Black Immigrant Daily News

By Arthur Deakin

News Americas, WASHINGTON, D.C., Fri. April 14, 2023: Within months, Guyana is expected to have auctioned 14 different oil blocks surrounding the biggest offshore oil discovery in the last decade. The government has announced that there could be 25 billion barrels of oil equivalent within those blocks, equivalent to nearly 60% of proven U.S. oil supplies. Big oil, such as Shell, Chevron, Petrobras, and ExxonMobil, have paid for seismic data in anticipation of a potential bid. 

Their participation will depend on the newly revised Production Sharing Agreement (PSA), which is stipulated to increase the government’s initial share of oil revenues from 14% to 27% (plus 10% income tax). Other decisive factors, including a potential 50% farmout of the awarded acreage after three years of seismic testing, are yet to be determined. 

Graph 1: How much will a U$100 million oil lift generate in revenues for Guyana?

Separate from this auction, Vice President Bharrat Jagdeo is also considering negotiating blocks directly with oil companies located in Qatar, Britain, the United Arab Emirates, and India. Having two different award mechanisms, one for private and one for public companies, can cause uncertainty and jealousy in the market as different terms are offered to different types of players. Government-to-government negotiations are often done behind closed doors, leaving little room for accountability.  Further clarity on what companies should expect, both from the PSA and the bilateral negotiations, will help assuage market concerns. 

It is no secret that ExxonMobil, Hess and CNOOC (Stabroek Consortium) have seen extraordinary commercial success in the Stabroek Block since 2015. Crafted in 2015, the government’s initial PSA allowed upstream players to recover up to 75% of their exploration cost if they struck “gold”, de-risking the Stabroek Block’s financial burden. This is exactly what happened. While the global average of successful offshore exploration wells stood at 25% in 2020, the Stabroek Consortium has seen an exploration success rate of 90%. Although the success has been constant, wells are increasingly being drilled in more complex, more costly, and less promising areas within the Stabroek Block. These success rates will almost certainly drop.

In fact, in neighboring Brazil´s pre-salt area, Petrobras’ nearly 100% exploration success rate in the early 2010s has fallen to the 25% levels seen across the industry. During the 2010s, Shell and ExxonMobil sank nearly US$4 billion dollars in Brazilian exploration and failed to come up with significant commercial discoveries. In April 2023, ExxonMobil announced it would quit drilling in Brazil. 

The surrounding blocks in Guyana have also seen very limited success, with commercial quantities discovered in only one well outside the Stabroek Block (Kawa-1 well in the Corentyne Block). This is despite significant exploration efforts and large investments being made by upstream players such as CGX and Repsol, who have failed to see a pay-out. The potential in Guyana is enormous, but it is likely that many oil companies will come out empty-handed. 

In addition to close analysis of the seismic data, companies seeking to position themselves favorably to win this tender need to establish good relationships with both the public and the private sector in Guyana. In a country with less than 800,000 people, where power is concentrated in the hands of a few, being well-connected is of paramount importance. 

Unlike auctions in Brazil, where the signing bonus and cost oil vary by block, Guyana has set a fixed US$10 million signing bonus for its shallow blocks and US$20 million for the more attractive deep-water fields. As such, companies won’t be able to offer the government a higher percentage of profit oil in their bids, but they can include certain incentives within their bids to increase their chances of being selected. One option is to provide guarantees of socially or environmentally impactful investments in local communities with a percentage of the profit oil. Another option is to form a bidding consortium that is extremely well capitalized, diverse, and experienced, creating leverage for the Guyanese government which seeks to reduce its dependence on the Stabroek consortium. A third idea would be to offer accelerated payment conditions to increase the governments´ access to liquidity.  

Another important factor to include in the bid is a work program that abides by local content rules. In this work program, bidders should have milestones that show their inclusion of local employees in relevant services. This is especially important within the 14 different local content categories that require between 90 to 100% local staff, ranging from catering to ground transportation. 

