Admitting that it blundered on critical aspects of the petroleum sector, the opposition yesterday offered support to the government for a united stand in dealing with ExxonMobil to correct deficiencies and it also launched a scorching attack on plans for a gas to shore project at Wales.
“While we in the opposition maintain our claim, that the 2016 (production sharing) agreement was a vastly improved contract on the 1999 agreement signed by the PPP/C, we are willing to offer the government the opportunity never afforded to the APNU+AFC. We are willing to offer our support on presenting a united position so that jointly we can address the alleged inadequacies in the contract and any other documents including the Environmental Permits,” Shadow Minister of Natural Resources David Patterson yesterday said.
“The lack of a unified front has allowed various parties to exploit the divisions which is not to the benefit of our country and its citizens. It is our position, that once we present a unified position to our international partners, the harder it will be for them to continue ignoring our concerns,” he added.
Patterson underscored that “moving forward, this issue is squarely in the hands of the government” as he emphasized that “the time for grandstanding and blame is over, and it’s time to act in the best interest of the citizens of our country.”
He went on to say that while in government, the then Minister of Natural Resources, Raphael Trotman, made it mandatory that Exxon fully brief the then opposition PPP on every new discovery and development, a move in their opinion that was necessary for all political parties to be aware of what was happening in the emerging industry
This current opposition, Patterson said is yet to enjoy any such briefing by any of the operators here. “The government has requested that no information be shared with us – this is in stark contrast to our handling of this sector and does not reflect the claims of inclusiveness that the government has been making speeches about,” he charged.
The third speaker in yesterday’s budget debate at the Arthur Chung Conference Centre, Patterson covered issues relating to energy and petroleum, the former of which fell under his portfolio when he was Minister of Public Infrastructure.
As he waded into government for its choice of Wales, West Bank Demerara as the site for the gas-to-shore project, Patterson asserted that Berbice would have been best suited for such infrastructure given that two other wells with vast gas reservoirs are located in close proximity to that county.
Patterson told the House that his government was able to make an informed decision on a location to land the pipes for the gas-to-shore project after embarking on fact-finding studies and consultation with experts in the field.
He said that between September, 2015 and November, 2019, they were able to engage in studies, consultations and discussions with key stakeholders in preparation to make the project reality.
“Mr. Speaker, contrast that with what the PPP are doing. No evidence of studies, reports, or analysis – absolutely nothing. Yet they have decided that they are going to locate the gas to shore project in Wales,” Patterson said, as he described the government’s action as “a classic case of putting the cart before the horse.”
Window dressing
He argued that the studies that are now being commissioned for the project will be seen as window dressing for a bad project.
According to Patterson, a September 2016 study `Screening Evaluation of sites for proposed onshore base to support fledgling offshore oil and gas industry’ by the then government recommended that Berbice was the most suitable location for future onshore bases.
Vice President Bharrat Jagdeo had told Stabroek News in January, “We have now settled on the location which is Wales Estate”. He stated that “the critical decisions regarding the geotechnical, geophysical and the environmental studies, that will advance the project, have been made.”
Landing the gas project at Wales is being seen as a path to rejuvenating the communities on the West Bank as they were hard-hit by the closure of the Wales sugar estate at the end of 2016 under the APNU+AFC administration.
Patterson, who is at the centre of a raging controversy over whether he should continue as Chairman of Parliament’s Public Accounts Committee, stressed that Wales was one of 10 sites examined by a multi stakeholder group and deemed not viable for several reasons.
Listing the reasons, he said that the supply of gas to shore will be interrupted for at least 2 – 3 days per year for routine maintenance of the equipment. To keep the plants working, he said there will be a need for a steady fuel supply and it is impractical to build storage tanks for natural gas.
“The location makes it very difficult to supply with Heavy Fuel Oil (HFO) – the recommended storage capacity is 7 days’ worth of HFO. Compare this to GPL’s 26MW at Vreed-en-Hoop which requires a tanker every 10 days, using the largest tanker which is 25,000 barrels – Wales at 250MW will need 10 times this amount,” Patterson cautioned.
He went on to state that while the Liza 1 and Liza 2 will produce 30 million cubic feet of gas per day, enough for power generation, additional money will be required to be spent on infrastructure to tap into the gas reservoirs of the Longtail and Turbot wells, since they are located closer to Berbice. These wells are expected to be commissioned by 2030.
According to the former minister, using the Demerara River for such a project is also unwise, as it is one of Guyana’s busiest rivers for commercial activities and fastest flowing.
Pipe dream
“A British expert indicated that it would be an act of lunacy to place a gas pipeline across the mouth of our busiest river. Like most South American rivers – the Demerara River is fast flowing, US Army don’t even allow their divers to do salvage work in rivers of this speed”.
Patterson questioned how the power produced will be fed into the national grid, while noting that the country has seen the challenges with submarine cables and marine traffic.
Patterson took a jab at the projected completion date for the project by 2023 and said “Hogwash, if it is done within acceptable standards – the FEED (Front End Engineering Design) which is done after the completion of the feasibility takes nine months, the fabrication of the pipeline alone takes two years, laying of the pipeline is another nine months – not to mention the civil works for the power plants as well as the sub-stations for GPL… another pipe dream.”
He labelled the gas-to-shore project as “a sequel to a B rated movie with the same leading actors,” Vice President Jagdeo, the Minister of Finance Dr Ashni Singh and the former head of NICIL Winston Brassington, all of whom he said have delivered failed projects to Guyana.
“These three gentlemen have saddled Guyana with almost US$.5B in worthless projects already and are starting again (Skeldon – US$200M, CJIA- US$150M, Amalia Falls – US$45M and Marriott – US$90M plus the money owed to NIS for the Berbice Bridge) – and now they are coming … for another US$800M project,” Patterson posited.
Disrespectful
Touching on flaring by ExxonMobil, Patterson said the response by the oil producer was “disrespectful and insulting to the Guyanese public.”
He said that the company continues to break laws with impunity and repeatedly makes empty promises on rectifying the issue.
“The company started out by saying that there will be no flaring from “day one”, then day one became a promise of day 60 which became a promise of day 90,” he said, as he emphasised that the company keeps regurgitating the same promise without any changes and continues to violate the Environmental Permit.
Patterson stressed that ExxonMobil has given a commitment to its shareholders to cut flaring by a whopping 35 to 45 percent across its global operations but at the same time continues to violate the laws of Guyana.
“Let us not be fooled, because in as much as the coalition welcomes Exxon to our shores with open arms, their only reason for being here is to make money for Exxon and not because they want to help a poor country,” he declared.
Further, the opposition member charged that instead of the oil giant living up to its promises and high expectations they are engaged “in what could only be described as a campaign of public misinformation and falsehoods, and what is even more distressing is that this administration is being so readily misled by accepting and repeating these falsehoods and misinformation, such as the deliberate untruth that Exxon is in compliance with all environmental laws and regulations.”
The former minister stated that while ExxonMobil will only be here for a few decades, the environment remains and will be inhabited by generations to come. It is on this note, Patterson called on the National Assembly, to ensure that they protect with all their might, the health and wellbeing of future generations.
“The opposition is ready, willing and able to join forces with the PPP/C to fend off the health, safety and environmental threats to our people, just like we do for national security of our country,” he declared.
