While acknowledging missteps by his government, former Public Infrastructure Minister David Patterson on Thursday urged the new administration to commit and act to ensure safe and environmentally-sound operations in the oil and gas sector.
During his contribution to the budget debate, APNU+AFC parliamentarian Patterson told the National Assembly that the ongoing controversy surrounding flaring by ExxonMobil and its partners in the Stabroek Block signaled that the company had no intention to live up to its promise of zero flaring from day one.
“The PPP must continue what coalition started in order to effect the cessation of flaring,” he stressed, while also citing his government’s erring by allowing contaminated water to be dumped into the ocean.
“It is now nine months and flaring has not ceased with over 11 billion cubic feet of gas emitted into the air with the detrimental effects to the people of Guyana,” he said while lamenting that Exxon seems to be resisting the closure of the loophole in the environmental permits which allows for too broad an interpretation of startup operations.
“To continue to claim that they are still in startup mode is ridiculous,” Patterson declared adding that through the Payara review, his government started to close that loophole.
Noting that the only thing international companies understand is fines and penalties, the former minister advised that such measures must be included in the approval of the Payara Field Development Plan (FDP) and any other authorisations and permits being finalised in the future.
Citing technical problems, Exxon has flared huge amounts of gas from its offshore operations, prompting closer scrutiny by the Environmental Protection Agency (EPA).
Payara will be Exxon’s third producing well after Liza-1 which is currently in production and Liza-2 which is in the works. While Exxon has been pressing for swift approval, the greenlight for the FDP is currently on hold as government is awaiting an expert review.
Patterson also called on the current administration not to discard works already completed during his tenure, including a series of preparatory works for the landing of a natural gas pipeline.
“I am pleased to inform this house that my government, along with several international partners, has done a lot of work in this regard,” he shared. He claimed to have completed a study on costs, economics, impacts and key considerations of transporting and utilising gas from offshore Guyana for the generation of electricity for local consumption as well as a study on system expansion of the generation system, on how best to transition Guyana to clean and renewable energy.
Also completed was a feasibility study of transporting and utilising natural gas from offshore Guyana, a gas to power feasibility analysis, an oil and gas master plan, and a site selection study where 10 possible locations were identified and ranked accordingly based on land size, site development costs, accessibility to utilities, infrastructure and port, distance and accessibility to floating production storage and offloading units, and socio-economic and environmental impact.
Further, a site analysis for a new deep-water port in Guyana and a financial proposal for the funding of the gas pipeline and generators at extremely competitive terms were also completed.
Patterson told the House that the only outstanding issue when this project was transferred from the then Ministry of Public Infrastructure to the newly established Department of Energy on August 1, 2018 – was a final approval of the recommended location.
He stressed that all these studies and reports still remain with the Department of Energy and claimed to have made them available to selected members of the media just before his presentation to the House.
Meanwhile, Patterson also sought to defend his work while in government against a series of attacks.
According to Patterson, while a lot has been and continues to be said about the Cheddi Jagan International Airport (CJIA) extension project, his government properly managed that project and all the risks involved.
He noted that the Junior Minister of Public Works Deodat Indar has claimed in the House that there are hundreds of items to be corrected while the Senior Minister Juan Edghill declared that project “troubled”.
Patterson stressed that even if all the claims were true the government, as of July 31st, holds two irrevocable bonds totaling US$6.206 million plus a performance bond of US$13.8 million and a retention of US$6.9 million which can be used to correct any issues.
“If the works completed are not acceptable the bonds can be cashed without question. That is how you manage projects against risk,” Patterson explained.
He reiterated that the EXIM Bank of China has advanced monies to the CJIA contractor and provided government with on-demand bonds which can be cashed and added that his government wrote to EXIM in November 2019 in an attempt to do just that.
“This was delayed by the Chinese New Year and COVID-19. I have not seen anything retracting this request,” he said emphasising that there is a total of US$27 million available in bonds and retention to the government – enough to buy 52 air bridges.
He further corrected claims made by Indar that moneys were paid for delays which were all the contractor’s fault and reminded that these delays were a result of the actions of the PPP/C government. According to Patterson one such action involved an Army Engineer Corps building and Police quarters in front of the airport which government was tasked with relocating so that the contractor could work. He lamented that this process took four years to relocate since the army refused to relocate to their new barracks. The current Prime Minister, he charged, refused to accept the buildings which were dubbed “dog houses”.
