New concerns raised over former Exxon VP securing contract to monetise Guyana’s gas

Aug 20, 2024 News

Kaieteur News – A company established by the former Vice President of ExxonMobil Guyana Limited (EMGL) with less than a year experience was awarded a contract to monetise Guyana’s gas resources.

Founder and CEO of Fulcrum LNG, Jesus Bronchalo worked with Exxon for almost two decades.

Government advertised earlier this year, locally and internationally, through a Request for Bids (RFB) for the Design, Finance, Construction, and Operation of essential gas infrastructure to support upstream developments in Guyana. Proposals were invited from qualified developers for comprehensive solutions to develop the required gas infrastructure, which includes the necessary pipelines to connect and monetize upstream gas.

Of the 17 bids opened, Fulcrum LNG, founded by Jesus Bronchalo was selected by the Government of Guyana. Bronchalo worked 19 years and one month for ExxonMobil. The last position he held for the company was Vice President and Chief Commercial Officer for the Guyana operations; his tenure ended in February 2023.

According to reports, Bronchalo months later- in July 2023- launched the energy company, Fulcrum LNG, boasting “experience and expertise across all aspects of the oil and gas value chain, including low-carbon solutions.”

The company on its website stated, “Our gas infrastructure development approach enables faster development and execution of projects which allows for faster revenue generation, delivering reliable energy to the world, and providing decarbonization alternatives by switching to significantly less-polluting energy sources.”

Importantly, the company said its partners with some of the industry’s leading global engineering, technology, and finance firms, as well as global LNG buyers, to deploy the most advanced technologies and sustainable solutions that will generate maximum value for its clients.

There were no mentions of completed projects by Fulcrum on its website. The deal between the GoG and the former ExxonMobil Executive continues to raise eyebrows as company details remain sketchy. It should be noted that Fulcrum LNG would be entrusted with developing the country’s gas resources for monetisation purposes, however given its association with ExxonMobil, stakeholders remain concerned about the interests of Guyana being protected in the transaction.

Opposition Parliamentarian David Patterson in an invited comment told Kaieteur News, “Less than a year later (after) leaving Exxon, this company was awarded this contract. The company has no track record, being formed a little while ago.”  He pointed out that the Production Sharing Agreement (PSA) with Exxon highlights the need for the oil company to conduct a feasibility study for the utilisation of the gas resources.

Additionally, Patterson urged, “The GoG paid a former Trinidadian Minister US$20,000 to produce a policy, which resulted in a substandard document. Based on this, any new contract should have it terms of reference placed in the public domain for comment, or we will end up with a similar end product.” The former minister also reminded that the Government of Japan prepared a draft Gas Road Map around the year 2018 and offered to produce a more comprehensive document, free of charge. He therefore asked why that option was not explored by government.

Conflict of Interest?

The Ministry of Natural Resources in June defended the award of the contract to Fulcrum LNG.  It said an “independent and technically competent” evaluation team was established by the ministry to conduct a detailed and robust evaluation of all 17 bids. Fulcrum LNG was deemed the most responsive compliant bidder and ranked No. 1, followed by CNOOC Power and Gas Group, ranked No. 2, and a consortium of local and international companies which were ranked No. 3. “As such, Fulcrum LNG will be supporting the government and the Stabroek Block operator, ExxonMobil Guyana, to utilise the non-associated gas – serving as an independent development,” the Ministry said.

Meanwhile, with regard to the company’s CEO, the ministry acknowledged that while Bronchalo was a former senior employee of Exxon, at the time of the evaluation, his involvement in Fulcrum LNG was known, and his previous relationship with ExxonMobil was not seen as presenting a conflict of interest, since he had severed all ties with the company. The contract award to Fulcrum LNG was first announced by President Irfaan Ali during a press conference at State House in June.

He explained, “We recently concluded the expression of interest for a major gas project outside of the Wales development (Gas-to-Energy project). We had a company identified, that company with the Government of Guyana and Exxon and its partners will now have to have discussions and we will have to together arrive at a model and a plan as to how we will advance this major gas development in our country.”

The Head of State was keen to note that the government has since assembled a technical team to participate in the discussions and draft a model for the utilization of the gas resources. President Ali anticipates a Heads of Agreement in this regard will be signed by next year. He said, “What we want is the monetisation of the gas as fast as possible to add an additional revenue stream and it’s not only gas, it’s the condensate that comes with it. For a matter of fact that has tremendous opportunity and potential for us but we can’t know that, we can’t know the degree of opportunity until the full analysis, technical (and) financial, is completed for us to know what we have.”

To this end, Ali revealed that a number of possibilities are being examined, including the export of energy through the development of an energy corridor to Brazil and Suriname. In addition to that, he cited the marketing of by-products from the natural gas. Ali also hinted at the possibility of a second power plant to position the country as an exporter of electricity.

• Contract, Exxon, Fulcrum LNG, gas, Ministry of Natural Resources, monetize