Local earnings exceed $129B

Nov 02, 2022

The Local Content Secretariat revealed earnings for nationals and local companies in the oil sector exceeding $129B, in a preliminary assessment of data. Director, Martin Pertab said the figure represents 23% of Guyana’s GY$552.9 billion budget for 2022.

The Secretariat issued over 354 Local Content Certificates to suppliers of the national oil and gas sector. This document confirms that the regulator is satisfied that the holder of the certificate is a Guyanese national or company. In keeping with provisions of the legislation, all certified Guyanese companies are published via the Local Content Register, for public scrutiny. The unit continues to work alongside and engage contractors, sub-contractors, licensees and Guyanese suppliers, to ensure that the goals of the Act are met. Local content gives Guyanese businesses a fair opportunity to directly tap into and benefit from the multi-billion-dollar petroleum sector.

Internal assessments show that Guyanese companies supply goods and services across 37 of the 40 areas ringfenced for nationals in the Local Content Act, passed on December 31, 2021. The First Schedule ring-fences 40 categories of work for Guyanese participation, including: food supply, rental of office space, accommodation, insurance, accounting, legal services, engineering and machining, aviation support, public relations, manpower and crewing services, dredging services, ventilation, environmental services and studies and transportation. The foregoing categories carry varying percentages for participation that must be secured by companies in the oil sector by the end of 2022.

The law serves to provide for the implementation of local content obligations on persons engaged in petroleum operations or related activities in the petroleum sector; prioritises Guyanese nationals and companies in the procurement of goods and services for the enhancement of the value chain of the petroleum sector and enables local capacity development. It provides for the investigation, supervision, co-ordination, monitoring and evaluation of, and participation in, local content in Guyana; promotes competitiveness and encourages the creation of related industries that will sustain the social and economic development of Guyana.

Overseeing implementation of the legislation is the Local Content Secretariat alongside an Inter-Agency Advisory Committee. Functions include developing and maintaining measures for the effective implementation of local content by Contractors, Sub-Contractors and Licensees; developing and implementing strategies that will give preference to, or ensure equal treatment of, Guyanese nationals and companies; and conducting market analysis.

 

Mid-Year Report shows real GDP growth of 36.4%

November 8, 2022

IMF Reports favourably on policies in September Country Report

Senior Minister with Responsibility for Finance Dr. Ashni Singh presented the 2022 Mid-Year Report published by the Ministry of Finance as Guyana’s economy continues to show positive growth and lead as one of the fastest growing economies in the world,

Guyana recorded overall real Gross Domestic Product (GDP) growth of 36.4 percent in the first half of the year, while the non-oil economy grew by 8.3 percent, reflecting Government’s supportive policy stance. The outlook for the second half continues to be favourable and for the full year, real GDP growth in 2022 is projected at 56 percent overall, and non-oil GDP growth at 9.6 percent, maintaining Guyana’s position of global leader in economic growth.

Also on a positive note, the International Monetary Fund (IMF) in its Report in September indicated that overall real GDP growth rate is projected to be 57.8 percent in 2022.

Senior Finance Minister Dr. Ashni Singh had noted that upon the assumption to office by the President Irfaan Ali-led Government, the administration recognised the importance of a strong, diversified economic base. Even in the early days of oil production, it placed the highest level of importance on a resilient non-oil economy. The aim was to modernise the economy’s traditional pillars and catalyze a rapidly growing and highly competitive non-oil economy’. This is evident in the non-oil economic growth at the end of the first half. The continued growth projected for 2022 builds on the 4.6 percent growth recorded last year.

In its September 2022 Article IV Report, the IMF noted that following the pandemic-induced recession in 2020, and protracted political transition, non-oil economic growth recovered in 2021, despite the negativel impact of floods.

The IMF “welcomed the broad-based economic recovery in 2021, following a protracted political transition and the pandemic-induced recession in 2020, and the unprecedented high real GDP growth, supported by a steep rise in oil production and accommodative policies.”

The IMF Report noted significant decline in public debt and favorable debt dynamics. “Staff welcomed the recent amendments to the NRF Act. The recent Amendments to the NRF Act set clear ceilings on withdrawals from the Fund for Budgetary spending and promote transparency in the management and use of oil resources. Staff praised the Authorities’ thorough review of the NRF Act before making amendments and the restraint in using any oil revenues before the passage of the Amendments.”

