Elson Low, an Economic Advisor in Guyana’s main Opposition Party, says access to more information relating to the wells at the prolific Stabroek Block would help to better solidify the APNU+AFC coalition’s position on the matter of ringfencing.
Low was at the time responding to questions from the media on Jan. 11 on whether the Opposition is in support of adding ringfencing provisions to prevent revenue losses.
He said the Opposition would need data on the complexity of the well, pointing out that this will impact the cost of the well. “The cost of the well will impact an investor’s decision regarding the well,” he said. “So, we need to get additional information so that we can have a sense of how investors will look at different well prospects and, therefore, whether ringfencing will impact their decisions negatively or [positively].”
To make an informed input, Low said the Opposition also needs expertise to guide its evaluations. Both he and Opposition Leader, Aubrey Norton, acknowledged too that consideration has to be given to the potential impact ringfencing could have on investment in the basin, before a definitive position is arrived at.
The topic of ringfencing, specifically of the Stabroek Block projects, has been raised in the context of Guyana garnering more revenues from its oil. The government does not intend to go this route and sees the absence of ringfencing as an incentive for exploration and appraisal drilling in the Stabroek Block.
President of ExxonMobil Guyana, Alistair Routledge, was asked last year whether the company would consider this. He said he is not sure that ringfencing would encourage the sort of development the country wants to see.
The government has encouraged Exxon to develop projects as quickly as possible so Guyana can get much-needed revenues to invest in infrastructure and social projects, while helping to mitigate the impacts of climate change.
Exxon has already received government approvals for five of the six developments it lined up for its 2027 goal of 1.2 million barrels per day, without ringfencing provisions.
