As it continues to weigh the pros and cons of having passive ownership in a National Oil Company (NOC), the Guyana Government has said any potential partner it chooses to manage the facility would need to have “deep pockets” as well as deep experience in exploring deepwater basins.
This was specifically noted by Vice President Dr. Bharrat Jagdeo during a recent engagement with the local media corps.
The State’s point-person on oil sector policy was asked to elucidate the reasoning behind the government leaning towards having a partner from the Middle East as opposed to closer to home, Trinidad and Tobago, which has over 100 years of experience in the sector.
He was quick to clarify that the government has not selected or opted for its partner to be from the Middle East should it go the route of a NOC. The Vice President said there were operators from that part of the world that had expressed interest early on. “We didn’t identify to work with any single group. Now clearly, there was an understanding that should they come to the table, they would need to have deep pockets because if you have an operator who comes to the table and takes losses and can’t raise money, then you will have a slowdown in activity. So, we have to choose a partner along those lines,” the Vice President said.
With that in mind, he said the government would not seek to have Trinidad and Tobago as a partner since the CARICOM State does not have a lot of money to put into any such company. “I don’t want to say much more, but they have a huge fiscal deficit, major revenue shortfalls and the State itself has fiscal issues… I don’t think you can find a partner there. We are going to need a partner with experience in working with deepwater, and there aren’t many around the world,” Dr. Jagdeo stated.
As regards the auction which is set to take place in the third quarter, the Vice President said a decision had not yet been made on whether to exclude ExxonMobil which holds the three largest blocks offshore: Stabroek, Kaieteur and Canje. He warned that doing so runs the risk of making the process uncompetitive.
He concluded that work is still being done on the format the bid round will take and the biddable items that would be included. The Vice President assured that the country would be informed when the administration makes progress on this front.