Georgetown, Guyana.
March 1, 2024
For immediate release to all media houses.
PRESS STATEMENTS FROM TODAY’S ALLIANCE FOR CHANGE PRESS CONFERENCE
Link to video of the press conference
https://drive.google.com/file/d/1hugIKzlllRJ8zmWna-qEiyKfRjVIYaUc/view?usp=sharing
STATUS OF THE POWER GENERATING SECTOR – David Patterson MP
With the recent announcement that the PPP’s pet project – the Wales Gas to Shore will be delayed until the end of 2025 – The Alliance for Change (AFC) would like to express our deep concern at the state of the Country’s Electricity sector for the near future.
To say that anyone was surprised by the PPP’s admission that the ill-conceived Wales Gas to Shore project has been delayed, would be an understatement.
From the inception, this project was doomed to fail, there were no studies, other than those undertaken by the coalition administration prior to 2019, the selection of the project site remains questionable, the economic viability of the project is untested, and in fact even the basis for the need for this project is flawed.
When this project was launched with much fanfare in 2021, the PPP projected that the country’s power demand would be in excess of 405 MW by 2025, an increase of 145% above the country’s existing generating capacity, this increase they claimed, was due to Guyana’s positive investment outlook.
At the recently concluded Oil and Gas Conference, the government has revised the country’s energy demand projection to 280 MW by 2025 a reduction of 124 MW or 30% without any explanation. This clearly demonstrates that basis for the Gas to Shore project was pure guesswork.
Here are the facts, in July 2020 the country’s available power generation was 165 MW with peak demand of 125 MW, at the end of 2023, GPL power generation was 180 MW with a peak demand of 165 MW (a mere 15 MW in 3 years), the increase in generating capacity was entirely due to the commission of new generation sets procured under the coalition administration.
If the PPP energy forecasts are to be believed, the country will require an additional 101 MW of new generating power (to meet the 280 MW demand) before the Wales Gas to Shore project ever comes online.
The nation should be concerned based on this projection, where and how these additional power generating sets will be acquired, we have already seen that at the end of 2023, GPL procured 17 second hand container sets for US$27M, to date only 5 of the 17 are operational, interestingly of the 5 operational sets – the sets have been tripping, whenever any load are applied, thus making them useless for the intended purpose.
The AFC is concerned that due to lack of planning and mismanagement, several similar ill-advised, back room procurement deals will be undertaken, in an effort to maintain some level of functionality on the DBIS.
Citizens should also be aware, that if ever the Gas to Shore project becomes operational, ALL other generating sets on the DBIS will be “moth balled”, which means that all the investments for additional power will be considered “sunk costs”.
Finally, the AFC notes that no progress has been made on the country’s application to the US Exim bank for the loan to fund the Gas to Shore project, it is suspected, when the US Exim bank examined the project details, that their technical experts have deem the project financially unsustainable.
This was similar to the position that the IDB took towards the equally ill-fated Amelia Falls Hydro project – the facts are, that the PPP has never been able to execute any major project, which has proven to be financially viable – projects such as the Skeldon Sugar factory, the Berbice Bridge, Marriot Hotel, CJIA expansion and the fiber optic cable – are prime examples.
2nd VP Jagdeo is confused, lacks understanding, or is simply dishonest, for there are no $20B assets to cover an oil spill or 52% profit for Guyana – Dr. Vince Adams
We watched and listened with dismay, the 2nd VP’s press conference of February 22, 2024, and thought our ears must be failing us with the disbelief of what was being spouted by this self-anointed oil guru from whom the people are expecting truthful information about our god given patrimony.
The VP must be either a very slow learner, confused, or just can’t help himself with his propagandistic ritual, as we know for sure that he has been reading the many letters by learned professionals explaining in the most simplistic manner, the critically consequential matters pertaining to Exxon’s billboard hoax about Guyana receiving 52% of oil revenues; and about his rabid opposition to a parent company guarantee in case of an oil spill.
The little oil spill in Tobago has again awakened the attention of not only all of Guyana and T&T, but also, all of the Caribbean which could be in serious danger of not only an environmental catastrophe, but also financial bankruptcy. A little spill it is, compared to the existing real scenarios of having a spill of similar circumstance from one of the vessels that traverse through the Caribbean from Guyana with a load of 1 million barrels of oil every one and one-half days and soon to increase to at least 1 million barrels every day – 35 times the Tobago spill.
