Opposition seeks renegotiation of Exxon contract- Patterson

Opposition Member of Parliament, David Patterson said the A Partnership for National Unity + Unity Alliance For Change (APNU+AFC) is not opposed to Government renegotiating the 2016 Oil Contract with ExxonMobil and its partners for exploration and production in the Stabroek Block.
ExxonMobil has long said that the “sanctity of contracts” must be respected – a position once held by the David Granger Administration–but Patterson told the National Assembly that a better oil contract could be put in place.
“Mr. Speaker, the opportunities to utilize our gas reserves are enormous and as we have stated before, the opposition will lend our support to the Government in negotiations with the Stabroek Block Operators in getting, a better oil contract, lowest price for the gas, and better conditions for the Guyanese public,” he told the House.

Patterson said while Guyana is undoubtedly grateful to the international oil companies for helping to unlock its potential in the area of Oil and Gas, the governance systems must be improved to prevent much wastage of its resources as a result of inefficiencies and corruption.
“Without an upgrade in our present governance systems our non- oil economy, will see little if any growth, at least not in keeping with an oil rich economy,” he told the House as the 2022 Budget Debate continued on Thursday.
He posited that the deficiencies in the political and economic governance systems have been exposed in the Budget 2022, contending that in the absence of extensive studies and due diligence, the People’s Progressive Party/Civic (PPP/C) Administration has proposed a few mega projects, it describes as “important and transformative.”
Further, he bemoaned the lack of emphasis on the country’s premier tertiary educational institution – the University of Guyana – to build capacity among citizens.

“We see little investment in research and development activities, which investments will provide the opportunity for our highly trained professionals to work in Guyana on our major technical problems and challenges – the solutions of which will drive national development.
Our lack of attention to research, for instance, is manifestly obvious in our ignorance of the causes of the low fish catch. Moreover, the lack of appropriate research and technology will likely cause the $200 million solution in the Budget allocated for “fish cages” to fail – thus condemning another group of hard-working Guyanese to the breadline,” the APNU+AFC told the Assembly.

He argued that the Government, in proposing the largest budget in the country’s history, appears to be “throwing money” at issues without conducting proper analysis. In support of his contention, Patterson pointed to the gas-to-shore project, in which the Government objected to the Parliamentary Natural Resources Committee conducting a proper assessment of its viability.
“Mr. Speaker, a detailed study of this project would show that the pipeline solution proposed is simply not the best to utilize our natural gas resources. The pipeline, gas to shore solution is much too expensive. It is transporting gas for electricity generation at a cost of about US$4.50 per million Btu, a cost for transportation that exceeds the average market price for gas worldwide over the past year. This cannot and will not result in cheaper electricity for our nation,” Patterson argued.

As part of the $552.9B National Budget, the Irfaan Ali Administration has set aside $29.4B to finance its Energy Expansion and Diversification Programme of which $20.8B will go directly towards the execution of the Gas-to-Energy Project in 2022.
However, Patterson pointed out that only recently the proposed 1,800 km pipeline designed to transport 1.2 billion cubic feet of gas per day between Israel and the European Union, has been put on hold, partly, because of concerns of a lack of financial feasibility expressed by both the Israeli and the US Governments.
“This concern about feasibility for that pipeline project should have raised a red flag for our Guyana pipeline project since the EU pipeline would be transporting gas at more than 30% less cost than our pipeline project,” the APNU+AFC MP reasoned.
He submitted that had the Government agreed to further studies, it would have found that in some cases, transporting gas in the form of compressed natural gas (CNG) to shore by ISO Containers is much more cost effective than a pipeline. He estimates that it would be almost 75% cheaper than a pipeline.
“Further studies would also likely have brought to light that the ISO Container method of transporting gas has the possibility of opening huge export markets for Guyana into CARICOM and Brazil,” Patterson added.
The APNU+AFC Parliamentarian also roast the Government over the budgetary measures proposed for 2022. He said it would appear that Government is seeking to transform Guyana into a “nation of truck drivers” as he alluded to the tax breaks granted to businesses hoping to tap into the Oil and Gas Industry.

The Government intends to reduce the excise tax and remove VAT from a series of vehicles. The 10% excise tax and the 14% VAT on importation of new motor trucks of any tonnage for transport of goods will be removed, while the importation of new haulers for pulling containers or similar vehicles for pulling, will also see the removal of VAT of 14 percent. Similar concessions are being offered to businesses seeking to import other categories of vehicle including double cab pickups below 2000 cc.