The IMF encouraged Government to continue improving the targeting of social spending while it “commended the authorities efforts to ‘maintain financial stability and promote financial Inclusion as well as its ‘progress in strengthening Guyana’s anti-corruption framework and fiscal transparency’ and for its ‘efforts to build resilience to climate change” as put forward in its Low Carbon Development Strategy.

Managing Guyana’s Oil Wealth: Monetary and Exchange Rate Policy Considerations

Author/Editor: Rina Bhattacharya Publication Date:November 11, 2022

Electronic Access:      Free Download. 

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary:  International oil producers have discovered commercially recoverable petroleum reserves of around 11 billion barrels that promise to transform Guyana’s agricultural and mining economy into an oil powerhouse, while hopefully helping to diversify the non-oil economy.

Oil production presents a momentous opportunity to boost inclusive growth and diversify the economy providing resources to address human development needs and infrastructure gaps. At the same time, it presents important policy challenges relating to effective and prudent management of the nation’s oil wealth. This study focusses on one of these challenges: the appropriate monetary policy and exchange rate framework for Guyana as it transitions to a major oil exporter.Series:Working Paper No. 2022/224Frequency:regular

ENGLISH   Publication Date:November 11, 2022

ISBN/ISSN:9798400225994/1018-5941

 

Green investments amid oil boom

November 11, 2022

US Ambassador acknowledges RE

GUYANA has been making significant strides in sustaining a green economy by balancing development in its energy sector and non-oil resources, US Ambassador to Guyana, Sarah-Ann Lynch said in a podcast, highlighting the efforts that have been and are being made to achieve sustainable development and utilise renewable energy.

“Guyana is well aware that oil is a finite resource, and they know that they need to invest a good portion of their oil and gas resources into renewable energy, and they are doing so and planning to do more of that.”

The country has a sovereign wealth fund that replicates the Norway model, saving the oil profits to invest in key development initiatives and transition away from fossil fuels.

“[Given the heavy dependence on fossil fuels] these funds should give them [Guyana] the ability to prioritise green investments. And they are looking at hydropower, [a] 165-megawatt facility in the central part of the country. They’re just starting to explore wind. And then they do have their flagship 300-megawatt gas to energy project, whereby they are viewing gas as a transition to the greener energy models.”

She reiterated that the government’s top priority is to lower the cost of electricity, which is among the highest in the region.On the legislative side, she noted that Guyana has established a Low Carbon Development Strategy 2030, which addresses many issues.

“…It really lays out the Government of Guyana’s vision to balance energy security, food security and climate security. It’s more or less their economic development plan for the nation, and they had a good consultative process associated with it, which was very encouraging.”

FORESTRY AND CLIMATE CHANGE

Guyana’s rich forestry sector could become one of its greatest assets in achieving its renewable energy goals.

“86 per cent of the nation of Guyana is covered in forest and it stores 19.5 gigatonnes of carbon…so, if managed properly, the forest truly is their long-term asset, but they will need to continue to invest in forest and forest management. Guyana does have one of the richest rainforests in the world and serves as one of the few carbon negative economies and so they are well aware that their forest must be protected. So there are a lot of encouraging signs on the green side of the equation here.”

Ambassador Lynch hailed Guyana for being eager to sign on to many climate initiatives like “REnovables in Latin America and the Caribbean” (RELAC), Agriculture Innovation Mission (AIM) for Climate and the recent U.S.-Caribbean Partnership to Address the Climate Crisis 2030 (PACC 2030). These partnerships, address the climate crisis with new, fresh commitments to climate adaptation, resilience and clean energy across the Caribbean.

“So, they’re very eager to sign up for these things.     They well know the need to do so,.”

The country is faced with a challenge as it relates to capacity.

“What the issue is? The challenge is capacity. It’s a small country, small population of under a million people. They don’t currently have all the talent in all these areas to do everything that they want to do. So, they will need to import some talent to address these issues going forward. But the legislation is being put in place and the passion and commitment are there.”

There have been progressive steps locally to enhance the country’s human resource capacity, and those include the establishment of the Guyana Online Learning Academy (GOAL) scholarship initiative, plans for an oil and gas institute and other investments in areas of academia and Technical and Vocational Education and Training (TVET).

