Dear Editor,
In a May 13 letter which appeared in the news media, economics students of the University of Guyana requested clarification from the Ministry of Natural Resources (MNR) as to whether a feasibility study was done for the proposed onshore facility at Crab Island in the Berbice River to determine its viability to service offshore oil fields now being developed off Guyana’s north coast. Additionally, they sought answers to several broader concerns such as to how the oil revenue will be determined and shared, the training and employment of Guyanese and the purchase of goods and services locally.
Answers to many if not all of the questions raised by the students should have been found in the Agreement made between the Government of Guyana/MNR and ExxonMobil. However, in a letter of May 14, MNR responded to the students’ queries with vague answers and stonewalled on the request which was made to make available the terms and conditions of the Agreement, with the dubious excuse that the contents could not be released publicly on advice it had received. MNR further stated that it would not make any fundamental changes to the Agreement which were made under the PPP/C government and it would respect the terms therein, whatever they are.
The Senior Director of Esso Exploration and Production Guyana Ltd (EEPGL) also responded to the students’ letter and cautiously stated that a critical component of the work of EssoMobil is to engage with the public to answer questions on local content, benefits, jobs and other topics. However, releasing confidential information in the Agreement made with the government was not one of them. Therefore, EEPGL was unable to release the terms and conditions under which it is exploring and developing the oilfields off Guyana’s north coast.
Hence, responses by MNR and ExxonMobil suggest that the students will not get answers to their questions any time soon, as critical contents in the ‘secret’ Agreement to exploit Guyana’s oilfields will remain sealed.
ExxonMobil stated that it expects to start pumping crude oil from Guyana’s oilfields by 2020. The crude will be stored temporarily in floating containers then loaded onto tankers for world markets. The natural petroleum gas produced will be flared and/or pumped back with other materials into the oil-bearing sandstone to force trapped oil to the surface. ExxonMobil has made no commitment to building onshore facilities to refine crude oil or to liquefy gas for domestic use and/or export. Nevertheless, MNR seemed to have jumped the gun and paid for a feasibility study to be carried out for onshore facilities, the objectives for which are yet to be disclosed.
Guyana does not have the finance nor a trained and skilled workforce to develop any facility to service the oil industry. The government efforts with respect to the sugar industry, construction of the Palmyra Monument and the Kato School clearly bears this out. The APNU+AFC government should concentrate its efforts preparing plans as to how it intends to spend its share of the oil revenue. Plans should be focused on creating jobs by developing the country’s infrastructure, improving education and training in needed skills at every level and providing good health care. MNR has no experience in developing any aspect of an oil industry. This should be left to investors who could be attracted with good incentives such as land, a trained workforce, excellent infrastructures and the opportunity to make shared profits. Any onshore facility to service the offshore rigs should, therefore, be provided by ExxonMobil as they have the finance and know-how to build such a facility to meet their needs.
It is doubtful that in its Agreement with the government, ExxonMobil would have made commitments on local content for their operations and secure jobs for Guyanese. The oil industry is renowned for its globe-trotting workers which no doubt will be recruited as quickly as needed since it would take years to train Guyanese for the skills required to develop the oilfields. Initially, there may be a handful of low-paying jobs available to Guyanese, but the high-paying ones will be difficult to fill because Guyanese do not presently have the relevant skills. It seems therefore that the UG students will have to be onlookers for a long time to come.
Yours faithfully,
Charles Sohan
