholding the updated oil reserves from the public as this would lead to more public pressure for a renegotiation of the 2016 oil deal with Exxon.

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• Ali, delisted, EITI, reserves, suspension

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