Ministry of the Presidency distances govt from Petroleum Advisor's criticisms of ExxonMobil contract

10th February, 2018 0 comments

About five hours after Dr. Jan Mangal, Petroleum Advisor to President David Granger delivered a number of hard-hitting criticisms of the controversial ExxonMobil contract, government sought to dissociate itself from his positions.

“The Ministry of the Presidency puts on record that Dr. Jan Mangal, Presidential Advisor on Petroleum, is not authorised to speak on behalf of His Excellency, President David Granger or the Government of Guyana,” the Ministry of the Presidency said in a one-line statement issued at 9:50 PM.

Mangal delivered his presentation between 3 PM and shortly after 5 PM in his capacity as Presidential Advisor on Petroleum as was stated on the University of Guyana programme for its “Discussion on the Government of Guyana’s Vision for the Oil and Gas Sector”. He was introduced by that designation and at no time did he say whether or not he was speaking in his private or official capacity.

He stopped short of saying whether or not he would like to see the contract revised, opting only to remark that he would make known his views known in the coming weeks.

Mangal’s latest short-term contract expires in March.

At the forum, Mangal said the two percent royalty that Guyana secured from ExxonMobil in the 2017 Production Sharing Agreement was way below the globally accepted norms of between 10 and 20 percent. No tax on oil revenues did not find favour with Mangal who has worked in several oil producing nations.

He, however, welcomed the 50-50 percent split in profit oil.

Taking credit for pushing for the release of the ExxonMobil contract in December 2017, Mangal said that was needed to stimulate public debate so that civil society and the wider Guyanese community could determine whether it is a good or bad deal.

Mangal said he was also behind efforts to have the contract reviewed by experts from the International Monetary Fund (IMF) and the Inter-American Development Bank (IDB) to review contract.

At the same time, he cautioned against amending the contract because that could send a bad signal to investors.

Minister of Natural Resources, Raphael Trotman has repeatedly defended the contract, saying that previously there were no provisions for funding training and corporate social responsibility and there was no real royalty. He said the contract takes into consideration the political, financial and border-security related risks associated with the Guyana-Venezuela boundary controversy.

Guyana begins commercial oil production from the Liza well at a rate of 120,000 barrels per day. ExxonMobil is also eyeing the possibility of increasing its daily production soon after with the addition of another Floating, Production, Storage and Offloading (FPSO) vessel.

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Big oil can influence Govts, but not the people - Guyana's Petroleum advisor

10th February, 2018 0 comments

Advisor to President David Granger on Petroleum, Dr. Jan Mangal has outlined the power of the people to make their voices heard about what is taking place in the oil and gas sector, especially as it relates to the 2016 Production Sharing Agreement (PSA) signed between the Government and ExxonMobil. Dr. Mangal made the declaration in response to questions from students of the University of Guyana following an in-depth presentation on the Government of Guyana's Vision for the Oil and Gas Sector. 

“What you will find is that oil companies… and this is not looking at Guyana, are very powerful, and experts in everything they do. They know how to influence Governments to a T. However, they can't influence people. The only thing they are scared of are people. That's why it is important for Guyanese to have an intelligent debate,” Dr. Mangal stated. 

Responding to several questions which highlighted a number of shortcomings in the PSA, Mangal stated that a lot of people in Guyana are questioning who negotiated on Guyana's behalf. The PSA was released in December, and since then there have been daily debates about the provisions of the contract, with growing concern that Guyana did not get a fair deal. “What I would say is, let's see how the public debate goes on over the next couple of months,” Mangal noted.

The Presidential advisor is on record, pointing out that zero taxes on oil and the two percent royalties in the PSA is not the international norm for oil agreements. “We can all sit down and talk about it. The way I would be more happy and you would be more happy as well, is if a process was followed and we knew who was involved, and we knew their competencies and their expertise… and they were respected… and that they went out there to bat for Guyana and they did the best they could,” Mangal pointed out. 

ExxonMobil is a multinational corporation with powerful reach which was run for a number of years by Rex Tillerson, the current United States Secretary of State. Mangal has pointed out that regardless of how powerful the company is, the people's view will weigh on the decision makers of the country. Dr. Mangal is a Guyanese who has spent 18 years in the industry, 13 of them with Chevron working on major oil and gas projects in the United States, West Africa and Asia. Amid growing calls for the contract to be renegotiated, Dr. Mangal noted that contracts should always be reviewed as new information becomes available. 

“Contracts are always changed. A contract is an agreement between two people. Both parties need to be comfortable. If one party becomes really uncomfortable it will be changed,” Dr. Mangal pointed out.  He stated that the question of renegotiating the contract is one that the people of Guyana must answer. According to Dr. Mangal, the focus last year was to get the ExxonMobil contract released to the public. He expressed his happiness that the information is out there and people are doing the analysis for themselves.

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Petroleum Dept. & Food Institute for UG

10th February, 2018 0 comments

The University of Guyana (UG) is in the process of establishing a Petroleum Department as well as a Food and Nutrition Institute.

Vice Chancellor of the University, Professor Ivelaw Griffith said the new facilities are timely since Guyana is becoming an oil producing nation but at the same time, needs to improve its capacity in the traditional economic sector of agriculture. 

Professor Griffith announced on the final day of the GIPEX Summit that a study is underway to develop a Department of Petroleum Engineering.

“We have a working group helping to figure out the varying contributing elements to that. What kind of faculty do we need, what will be the curriculum, what are the lab equipment we might need, what are the linkages with industry, who might we have on the advisory board for that department,” he explained.

According to the University’s Vice-Chancellor, as Guyana becomes an oil-producing nation, its students need access to training in all aspects of the industry.

In this regard, Professor Griffith said the University is conducting a gap analysis to determine other areas that need improvement.

“The analysis we’re doing is with a view of the whole university enterprise. What is it we need to do better to prepare in law, what is it needs to be better prepared to do in the social sciences, what is under occupational health, in the medical field, what is it we need to do in nursing. We’re taking a comprehensive approach to the energy venture and adventure,” he stated.

The Vice-Chancellor cautioned that oil and gas should not consume all of the peoples’ energy since Guyana is and will remain an agriculture-based society.

As such, he said efforts are underway to launch a Food and Nutrition Institute on World Food Day on October 16, 2018.

The Food and Agriculture Organisation (FAO) had donated US$30,000 to the University of Guyana to conduct a feasibility study for the establishment of the institute.

Meanwhile, Professor Griffith reiterated that the University of Guyana stands ready to play a leading role in the country’s development.

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