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6th oil project must be ring-fenced with more royalty for citizens – PNC/R

6th oil project must be ring-fenced with more royalty for citizens – PNC/R

ExxonMobil, News, Oil & Gas

Kaieteur News – The main political opposition party, the People’s National Congress Reform (PNC/R) is calling on government to utilise the application presently pending for Exxon’s sixth offshore project in the Stabroek Block to bring additional benefits to Guyanese.

Economic Advisor to the Opposition Leader, Elson Low

Economic Advisor to the Opposition Leader, Elson Low

In an exclusive interview with this newspaper, spokesperson on oil and gas and Economic Advisor to the Leader of the Opposition, Elson Low said that government now has another opportunity to improve the lives of Guyanese. He argued that the administration has so far demonstrated that it is more interested in approving more projects than ensuring the sector is well-managed and serves the interests of Guyanese. The Opposition however said that there must be a focus on building capacity to monitor, evaluate and audit as the country continues to expand the industry.

When it comes to the approval of the sixth project, Low told this publication that the administration should pursue higher royalty and ring-fencing to begin with. He explained that the 10 percent royalty other oil companies will be subjected to, in the new Production Sharing Agreements (PSAs), should also be applied to Exxon for the new development. In addition, the Opposition has pointed to the need for government to introduce a ring-fencing provision to safeguard the revenue generated in that field.

The sixth project, Whiptail is the largest oil project yet. It is pegged at a whopping US$12.9 billion and seeks to develop the resources discovered in the Whiptail, Pinktail, and Tilapia fields of the Stabroek Block. These fields are approximately 1,500 to 2,200 meters deep.

The project will see the development of multi-million barrels of oil resources by drilling approximately 33 to 72 development wells (including production and water/gas injection wells). It will also see the installation of a Floating Production, Storage, and Offloading (FPSO) vessel to process, store, and offload the recovered oil. Currently, the FPSO’s basic design has an upper production limit of 263,000 barrels per day (bpd).

Given the vast resources to be extracted from the project, the Opposition is calling on the government to take a stand for the citizens of Guyana in approving Exxon’s new development. Low said, “The government continues to operate as if it doesn’t understand that Guyana is positioned to be a major oil producer. We should be hiring World-class experts to review each development and help us manage the overall industry.”

He added, “Further, as we have previously stated, within the first 50 days in office, we will sit down with the companies with an in interest in the Stabroek Block to discuss how Guyanese can benefit more. World class experts will of course be involved in that process. Nothing prevents the government from hiring experts and having that conversation now, especially as it prepares to approve this latest development.”

The party underscored that Guyanese must begin to question why the government is more inclined to approve new developments rather than engage the Stabroek Block companies to represent their interests. In fact, the party said the cavalier approach to approving more oil projects without further benefits to the people of Guyana would add to the long list of actions that demonstrate the PPP is unpatriotic.

The Opposition’s call for government to use the opportunity to bring more benefits to Guyanese from the sixth project comes on the heels of a dismissive response from Vice President Bharrat Jagdeo when asked about what additional fiscal benefits citizens can look forward to from the new development that is currently pending approval.

During his August 31, 2023 press conference hosted at Office of the President, Georgetown, the VP refused to provide a response to the specific query from Kaieteur News. He would only say, “Asked and answered a hundred times before, 100 times before. I am not gonna go through this again.”