 

 

Third notification to Parliament of revenues to NRF

November 8, 2022

commitment to transparency and accountability in the management of Guyana’s oil resources

Senior Finance Minister Dr Ashni Singh presented Notification Receipts to the National Assembly of all petroleum revenues paid into the Natural Resource Fund (NRF) during the period 1st July 2022 to 30th September 2022, pursuant to Section 33 (2) of the NRF Act 2021. This notification was published in the Official Gazette on the 17th October, 2022 and continues to reinforce the Government’s commitment to transparency and accountability in the management of Guyana’s oil resources.

As at end of September 2022, the Natural Resource Fund balance amounted to US$1 billion.

One of the key amendments in the NRF Act 2021 was strengthening the governance architecture of the Fund through the establishment of a Board of Directors tasked with the overall management of the Fund, reviewing and approving the policies of the Fund and monitoring its performance; thereby separating the management of the Fund from the Minister responsible for Finance. A 9-member Public Accountability and Oversight Committee (PAOC), responsible for providing non-governmental oversight of the operations of the Fund, replaced the cumbersome 22-member committee previously proposed. The Board of Directors and PAOC members were appointed in August 2022.

The International Monetary Fund (IMF) recently released its 2022 Article IV mission to Guyana in May-June of this year, commending the Government on the amendments made to the NRF Act and highlighted:

“The NRF Act was strengthened recently. After a thorough review, and while restraining the spending of the oil receipts, the authorities amended the NRF Act in December 2021. The recent amendments set clear ceilings on withdrawals from the Fund for budgetary spending …“

Vice President Dr. Bharrat Jagdeo  announced new fiscal terms as part of an updated model Production Sharing Agreement (PSA) for all new contracts.

Fourteen (14) oil blocks have been identified and will be auctioned for the first-ever competitive offshore oil and gas licensing round. As part of this new model agreement:-

1. Royalty has been increased from the 2 percent granted to the Stabroek Block under the former regime to an impressive 10 percent.
2. The current 75 percent cost recovery ceiling has been lowered to 65 percent.
3. Profit sharing after cost recovery remains the currently applied 50/50 system between the contractor and the Government.

These new terms would double Guyana’s share from 14.5 percent to 27.5 percent, alongside the new 10 percent corporate tax. The Government will continue to manage Guyana’s oil resources in a clear and transparent manner, to the benefit of present and future generations.

 

EU signs $1B forest preservation pact

Nov 08, 2022

– funds aim to cut deforestation, expand protected areas, create forest jobs

On the sidelines of the COP 27 in Egypt, the European Union signed a Forest Partnership Memorandum of Understanding with Guyana which will receive a grant of Euro 5m ($1.045b).

The EU said the Government of Guyana and the European Union share a 50-year-long fruitful partnership, advancing work together on shared priorities in programmes on the environment, sustainability and forest governance. This collaboration is now culminated, by the signing of the agreement, between President of the European Commission, Ursula von der Leyen and Guyana Natural Resources Minister, Vickram Bharrat.

The MoU underlines the genuine partnership between Guyana and the European Union, focused on long-term sustainability. “It is a reflection of the unwavering commitment of Guyana to protect its unique rainforest.”

According to EU Ambassador to Guyana, Rene van Nes, Guyana is unique as one of the few countries in the world with a negative carbon footprint. Guyana is an example for the world and the forest partnership is a recognition of the sustained efforts by the country in preserving its forests and ensuring that timber harvesting is regulated.

President Irfaan Ali said Guyana remains committed to fighting climate change and developing sustainably. Guyana’s growth is structured in a Low Carbon Development Strategy, which will help to build a global model for forest climate services and other ecosystem services.

The MOU has four main objectives:

1. increasing the area of protected, restored or sustainably managed forests, including mangroves;
2. increasing the number of forest-related jobs;
3. maintaining the close-to-zero annual rate of deforestation of natural forests and
4. looking for ways to facilitate investment and trade in legal and sustainable wood products between Guyana and the EU.

Thee forest partnership is a win-win for Guyana and the EU.

“With an initial EURO 5 Million grant from the EU for activities, immediate results are expected in supporting Indigenous Peoples and local communities, supporting small-scale producers, promoting sustainable trade in forest and agriculture commodities and building capacity to drive behaviour change. Youth and women are expected to play an important role in the planning and implementation of activities related to the partnership.

Reflective of its continuing strong stewardship on forests, climate and the environment, Guyana launched its visionary Low Carbon Development Strategy 2030. The LCDS sets out how forests and biodiversity can be maintained, whilst the country expands green jobs, transitions the domestic energy supply to clean and renewable energy sources, and adapts to the impacts of climate change.”