While Prime Minister Rowley shows leadership and his understanding of the gravity of the situation by declaring and treating the incident a national disaster, our VP childishly mocks that he doesn’t hear anything coming from the environmentalists and media about a parent company guarantee, instead of him seeing this as a lessons-learned to improve our grossly inadequate preparation for any spills. If this 30,000-barrel spill is a national disaster, imagine what it will be with a 1-million-barrel spill, or 35 times Tobago’s, from a ship carrying oil from Guyana; or from a well blow-out spilling millions of barrels.
Of course, the VP couldn’t help veering off into his fantasy land, talking about a capping stack which he knows nothing about, but always attempts to mislead that he somehow initiated it, when in fact, it was procured by the coalition. Nevertheless, he knows just enough to hide that he has secretly tripled its deployment time from the 3 days imposed by the coalition to 9 days; thus, recklessly allowing for the gushing at least an extra 6 days of potentially millions of barrels into the ocean from a well blow-out.
The VP must explain to the people of Guyana and the Caribbean why he has taken such irresponsible and reckless actions with grave potential consequences to the region’s environment, and the fishing and tourism economy, when he clandestinely (1) tripled the delivery time of the capping stack; (2) reversed the direction given to Exxon by the team of experts from the GGMC, DOE, EPA and his own Consultant Allison Redford, to re-inject the hot, toxic, radioactive and oily water, instead of dumping it in our pristine ocean; and (3) why he waves on production way above the safety limit to enhance the chance of a spill.
As expected, the VP had to swivel to his foolishness about some sort of concocted $2.6B, and phantom $20B in assets that he could seize from EMGL to pay for an oil spill. As if that wasn’t laughable enough, he went on incoherently, to confuse his own self with muddling up book and market values of parent companies Exxon, Chevron and Hess with that of EMGL, seemingly not realizing that the parent companies’ assets are irrelevant and insulated from the liabilities of an oil spill, unless there is the parent company guarantee which he frenetically opposes; or, seems to be unknowingly making the case for the guarantee.
Nonetheless, let’s try once again to educate the VP. First, EMGL is the subsidiary of Exxon set up as such, to insulate Exxon from liabilities, and is the only official contractor party to the contract, leaving Exxon scotch free of any liabilities. Second, all assets are being bought and paid for, by Guyana through cost oil, and per the PSA, will be turned over to Guyana free of charge upon termination; so, it is daftness to keep repeating that he will seize our own assets from EMGL. In any event, we challenge the VP for the nth time, to please publish these assets he claims to be owned by ‘child company’ EMGL that adds up to $20B. In other words, put up or shut up to stop fooling the people.
It was those reasons which triggered the wisdom behind the coalition’s putting into law, the requirement for a parent company guarantee simply stipulating that the parent companies must cover the cost of any and all spills, since EMGL does not have the assets to do so – a stipulation agreed upon in writing by Exxon, until the PPPC took over and overturned it, only to be slapped down by the courts, but we all know the rest of the story where the PPPC stood steadfastly as Exxon’s defenders in appealing the decision, betraying its own people. But most disturbingly, the VP justification for protecting Exxon is that they will go bankrupt with an oil spill. In other words, he impresses that he will fight with his last breath to avert bankruptcy of Exxon, but OK with bankruptcies of Guyana and our regional neighbours.
Sadly, in the same press conference, the VP embarrassingly went on to expose the toxic mixture of his dutifulness to Exxon and the limitations of his honorary degree, when he once again prattled on with his selling of Exxon’s farcical billboard touting that Guyana is getting 52% of the oil revenues. Let us read and spell for the VP that it is impossible for Guyana to ever get 52% of the revenues, without the impossibility of zero cost for production operations. Simply put, Guyana now gets 14.5% consisting of 2% royalty and 12.5% from splitting the 25% profit, after deducting the 75% total cost (cost oil) of capital amortization and operations. It was therefore shocking to hear the VP say that when the capital amortization is paid off, the profit will be 100%, so, we will get 50% plus the 2% royalty, to make it his imaginary 52% propagandized on Exxon’s billboards. According to the VP’s imagination, this means to him, that operations cost is, and will be zero – an impossibility! Since the VP hides all of the data, let’s assume that at best, the operations cost may be around 30% which will make profit oil 70% after capital cost is paid off and becomes $0. Guyana’s take will then be 37% – half of the 70% plus the 2% royalty.
The sad part of this all is that the VP bombastically insults and abuses the press in covering the bluffs and disinformation in his answers to their questions; but is also evidentiary that the man is so obstinate in his ways, that he even shuns his own learned Attorney Datadin’s counsel to speak not of what you know not. END.
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