Why is Oil Chief upset with Exxon?

Dear Editor,

The oil chief comes across as quite angry with Exxon. Why? Paid propagandists known for defending Exxon have become very critical of the multinational giant over the last two months. They front for the chief. Does the attack on Exxon have to do with failure of the shore base being constructed at the artificial island at mouth of the Demerara River and the gas to power (GtP) the Power Station being constructed at Wales?

There were (are) serious flaws in the design of both projects. Both are failing; neither was designed by Exxon but the oil giant is paying for them from oil costs. The artificial island payment plan has been made up front as rental fees for future use. The power station will be owned by the government, but the planned island shore base will be owned by a private consortium even though the cost of construction is largely paid for by Guyana money from oil revenues or oil cost.

Were there proper and adequate feasibility and engineering studies by experts in the field for both projects? The island seems to be poorly engineered and is failing, resulting in accidents, death, injuries, and destruction of equipment. The Chief Safety Officer assigned over construction of the island died by drowning on the island. He was swallowed up when the ground under his feet gave way, resulting in creation of a huge hole. The safety officer fell in that cratered hole, falling and drowned below. The death was carried in the local media. Was an investigation done on the death or of other accidents?

Repair work was done to cover the hole. But the island has to be constantly reinforced; stronger sheet pilling had to be added around the island to hold it up. A brand new 400 ton crane valued at millions of American dollars operated by the reputable Saipem company was brought on the island to shore it up. While being tested, the land gave way and the state of the art, high tech, computer-controlled crane toppled on the first day of use. The operator suffered critical life-threatening injuries, and the crane was destroyed.

Competent engineers have suggested modifications to make the island stable. Rumour has it that the oil chief demands additional investment from Exxon (from cost oil) for an extension of the island so that it can be properly engineered to meet requirements to give the island the intended original stability.

Exxon is resisting the additional demanded of massive influx of funds that will affect its return on investment as well as Guyana revenues from oil profits. Apparently, Exxon engineers concluded that the island project is not doable with costs far outweighing benefits.

Similarly, the gas to power (gtp) project has been inadequately designed and is very unstable. It requires an additional US$50 million to shore up the project with additional works to prevent a collapse. It is understood that the foundational pile was designed for sixty feet. It has to be redesigned for 300 feet to give it stability.

The two projects are financed by costs oil. The island to be operated as a shore base has a small investment of a few million dollars from private investors with the rest, over 80%, coming from cost oil, should have been owned by the state of Guyana. This is a devious and criminal act. The amount of money for personal gains from both projects is not materialising as anticipated. Is this why the czar is very unease?

The projects can’t be completed before the 2025 elections, impacting on the czar’s expected political and financial outcomes. The cost overruns have eaten up into expected personal gains built into the contracts. Exxon is hesitant and resisting pressure into committing more funds on two bad projects that won’t yield desired outcomes and that will eat away the country’s revenues. Political mileage, ego, and personal account are affected. Is that why Exxon is being attacked?

Yours Truly,
Roopchand Sharma