In recent years, the EU and Guyana implemented several forest-related actions, recognizing the urgent need for strategic and focused cooperation. Building on the strong engagement in and motivation for forest conservation by the Guyana government, both sides are increasing their cooperation on forests to make an important contribution to the UN 2030 Sustainable Development Goals.

Climate change is one of the world’s main concerns and affects Guyana as it threatens the existence of this coastal low-lying rapidly developing state. Guyana and the European Union aim at supporting the role of Guyana’s forests in sustainable development, and addressing challenges related to deforestation, forest degradation, climate change and loss of biodiversity.

The Forest Partnership with the EU places Guyana at the top of the world in terms of its protection of the rainforest. It is timely, and underscores the strong commitment in continuing the bold ambition and innovative programme on climate, environment and forests.

President Dr. Irfaan Ali, addressed the signing event of the MOU, virtually at 4AM Guyana time on November 8. his virtual address at the signing, he said the MOU demonstrates Guyana and the EU’s shared values of sustainable forest management and the protection of the environment.

The partnership comes at a time when the world is concerned about the continuing adverse and devastating impacts of climate change and is underpinned by the recognition of the role of Guyana’s pristine forests to the health and wellbeing of the global environment. Guyana’s forests constitute a part of the country’s rich natural capital and its abundant invaluable timber, minerals and priceless biodiversity.

“It furthers the process of promoting the trade and legally produced timbers and timber products. The EU has been in the forefront of supporting our development efforts, including the areas of climate change, climate resilience, food security biodiversity protection, and forest management.

This collaboration is continuing through the launch today of this forest partnership. Our forests provide food and shelter and support the livelihoods of thousands of Guyanese families while being sustainably managed, as evident in Guyana having one of the world’s highest rates of forest cover.”

The event will be livestreamed and can be joined and followed at https://app.swapcard.com/event/eu-side-events-cop27/planning/UGxhbm5pbmdfMTA1MTg2MQ

 

Private sector seeks more local content targets

Nov 8, 2022

Dr. Martin Pertab, Director said the Local Content Secretariat, operational for less than one year, achieved some of its initial targets allowing more Guyanese to participate in the nascent, lucrative oil and gas sector. The historic Local Content law, enacted last December, sets aside 40 areas- from transportation to legal services- under which Guyanese companies should be used, detailing the percentage requirement by the end of 2022.

Locals are eagerly providing these services after over 350 local content certificates were issued. It is expected that over 500 will be issued before year-end.   A Guyanese national or Guyanese company issued a certificate by the Secretariat receives preferential treatment in the award of contracts by the oil companies and their subcontractors.

That certificate confirms that the Secretariat is satisfied that the holder of the certificate is a Guyanese national or Guyanese company. Those nationals and companies are included in a local content register.

Some 1,125 new jobs were created in the industry this year, with 858 filled by Guyanese. Local content earnings topped GY$129 billion for this year alone. With interest high and with these targets being achieved, the local private sector is eager for an expansion in the sectors restricted to Guyanese businesses.

Chairman of the Private Sector Commission, Paul Cheong, expressed the interest of the private sector in providing more goods and services in the industry.

“It is time that we expand those 40 categories… The skills of Guyanese are expanding.“

The Secretariat stated that internal assessments show that Guyanese companies supply goods and services across 37 of the 40 areas ringfenced for nationals. Cheong believes that if more Guyanese collaborate on business ventures, they will be able to capitalise on many more business opportunities in the sector, expected to multiply significantly in coming years.

Chief Executive Officer of ExxonMobil (Guyana), Alistair Routledge, explained that ongoing exploration and production offshore, coupled with the new gas-to-energy project, signal the forthcoming demand for more goods and services.

 

Active role in COP27 negotiations

By Staff Reporter  Cindy Parkinson
November 7, 2022

Minister of Natural Resources, Vickram Bharrat, will be actively involved in negotiations during the United Nations Framework Convention on Climate-Change Conference of the Parties (COP27), which began on Sunday in Egypt.

This was announced last week by Vice-President Dr. Bharrat Jagdeo, who said that solidary must be shown to African countries, who, despite being the smallest contributors to greenhouse gases, are facing the most “dire consequences” of climate change.

