The Alliance For Change (AFC) in a recent statement slammed the government for its management of the oil and gas industry. Displeased with the government’s action, the party reiterated its calls on the People’s Progressive Party/Civic (PPP/C) to put in place full coverage liability for the petroleum production as is required by the Permits and demanded by almost all private citizens.
The party warned that following the most recent announcement there was a spillage of one barrel of crude oil from the EXXON operations, the cumulative amount since operation is not “one tablespoon” but “has now risen to one barrel, by volume, this is an over 10,000 percent increase, [which] highlights that the possibility of a major oil spill is high, and will continue to increase directly proportional to increased oil production.”
As a result, the AFC is insisting the Environmental Protection Agency (EPA) oversight mechanisms be strengthened. “It is unacceptable for this agency to be solely relying on the operator, for information on spillages and other hazard during oil production operations” said the party and urged the government to restore the rigorous oversight that was planned under the A Partnership For National Unity and Alliance For Change (APNU+AFC) coalition government.
Castigating the government for its irresponsibleness in scrapping the coalition’s oversight mechanism the party said the behaviour is to the “detriment of the nation.” Among the structures the government scrapped “include the highly specialised 36-member Oil & Gas Unit that was developed by the World Bank and the EPA for which the World Bank provided a UG $1 million grant.”
According to the party, “one component would have included 24/7 on-site EPA presence in order to obtain real time and accurate information, instead of having to rely upon and accept information solely provided by Exxon.”
The party reminded Guyanese “when this plan was brought to the PPP/C’s attention, they denied it ever existed; but when confronted with the document, the EPA Director claimed he didn’t know about it, since he wasn’t there when it was prepared; [and] surprisingly Minister Bharat contradicted the EPA Director by saying that the plan is being executed”
It is time for the Government to stop playing Russian Roulette on this most important matter, warned the AFC
Contract Amendment
Touching on the contract amendment the AFC said they noted in the media the government confirmed the 2016 Production Sharing Agreement (PSA) was amended in 2019, and this amendment sought to bring clarity to the coalition government’s previous position that royalty payments are not cost recoverable. “The article by Christopher Ram also confirms the APNU+AFC stated position that the 2016 contract was in fact based on the 2012 Model PSA as prepared by the PPP/C.”
It should be noted, the party said between May 2015 and January 2016, the Minister responsible for Petroleum was former President Granger, between January 2016 and July 2018, the responsible Minister was Raphael Trotman, from August 1, 2018, this portfolio reverted to former President Granger. “This amendment was penned under former President Granger stewardship.”
The party said while being previously unaware of the amendment, it is assumed that despite it being always known and accepted that any royalty payment was not cost recoverable, the parties may have wanted to make this more pellucid before oil production commenced.
Acknowledging the actions of the APNU+AFC government, the AFC says it clearly demonstrates that if the parties to the Contract are willing, a review and renegotiation of the existing contract can be undertaken, but this of course requires the necessary political will.
“The AFC once again reconfirms its willingness to support a review of the Oil Contract for the mutual benefit of both the Operators and People of Guyana.”
