Minister Trotman not longer oversees Guyana's oil, President's office to watch oil portfolio – Six out of seven Exxon wells have now struck oil
Petroleumworld 02 28 2018
Government has announced another successful strike in the oil search by ExxonMobil and its partners.
It was also announced yesterday by Minister of Natural Resources, Raphael Trotman, that he will soon be relinquishing the portfolio of oil to the Ministry of the Presidency.
That decision was as a result of the administration reeling from severe criticisms of the current production agreement it has with ExxonMobil and partners.
Trotman, especially, has come for some scalding as he is a lawyer who should have known better, critics said.
Daily, the newspapers and its letter pages have been filled with misgivings over the deal.
The government is accused of penning an agreement that when compared to the rest of the world, is one of the weakest contracts with very little for Guyana despite the magnitude of the find.
On the other hand, Government officials have said that there was very little they could have done to the renewal which was inked by another government, in 2012.
With regards to the oil portfolio, the Minister, in a taped statement, following the weekly Cabinet meetings yesterday, disclosed that last year, he proposed to President Granger that Guyana begin considering the establishment of a Department of Energy.
This department will be focusing only on the development of the petroleum sector, Trotman stressed.
Yesterday, the matter came up in Cabinet again. There was a “lively discussion” on the proposal. According to the Minister, it was decided and determined that Government will have the Department of Energy established in the next few months.
That department, Trotman revealed, will be housed at the Ministry of the Presidency.
Trotman is the current leader of the Alliance For Change (AFC), the smaller of the two factions forming the Coalition Government.
The Minister said that Cabinet has mandated that he heads a Task Force comprising Finance Minister, Winston Jordan; State Minister, Joseph Harmon and Public Infrastructure Minister, David Patterson, that will oversee the establishment of the department. That task force could eventually.
The task force will decide on issues like staffing and structures.
According to Trotman, his Ministry will hand over the function of petroleum to this new department and Guyana will see a more direct and focused mandate from that department.
Trotman also reported that ExxonMobil has struck more oil in its Pacora-1 well.
This well is about four miles from the Payara well. All are in the Stabroek Block controlled by that US-owned oil company.
Trotman noted that more details of this latest discovery will be shared as soon as Guyana continues to have an aggressive programme of exploration and as it proceeds towards production in 2020.
He pointed out that Exxon has drilled seven wells so far in its offshore concessions. Six of them have borne fruit— an excellent record.
Trotman also congratulated the crew of the drillship, Stena Carron , which has made 90 percent of the discoveries without a day lost or injuries.
ExxonMobil announced in May 2015 that it had struck oil in the offshore concession. It was said to be high quality oil with over 3 billion barrels in that concession located about 100 miles from Guyana's shores.
The US company is now preparing for a 2020 start in commercial production but critics have insisted that despite the large find, the initial Liza 1 Well development will see Guyana getting just over US$50M in royalties with a 50/50 share in profit highly questionable as there are little systems or protections for Guyana to determine what constitutes legitimate expenses.
Already, without a drop of oil being pumped, ExxonMobil has submitted a bill of over US$400M to Guyana as its expenses that it will have to recover.
Story from Kaieter News
Kaieteurnewsonline.com 02 28 2018
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