Oil conference failed to address critical issues – Article 13 

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…calls on Gov’t to facilitate widespread consultation on Oil and Gas Sector, 

Describing it as a “feel-good” conference, Article 13 said the just concluded International Energy Conference and Expo failed to address critical issues among them the deficiencies within the Production Sharing Agreement, and the Regulatory Framework, while excluding the opposition and civil society representatives.

“The foreigners who constituted the majority of the delegates must have left Guyana with the impression that there was total national consensus on all things oil, and that Guyana was heading to become the Dubai of the Caribbean. They could not be more wrong.

The Exxon Petroleum Agreement, the sector’s regulatory framework, the country’s environmental capacity and oversight, the mega-projects, and steps in place to prevent the Dutch Disease and the more damaging resource curse, are issues which the Government seems willing to leave to chance or treat as low priority,” the civil society organisation said.

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From the onset, Article 13, in a statement on Tuesday, said while the conference saw presentations and participation three foreign Heads of State and a host of foreign speakers – including Exxon’s Chairman and CEO Darren Woods, the absence of the parliamentary opposition and civil society representatives on the panels has not gone unnoticed.

“The absence at the higher level of Trinidad, with their century of experience in the oil and gas sector, could not escape attention,” the organisation added.

In light of the exclusions and the burning issues to be addressed, Article 13 called on the Government to have a domestic version of the conference but in the form of a consultation.

“It is entirely unacceptable that Guyanese had to learn from a prohibitively priced international conference, an additional trickle of information on the Government’s Gas-to-Shore and Amaila Falls Hydro projects. Article 13 is not satisfied that the Gas-to-Shore project is consistent with the Petroleum Agreement, but is satisfied that the announcement that the arrangements for the cost of building the pipeline will be treated as recoverable from oil proceeds is evidence that the Government does not take ring-fencing very seriously,” it said.

Article 13 also expressed dissatisfaction with the decision of Government to pursue the Amaila Falls Hydropower Project with all its costly risks, noting that the too the awarding of the construction contract without simultaneously entering a Power Purchase Agreement is putting the cart before the horse.

“We are satisfied too that a price being bandied about by Mr. Winston Brassington does not include all the costs and that Guyana and the Guyana Power & Light Inc. will be incurring significant additional costs, other than the nominal price tag,” it said.

It was pointed out that Ethiopia two days ago opened a 5,000 MW hydro project at a cost of US$4,200M or US$840,000 per MW. Guyana is expected to pay US$750 million for 165 MW, a unit cost of US$4.5 million per MW, or 5.3 times that of Ethiopia.

“Let us look at this another way. At a BOOT price of US$750 million, the operator will have to recover some US$37.5 million per annum, exclusive of any interest, operating cost and profits. And of course, the deal will be sweetened by the full range of tax concessions, including a 20-year tax holiday on income, property, withholding and quite possibly employee taxes as well. And whether we utilise the power or not, we will have to pay for every unit produced,” it reasoned.



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