Recent calls for the Government to shut down the operations of United States oil giant, ExxonMobil, over its latest flaring episode on the Liza Destiny vessel offshore, have been described by President of the Guyana Oil and Gas Energy Chamber (GOGEC) Manniram Prashad as “unnecessarily extreme”.
During a press conference on Wednesday hosted by the Alliance For Change (AFC), Executive Member and former Head of the Environmental Protection Agency (EPA) Dr Vincent Adams, said that the Liza permit explicitly states that the EPA has the authority to terminate operations at any time.
As such, Dr Adams, who was sent on leave in August 2020, posited that if he was still heading the EPA, “…that is what I would’ve done because we have been bending over for Exxon.”
However, in a statement on Thursday, Prashad expressed deep concern over the strong assertions by former EPA Executive Director to shut down operations until the issues with the flash gas compressor are solved.
“GOGEC wishes to point out that this call by the former EPA is an unwarranted and unnecessarily extreme in the circumstance. While any excessive flaring is unacceptable, GOGEC is cognizant that with regards to the specific matter, the Government of Guyana and ExxonMobil and its partners are currently addressing the matter,” the missive detailed.
Prashad posited in the missive that as a new oil producing country, it imperative that Guyana appreciates and understands that the global oil industry is one that is heavily capital intensive, and by its very nature an extremely risky business.
“Not only is the nature of the oil industry business one that is highly risky but this is compounded by high regulatory costs in other countries whose industry is heavily regulated and of course – risks of oil spill which is also very costly to oil companies. ExxonMobil, unfortunately, has not been spared of the manifestations of such risks over the years in other parts of the world and has borne the costs that comes with it,” he noted.
The GOGEC President also argued that these are factors that are beyond the control of ExxonMobil coupled with the demand and supply dynamics that impact oil price volatility as well.
Prashad went on to remind that the US oil major commenced oil exploration activities in Guyana since 1999 after securing a contract with the government of the day and it was not until more than a decade later, that Exxon struck oil in commercial quantities in 2015.
“…if it wasn’t for ExxonMobil’s persistence and its risk appetite, Guyana would not have been an oil producing country today,” Prashad contended.
Meanwhile, GOGEC further outlined in its missive that owing to the now burgeoning oil and gas sector, Guyana’s average Foreign Direct Investment (FDI) annually pre–oil was US$260 million.
However, post oil production which started in 2019, FDIs now amounted to US$1.7 billion – reflecting an increase of US$1.4 billion or 536 per cent from what Guyana’s normal average level of FDIs was before becoming an oil producing country.
In Thursday’s missive, Prashad reiterated the fact that ExxonMobil is an important partner in Guyana’s long-term development.
As such, he said “…it is unacceptable to allow any unnecessary calls for extreme consequences towards the company. GOGEC, therefore, wishes to urge all stakeholders to seek to obtain win-win situations in these matters rather than a strong-arm approach. This may not be healthy for the country’s and ExxonMobil’s mutual interest.”
Further, GOGEC cautioned that such calls for extreme actions can also stave off foreign investors and dampen investors’ confidence altogether – at a time when investors’ confidence in Guyana is at an all-time high.
“We, therefore, strongly reject such calls by the former EPA Head,” the Chamber stated.
Last month, ExxonMobil said it had to increased its flaring of gas due to more technical issues on the gas compressor of the Liza Destiny Floating, Production, Storage and Offloading (FPSO) vessel.
