– calls on Opposition Leader to adjust his thinking

THE Ministry of Natural Resources on Friday chided statements made by Opposition Leader Bharrat Jagdeo, which suggested that the establishment of an on-shore supply base would be a “pie in the sky” concept because ExxonMobil would not be investing in it.

In a strongly worded statement to the media, the Ministry of Natural Resources said Jagdeo, a former president, is “obviously ill-advised.”
“In all the models examined around the world it is very rare, if at all, for the international operating companies to invest in a supply base, and rather more frequently the case to have public/private partnerships, or the private sector only, do so. A supply base must be established to support the burgeoning oil and gas industry,” the statement from the ministry said.
Accordingly, the ministry noted that ExxonMobil uses bases in neighbouring Trinidad and Tobago and in Georgetown; neither of which it “invested” in.
“Already, officials in Trinidad are quoted as saying they are preparing to offer on-shore supply services to ExxonMobil when production starts. Therefore, it is of vital importance for the Guyana economy that such a base be established formally, so as to ensure local involvement by local entrepreneurs as a means of better regulating the supply chain of the exploration and production business.”
The ministry said too that companies other than ExxonMobil will conduct exploration and production activities and the facilities along the Demerara River will be insufficient, as the industry develops rapidly.
“The entire country will benefit from a localised facility at Crab Island, Berbice, that provides an array of goods and services to the oil companies, and particularly, the people of Regions Five and Six,” the statement said.
The ministry has urged the Opposition Leader to “adjust his thinking and stop opposing for opposing sake, and embrace the government’s plans to deliver a modern, good and better life for all Guyanese” and gave the assurance that the on-shore base will also support the growth of other sectors.
The statement noted that an on-shore base forms part of a “deliberate strategy” to counter ‘Dutch Disease’ and promote the government’s goal of sustainable and holistic economic growth. On Thursday, the Opposition Leader said the estimated US$500M investment for the facility in the Crab Island, Berbice area seems a fiction. He questioned, “Where is this five hundred million dollars coming from?” while stating that the government has not budgeted for the facility.
“If foreign investors come to this country and they invest in this facility…and ExxonMobil is directed to procure the services from this facility based on local content legislation [and] even if the cost for these services are not competitive, then what happens?” he asked.
Last year, Minister of Natural Resources, Raphael Trotman, announced plans to have the facility and noted that some 600 jobs would be created and noted Cabinet’s no-objection to the establishment of the on-shore facility.
Asked whether the on-shore facility was discussed with executives of ExxonMobil who met with government, opposition and other stakeholders this week, Jagdeo said the matter was not discussed in detail.

“This [the facility] is not going to get built in 2017. Six hundred jobs he talks about so that sounds attractive, five hundred million US dollars…it is pie in the sky, pie in the sky by amateurs,” he said.