Speaking on the issue during a press conference, he said Guyana will play an active role in the negotiations in solidarity with the position of CARICOM. Guyana will also use the opportunity to advance its own national interests which are mainly centred around the forestry sector.

He said that discussions were held on the effectiveness of COP 27 since a lot of world leaders have decided not to attend.

Dr. Jagdeo related that a number of leaders made commitments that they did not follow through with.

Countries that led the fight to ban coal, for example, which is known as “the dirtiest fossil fuel,” have now restarted fire plants in their countries.

Additionally, there were countries that were against further investment in the oil and gas sector and were concerned that the assets would be stranded and be inconsistent with a net-zero scenario. Those countries are now urging the oil producers to produce more oil and have even been threatened by the United States of America so that they can have a production cut,  Dr. Jagdeo said.

According to him, much of the promises that were made to Africa and other developing countries never materialised, particularly in the Kyoto Protocol and all the other COPs that were supposed to assist in the transition to greener energy, support the adaptation and provide at least $1 billion a year to support efforts.

“We have to give solidarity to those countries that are suffering the most from climate change and we should have greater accountability on the part of the developed world,” he said.

Prior to COP 26, he spoke at Rice University. There, he recognised the “hype” that is gained through conferences, pledges and declarations. He said that although the energy and enthusiasm were high, he had been “worried” and “fearful” that it would dissipate after COP 26 and sure enough, it did.

He is hoping that COP 27 will hold the developed world accountable. He is asking that the $100 billion promised since 2009 be delivered along with the promise of double adaptation funding that was made during COP26.

Even though CARICOM has been championing climate change, Dr. Jagdeo mentioned that they have been very reluctant to deal with the issue as it relates to small island developing states.

“There isn’t simply enough money spent on renewable energy globally, although it has increased significantly. It’s not enough to displace the use of fossil fuels. The demand is growing for energy and if the renewable supply is not there, then that demand will be met by an increase in fossil fuel production and that’s the reality of the current world,” said Dr. Jagdeo.

He explained that it is estimated that Guyana’s forest extract about 154 million tons of carbon per year, which is more than the emissions of three to four major European countries combined.

That supply means that although Guyana has a production of oil, the country still remains at net zero and a carbon negative country.

He added that the PPP/C administration is working to get Guyana’s forest carbon certified and 15 per cent of all the proceeds from the sale of forest carbon, including forest carbon from 2016, will go to the indigenous communities.

He said that government is working aggressively towards that venture and is optimistic that major progress will be made by the end of 2022.

Dr. Jagdeo related that Guyana has earned in excess of $200 million from Norway, through the sale of forest carbon, and that the government plans to add about 35 megawatts of solar energy from the grids in Linden, Berbice and Essequibo.

The government is also taking its obligations on climate change seriously with respect to the gas energy project with Amelia and the solar project.

With the mix of energy, Guyana will triple its generating capacity and cut carbon emissions from the sector by 70 per cent, he added

 

US continues to back policies

November 10, 2022

The United States Ambassador, Sarah-Ann Lynch said her government will continue to encourage and support the PPP/C Administration’s efforts aimed at ensuring inclusionary and sustainable development throughout the country.

The US ambassador, who was on Tuesday speaking on the podcast, Plaza Central with host Benjamin Gedan, believes Guyana, one of the fastest growing economies in Latin America and the Caribbean, is already on an impressive path of sustainable economic development.

United States Ambassador to Guyana, Sarah-Ann Lynch, while pointing to two major challenges Guyana is likely to encounter in the areas of inclusion and corruption, in light of the massive wealth being accrued owing to the oil and gas sector, the US ambassador said the country has several models that can direct its path.

“They [Government] really are going to have to keep their eye on the ball. But there are many models for them to follow of what not to do, and they are truly educating themselves in those areas and addressing those issues. It is an ethnically divided society and so they will need to focus on inclusion and there have been many efforts to do so far,” the US Ambassador stated.

She also spoke of the PPP/C Administration’s measures to support vulnerable groups in the midst of the COVID-19 pandemic, massive flooding and other external economic factors.

The United States, Ambassador Lynch said is encouraging and supporting the government in its efforts aimed at sustainable economic growth in all communities.

“So, we’re encouraging them to focus on efforts that will create a sustainable growth for the entire country, no matter ethnicity, no matter race, no matter gender, and no matter geography. Because there’s a bit of a rural-urban divide here, too. We are encouraging them to make sure that the Indigenous communities, for example, in the hinterland areas in rural Guyana can also benefit,” she noted.

