Dear Editor,
On July 14th Mr. Rod Henson who heads up Esso Exploration and Production Guyana Ltd informed in an interview with Stabroek News that they were on target for first oil in the first quarter of next year from its Liza 1 project. He went on to say that it will actually take a few months to (get to) our rate of 120,000 barrels per day.
Now this is when it becomes complicated to the layman. Mr. Henson stated that cost recovery in the first year would be at the maximum 75 percent cap provided for in the contract. “Yes it will start at that (75 per cent). A good term was to cap that cost recovery number so that guarantees that Guyana starts making revenue right away. It will for the first couple of years”, Henson said.
A little further down in the article there is an entry which states that there won’t be change “overnight”.
I am a little concerned by the entry “Not Overnight”. I would kindly request from Mr Henson what is meant by this phrase.
What I feel would have been informative but not mentioned in the interview was the amount of revenue Guyana would earn when oil production begins in 2020.
For the sake of clarification I am suggesting to Mr. Henson that he use the below listed parameters to develop what Guyana would earn in 2020.
Royalty amount =2%
Average price of a barrel of oil in 2020 = US$60
Pumping rate 100,000 barrels/day
Number of days oil will be pumped in 2020 =250
If Mr. Henson feels these parameters are unrealistic, he is welcome to use parameters he considers more appropriate.
Thanking you for your cooperation.
Yours faithfully,
Edward Gonsalves
