Dr Clive Thomas

Despite last week’s publication of the Guyana 2016 Production Sharing Agreement (PSA/PSC); today’s column wraps up my evaluation of model PSAs/PSCs.

  Introduction From their very inception, oil agreements/contracts have embodied dynamic processes between states, as sovereign owners or guarantors/regulators of rights to a country’s petroleum wealth, and individuals/oil-companies that contract to develop this wealth.

Introduction Production sharing agreements or contracts (PSAs), have been, from the time of their earliest introduction to the oil and gas sector, subjected to in-depth critical analyses and/or evaluations from economic, legal, and institutional perspectives.

Introduction At the time of writing this column media reports indicate that a signature bonus of US$18 million has been paid to the Government of Guyana (GoG) by Exxon and its partners.

Introduction Last week’s column welcomed the coming release of Guyana’s petroleum contracts.

Introduction Last week’s column argued that, the best use of Guyana’s oil wealth would be strategic spending on, and through, a dedicated Ministry of Renewable Energy.

Introduction Last week’s column had raised an outside-the-box consideration, which is that Guyana’s best use of its coming petroleum benefits/revenues might well lie in their utilization as strategic spending on renewable energy.

Introduction As indicated last week, today’s column is designed principally to pronounce on Decision Rule 4.

Decision Rule 3 Last week’s column continued the exploration of Guyana’s natural gas prospects, both “associated with/and not associated with” its recent substantial petroleum finds.

Introduction Last week’s column had raised the conundrum: What next? Given that, I am advising against state investment in oil refining therefore, what other major options I am recommending for realizing the substantial potential of Guyana’s recent petroleum finds.

Introduction As matters presently stand, and in order to be precise as well as taking into account the discussion concerning a Guyana state-owned oil refinery has lasted for several weeks (since August 20, 2017) it is perhaps prudent that today’s column starts by summarizing my two recommendations.

Today’s column concludes my discussion of Decision Rule 2, which posits: there is no overall economic justification for a Guyana state-owned oil refinery (of approximately 100,000 barrels/day).

Introduction Today’s column, and the next, continues to evaluate the feasibility of a Guyana state-owned oil refinery, promoted by many as the leading edge of a local content requirements (LCRs) regime aimed at maximizing downstream domestic value-added in the coming petroleum sector.

Introduction In last week’s column I sought to recall, for the benefit of readers, several key observations and conclusions that were drawn from my earlier review of refinery economics in order to support Decision Rule 2.

Introduction Last week’s column focused on reviewing the results of Pedro Haas’ feasibility study for a state-owned oil refinery, sponsored by the Ministry Natural Resources (MoNR).

Introduction Last week’s column was aimed at walking readers who are unfamiliar with economic feasibility studies, through the PowerPoint presentation by Pedro Haas of Hartree Partners, on the feasibility study for a state-owned Guyana refinery.

Introduction Today’s column aims at walking readers through the Guyana Refinery Study, presented in a talk by Pedro Haas of Hartree Partners, in May this year.

Introduction Last Sunday’s column (September 3) marked one year of uninterrupted weekly articles addressing the topic: ‘Guyana in the coming time of its oil and gas industry, circa 2020’.

Introduction: Proviso It is worth repeating: my two previous columns had sought to make it abundantly clear that if a local oil refinery is established, which is wholly owned, managed and operationalized, either separately, or through a partnership (or some other joint arrangement), involving only 1) foreign investors (whether private, state, or some combination thereof), or 2) domestic private investors, this would be acceptable in my judgement, subject to one important proviso or caveat.

Introduction – Re-cap As posited last week, it is my view that the true essence of an oil refinery that is deemed local, lies in its type (form) of ownership, management, and operationalized control.