Since taking office in August 2020, the government has been meeting with residents in communities across the country, listening to their concerns and providing, in many instances, immediate support.

President, Dr Mohamed Irfaan Ali in a recent live broadcast reassured of his administration’s commitment to development in every community.

The government has also been making strides in reducing the gap between the coast and hinterland by making services and other opportunities available in remote areas.

The president’s ‘One Guyana’ initiative is also indicative of the administration’s commitment to bridging the ethnic divide. President Ali and his Cabinet members have also called out the opposition for its ongoing race baiting politics, given its damaging effects to society.

As it relates to the ambassador’s call for caution to avoid corruption, the administration has been working to ensure transparency and accountability at all levels of the governance structure, with the passage of key legislation.

The International Monetary Fund (IMF) recently applauded the PPP/C Government on its progress in strengthening Guyana’s anti-corruption framework and fiscal transparency. At the just concluded 2022 Article IV consultation with the Government of Guyana, the IMF highlighted several pillars that have been fortified by the government to ensure transparency and a stand against corruption.

These pillars include

1. the Integrity Commission,
2. the Public Procurement Commission (PPC),
3. the National Procurement and Tender Administration Board (NPTAB),
4. the Auditor General Reports, and
5. the implementation of the Extractive Industries Transparency Initiatives (EITI).

Each pillar plays an important role in government’s transformative agenda, which makes provision for increased government expenditure in areas such as housing, healthcare, education, agriculture, and other critical sectors.

This promotes good governance, openness, transparency and improved public accountability.

 

Report on ExxonMobil US$9B audit for December

Nov 12, 2022

Kaieteur News – The US$9 billion audit of oil giant ExxonMobil’s expenses, between 2018 and 2020 will now be ready by next month, according to President Irfaan Ali.

The Head of State, at the sidelines of an event on Friday, was asked to give an update on the audit since the process should have concluded since September.

Notably, the Government did not issue a statement to update the public on this new position. Ali told this newspaper that the review is still ongoing and was delayed due to the “coordination issues” among the auditors.

The President explained, “I know the audit is ongoing. I know they had some delays but I’m sure the audit is ongoing. A week ago I found out about what is happening and the response was that it’s ongoing.”

He added, “They expect the first report before the end of December and the delay was because of coordination issues with the auditors themselves which is natural in these circumstances so before the end of the year we expect the first report.”

On May 24 last, Government inked an agreement for a four month review of the bills handed to it by the oil company.

The consultancy was awarded to VHE Consulting which is a registered partnership between Ramdihal & Haynes Inc, Eclisar Financial, and Vitality Accounting & Consultancy Inc. The Local Consortium is supported by International firms- SGS and Martindale Consultants for the ‘Cost Recovery Audit and Validation of the Government of Guyana’s Profit Oil Share’.

The audit will cost Guyanese some US$751,000. Minister of Natural Resources, Vickram Bharrat had assured that the findings of the audit would be made public.

This is particularly important as the public is unaware of the outcome of the audit of the US$460 million pre-contract costs, which was done by IHS Markit. The contract to the UK firm had cost US$300,000.

Nevertheless, Bharrat told media operatives that Government will rely on the findings and recommendations of the Report to take ‘appropriate steps’. While qualifying the Government’s decision to use foreign companies on the Review Committee, the Minister explained,

“The technical company is needed because our local auditors might be very familiar with the auditing (of) basic expenses (such as) fuel, meals, transportation, but when we are talking about jumpers and risers and Christmas trees, FPSO (Floating Production Storage and Offloading vessel) and these technical terms obviously, will need that kind of technical knowledge and expertise onboard to assist them to have a thorough exercise being done.”

He added that there will be new arrangements for future audits even as the Government seeks to conduct annual and even bi-annual cost reviews for ExxonMobil.

After the contract was signed, Opposition Economist, Elson Low noted that once completed, the Report on the US$9 billion audit of ExxonMobil’s expenses should be made available for parliamentary scrutiny. He said that this is particularly important as the four months time frame to complete the audit, remains questionable.

In fact, Low said that not only should the audit be made public but the Parliamentary Oversight Committee such as the Public Accounts Committee (PAC), should be privy to the details of the expenses so that the National Assembly can publicly debate its findings.

He said that this is the level of transparency and accountability that will leave no question about Exxon’s oil spending unanswered.

