There seems to be some confusion around what was actually approved with Payara in recent days, or what it means.
Simply, the approval of the Payara project (or development), which is the third project in the Stabroek Block, is not an oil agreement nor an improvement of an oil agreement, and does not improve the share of oil Guyana will receive from its own oil reservoirs.
We will still be losing about 55 billion US dollars, compared to what other countries typically get for this oil.
The widely criticized and unfair production sharing contract or agreement (PSC or PSA), which is between Guyana and ExxonMobil, is for the Stabroek Block. This is the oil agreement. This was signed by the PPP in 1999, and then renegotiated and signed again by the Coalition in 2016 (without any material improvements for Guyana).
The Stabroek Block covers a huge area of Guyana’s offshore territory which stretches from close to Venezuela to close to Suriname. You may recall the size of this oil block, or lease area, was criticized for being far too large (being comprised of 600 units instead of the legal requirement of 60 units).
The unfair oil contract covers all of the Stabroek Block, and Payara is a project within the Stabroek block. The Payara project covers a relatively small area within the block, as will all the other projects within the block (each covering an area not dissimilar to the footprint of Georgetown).
What the PPP government did recently was to “approve” the third project, Payara, in the Stabroek block. This approval allows ExxonMobil to start constructing the offshore facilities and start drilling the production wells for the Payara project. This approval comprised two main parts. The approval of the Field Development Plan (FDP) and the approval of the Environmental Impact Assessment (EIA) for the Payara project.
You may recall the Coalition approved two previous projects in the Stabroek block, the Liza-1 project in 2017 and the Liza-2 project in 2019. There will likely be more projects to develop other oil reservoirs in the Stabroek block.
Talk of oil contracts or agreements concerns the Stabroek Block. And the need for a fair deal for Guyana concerns the need for a renegotiation of the contract for the Stabroek Block.
The recent approval of the Payara project by the PPP, without even trying to renegotiate the contract for the Stabroek block, and thereby without even trying to claw-back some of the 55 billion US dollars Guyana is forfeiting to ExxonMobil, is a very sad event for the people of Guyana.
Any concessions the PPP claim they “negotiated” or fixed for Payara, such as regards some environmental requirements, are frankly mundane items which should have been imposed on ExxonMobil anyway. And these “concessions” are immaterial compared to the real prize for Guyana, which is a renegotiation of the contract for the Stabroek Block.
Guyana was and still is in a very strong position with respect to ExxonMobil, and the PPP had a golden opportunity to force ExxonMobil to renegotiate the contract for the Stabroek block by withholding approval of the Payara project. But instead the PPP political elites decided to continue forfeiting 55 billion US dollars which belong to Guyana, and which other countries usually keep for their own people.
The PPP and Coalition political elites do not care about national development nor about improving the lives of Guyanese. They never cared. Why else did we remain a failed nation for the last 50 years, when we could easily have been the equivalent of a Singapore, a very prosperous nation.
And why? Why this complete dereliction of duty by our politicians? Why are they happy to give away our oil wealth for a fraction of its worth, and happy to let the people remain poor? It is because all these political elites and their friends in the private sector will become filthy rich, even as the people remain poor. And it is because the people of Guyana do not hold their politicians to account, and keep voting for parasitic governments that exploit their own people?
Jan Mangal