ExxonMobil will not be investing in the onshore oil and gas facility announced by the government for Crab Island, Berbice, according to Opposition Leader Bharrat Jagdeo, who said this was disclosed at a meeting he had on Wednesday with company officials.
Labeling the facility a “pie in the sky,” Jagdeo yesterday told reporters at his Church Street office that he asked the officials directly whether ExxonMobil is part of funding the facility and they responded in the negative.
Asked if the company indicated that it would use the services, which Jagdeo said the government might want to direct it to do, he admitted that he did not ask that question.
In late December, 2016, Minister of Natural Resources Raphael Trotman announced that the facility will see the investment of US$500M and the creation of 600 jobs.
He had said that Cabinet has since given its ‘no objection’ to the establishment of the onshore industrial site in the area of Crab Island, Berbice and that it would be forged through the joint efforts of the ministries of Natural Resourc-es, Public Infrastructure and Business. Construction is expected to start early this year and the investments from the private sector, and government’s infrastructural work and support will be equivalent to US$500,000,000, which will lead to the creation of approximately 600 direct jobs, he reported.
“Where is this five hundred million dollars coming from?” Jagdeo questioned yesterday, while also asking where the government is getting the private sector support for the facility from.
He pointed out that there is no money in the budget for the facility nor has he heard of any loan that would be given nor is there a grant. “So where the money is coming from?” he asked.
According to Jagdeo, even if the facility is built, the government would still have to direct ExxonMobil to procure the services only from the facility.
“If foreign investors come to this country and they invest in this facility…and ExxonMobil is directed to procure the services from this facility based on local content legislation [and] even if the cost for these services are not competitive, then what happens?” he asked.
He answered that the oil company would be forced to use services of a foreign- owned or dominated company and if it does that its costs would go up and as a result Guyana’s revenue flow from the oil would be reduced. He also said that should the government go down that route, it would be interfering with procurement practices.
Jagdeo said he did not discuss the issue in great detail with the company but just wanted the officials to confirm whether it would be funding the facility. “This [the facility] is not going to get built in 2017. 600 hundred jobs he talks about so that sounds attractive, five hundred million US dollars…it is pie in the sky, pie in the sky by amateurs,” he said, before adding that he is very concerned that the government may be talking up expectations that have no basis “in the numbers [of jobs] and reality.”
The government has thus far not commented on the briefing of its ministers by ExxonMobil on the same say that Jagdeo met with representatives of the US oil company. It has said nothing so far about ExxonMobil’s position on the planned Crab Island facility.
Meanwhile, Jagdeo noted that at Wednesday’s meeting, which saw the officials meeting with members of the government as well, he discussed several other issues with the company officials. “There were several issues that I raised with them I am not going to disclose publicly at this press conference. There were a whole range of issues of a financial nature as well as technical nature and the future of the industry in Guyana,” he explained.
He said the company did not give any indication that there will be big creation of job opportunities or for services, while pointing out the officials would have outlined already the number of jobs and the services that they would procure over time. “They have done that, I think, to give people a realistic picture of what the industry will do, the timelines and how many jobs it would generate and what are the opportunities for local procurement,” he added.