 

Guyana gold fever

Nov 06, 2022

By Shervin Belgrave, Kaieteur News

Guyanese still in the dark…

 As Guyanese remain in the dark about all mining contracts the government has signed with foreign companies, another Canadian corporation has entered Guyana, and is reportedly boasting to its shareholders that there is a “gold fever” in the country.

The company, Alerio Gold Corp, entered Guyana in June last year, and had announced its presence in the country via multiple press statements it had posted on its website.

Although the Guyanese government made no formal announcement to its citizens about the arrival of Alerio Gold, the company ensured that its shareholders were made aware that it had bought three large gold fields in Guyana. Those three large gold fields, according to the Canadian firm, were purchased from another company, ‘Goldeneye’, to which the Guyanese government had leased land.

Upon its arrival in June 2021, Alerio Gold entered into a deal with Goldeneye, to purchase two of the three gold fields first; the Tassawinni and the Harpy gold projects, located in Cuyuni Mazaruni, Region Seven.

In one of its 2021 press releases, Alerio Gold stated, “…The Company has entered into an asset purchase agreement with Goldeneye Capital Corp (Goldeneye), in respect of the acquisition of two gold mining properties located in Guyana, the Tassawinni Property and the Harpy Property”.

Alerio Gold then informed its shareholders that Tassawinni is a 3,413 acre property with proven gold resource, while Harpy sits next to the Aurora Gold Mines (AGM)-a gold field owned by Chinese company, ZiJin Mining Inc. – that has been producing over 120,000 ounces of gold per year.

Days later, the Canadian corporation closed off its purchase deal and began setting-up for exploration work on the properties.

Months after closing its first deal, the company issued another press statement in January, 2022, with the headline, “Gold fever Guyana”. In that statement, Alerio Gold announced to shareholders that it is going to buy a third mega gold field in the country called Puruni – located along the Puruni River in Region Seven.

The company stated, “Alerio Gold Corp is pleased to announce that it has entered into a property purchase agreement to acquire a 100% interest in five gold prospecting licenses in Guyana, known as the Puruni Gold Property”.

Alerio  finalized the deal in July last and described Puruni to its shareholders as a gold field that spans some 9000 acres of land, situated in an area that is rich in quartz vein-related gold mineralization.

As the new foreign company continues to explore Guyana’s gold fields, the government is yet to deliver on its promise to make all mining contracts public.

Kaieteur News (KN) Publisher Glenn Lall and his reporters have been repeatedly bombarding the Vice-President Bharrat Jagdeo at his press conferences to have all mining contracts released.

Jagdeo had promised that he will ensure that the contracts be released; since he had said it’s his personal view that such documents should be made public.

Months have passed, and during a recently aired programme on Kaieteur Radio, hosted by Lall, Jagdeo was once again reminded about the promise he had made. His response was:

“I am not your post boy” and told the KN Publisher that he must write the relevant authorities such as, the Guyana Geology and Mines Commission (GGMC) and the Ministry of Natural of Resources for the contracts.

Lall however, had expressed that he had asked the authorities, via messages and letters for the contracts on many occasions, but they have not been released publicly. The Vice President promised again that he would find out what is going on, because he believes the contracts should be made public and get back to Lall. A month has passed already and Kaieteur News and its Publisher are yet to receive a feedback from Jagdeo about the contracts.

While the nation continues to wait for a public disclosure of all mining contracts, large foreign corporations are making lucrative gold finds in the country.

Just two weeks ago, Kaieteur News reported that, “Omai’s new gold find is two times Guyana’s US$3.2B debt”. In that news article, it was reported that Omai, a Canadian company, disclosed in a statement to its shareholders that it is “extremely pleased”, because it has been able to double a previous gold find of 1.6 million ounces of gold to 3.69 million ounces of gold within nine months. At the current world market price for gold, the find by Omai is worth over US$6.2B dollars.

Notably, Guyanese learnt of this golden discovery through the mining company, while government remains silent on that deal and others.

It must be noted that while the discovery has the potential to rake in huge profits for the country, Guyanese are clueless about how much will be earned from the massive gold discovery, since the contract between Omai and Guyana remains secret.

In the meantime, Guyana’s Minister with responsibility for Finance, Dr. Ashni Singh announced in May last that three other foreign companies larger than Omai will be coming to Guyana. In making the disclosure, he skillfully glossed over how much the country would gain from these additional activities.

He would only say that jobs would be created.

 

British firm wins contract to market Liza oil

Nov 25, 2022 News

Kaieteur News –

– To help country expand trading capacity

BP International Limited, a subsidiary of British Petroleum, has won the contract to market Guyana’s share of profit oil from the Liza Destiny and Liza Unity Floating, Production, Storage and Offloading (FPSO) vessels. That contract will last for one year.

The firm beat 13 other firms to win the contract. Those firms and their respective bids are listed in the chart attached to this news item.

According to tender documents, BP International will be responsible for providing all functions of marketing, assessing regional and global demand centres, selecting customers and making appropriate transportation arrangements, providing support and guidance to the client in all operating and back-office responsibilities of managing these crude sales. It will also be expected to facilitate timely and cost efficient crude oil operations; and support the client in the continued introduction of the grade to multiple geographies and refinery systems.

In addition to the foregoing, the Ministry of Natural Resources said BP will also be required to provide benchmark performance comparisons of prices paid for the client’s crude while working closely with the client in understanding the behaviour and yields of the Liza blend and how these affect pricing differentials.

The successful bidder would also have to support the client with market information requests related to the demand, supply, pricing and trade in the oil market and crude oil trading capacity as well as buttressing the client in understanding and advocating for any operational considerations that may affect the pricing of crude.

Kaieteur News

Kaieteur News previously reported that Aramco Trading Limited (ATL), the London-based trading subsidiary for the State controlled Saudi Aramco, had inked a one year contract with the Ministry to market Guyana’s crude entitlement from the Liza Phase One Project. That contract came to an end last month.

ATL was among 15 bidders in the Brent-linked tender for Guyana’s light sweet Liza grade, and “was identified as the lowest compliant evaluated bidder at the price of $0.025/bl,” the Ministry had said.

The other bidders were, Bibi Energy Trading, Shell Western Supply and Trading, Chevron, Petraco Oil, China National Offshore Oil Corporation, Natural Gas Company of Trinidad and Tobago, and Heritage Petroleum, Hess, Vitol, Mercuria Trading, Total Energies, Litasco and Trafigura. Proposed commissions ranged from US$0.02/bl to US$0.26/bl.

As for the Liza Unity crude, Government has been doing its own marketing. At least two cargoes were already sold but little is known about the buyers and how they were selected.

Importantly, sales agreements for the country’s share of profit oil have not been made public. The International Secretariat for the Extractive Industries Transparency Initiative (EITI) has since called for Guyana to do better on this front.

It has also pointed out that the country is yet to declare consistently, information pertaining to the volumes of oil collected in accordance with the profit-sharing split in the Stabroek Block Production Sharing Agreement (PSA), alongside the identity of the buyer for each oil cargo.

Furthermore, the EITI had flagged Guyana for not publishing descriptions of the process for selecting the buying companies, the technical and financial criteria used to make the selection, and any material deviations from the applicable legal and regulatory framework governing the selection of buying companies.

The contract also comes weeks after Guyana signed a partnership pact with a UK Trade Mission as well as an announcement of visa free travel to the United Kingdom.

 

BP International wins crude oil marketing contract

Thursday, 24 November 2022,

The Ministry of Natural Resources announced that Guyana selected the United Kingdom-based BP International out of 14 companies to market its share of crude oil from the Liza 1 and Liza 11 offshore fields.

Under the Production Sharing Agreement, Guyana is entitled to 50 percent of the profit oil share- that is 12.5 percent each to the country and the ExxonMobil-led Esso Exploration and Production Guyana Limited (EEPGL)- and 75 percent goes to cost oil. Guyana also gets 2 percent royalty.

Guyana would be paying US$0.0025 per barrel of oil, in accordance with the company’s bid, for the next 12 months. BP International succeeds Aramco which had marketed Guyana’s share for the past year.

ExxonMobil extracts 360,000 barrels per day from from Liza1 and Liza II through the Floating Production, Storage and Offloading vessels – Liza Destiny and Liza Unity

BP International’s 12-month contract is expected to guide and support government “in all operating and back-office responsibilities” of managing the crude sales and each individual lift while facilitating timely and cost-effective crude operations

BP is also expected to find new markets and refinery systems around the world for Guyana’s grade of crude and provide benchmark and performance comparisons of prices paid for Guyana’s crude. The company, in its bid, said it would work closely with government to understand the behaviour of yields of the Liza blend and how they could affect prices