Halliburton, Schlumberger, and other multinationals that now have local offices in Guyana and are seeking to win contracts from the winners of the auction, must also ensure their local content requisites are covered. In fact, a local content certificate awards suppliers a 5% boost in their score when being evaluated by contractors, complemented by a strong financial standing, and proven technical expertise. The Ramps Logistics controversy shows that any discrepancies in paperwork can lead to legal challenges by the Local Content Secretariat, although the court denied any wrongdoing by Ramps and ultimately awarded their certificate. 

It is also important to reflect on previous tenders to forecast what to expect in Guyana. In Guyana, the two winners of the marketing contracts related to the government’s share of profit oil were awarded to the lowest compliant bids in 2021* and 2022. This reflects that bidders must position their bids as the most profitable option for Guyana vis-à-vis their peers, using investment guarantees and incorporating work programs that encourage local economic opportunities.

*For 2021, the lowest bidder was Chinese company Sinochem, at 0.02 cents/b, but the lowest compliant evaluated bidder was Saudi Aramco’s trading arm ATL.* 

EDITOR’S NOTE: Arthur Deakin is the Director of the Energy Practice at AMI (Americas Market Intelligence), where he helps companies expand into Guyana and the wider Latin American region through market research and strategic analysis. In the past 10 years, AMI has helped companies understand the Guyanese market, navigate Guyana’s local content legislation, and position themselves to win new contracts.

NewsAmericasNow.com

Black Immigrant Daily News

News Americas, GEORGETOWN, Guyana, Thurs. April 13, 2023: Guyana, a small country in South America, has recently extended the deadline for its oil block auction due to the high level of global interest. The auction has now been extended to July 15, 2023.

This extension is seen as a strategic move to attract more potential bidders to participate in the auction. Guyana has become a major player in the oil and gas industry since the discovery of large oil reserves off its coast in 2015. This has led to a surge in interest from international oil companies looking to tap into the country’s oil wealth.

Guyana’s Ministry of Natural Resources released a statement, saying, “Given the unprecedented level of interest shown by the international community, we have taken the decision to extend the period for the submission of bids to allow for additional time for interested parties to prepare their bids.”

The country has already awarded nine oil blocks to companies such as ExxonMobil, Hess, and CNOOC since 2015. The auction of 13 new blocks is expected to generate billions of dollars in revenue for the country and further strengthen its position as a significant player in the oil and gas industry.

With the global energy market transitioning to renewable energy sources, the country’s oil reserves have become a valuable asset for Guyana’s economic growth. The government is keen to ensure that the auction process is transparent and competitive to attract the best bids for the country’s benefit.

The extension of the oil block auction deadline is a positive move for Guyana, as it allows for more interested parties to participate in the auction. With the high level of global interest and the potential for billions of dollars in revenue, the auction is a significant opportunity for the country’s economic growth and development.

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Black Immigrant Daily News

The Association of Christian Communicators and Media (ACCM) has expressed concern about what it says is a renewed push by lesbian, gay, bisexual, transgender, queer, and intersex (LGBTQI) activists and others to force changes to the Jamaican Constitution as it relates to the buggery law and the prohibition of abortion.

The Christian advocacy group, which compromises media workers and owners from across the region, asserted that repeal of the buggery law and legalisation of abortion in Jamaica will undermine the family, endanger the nation’s children and attack “godliness”.

The ACCM will be hosting an information forum on Good Friday, April 7, under the theme: ‘Man + Woman = God’s Perfect Plan’.

The forum will be held at 4:00 pm at the Freedom Come Tent on the Spanish Town Bypass in St Catherine. The event will also be aired on MTM TV and streamed on online platforms.

According to ACCM First Vice-President Reverend Basil Hanson, it is now common for people who renounce or oppose the LGBTQI lifestyle to face backlash or be blacklisted.

He argued that the Christian community should remain resolute in its stance that homosexuality is an abnormal behaviour.

“God made man and woman, male and female, and that is what we are promoting and we stand by that,” said Hanson as he noted that there has been a growing acceptance of the homosexual lifestyle globally.

Jamaica is one of six countries in the Americas and the Caribbean which have not legitimised same-sex sexual activities and according to ACCM, the country has been coming under immense pressure from gay rights activists to repeal the buggery law, despite several polls indicating that Jamaicans are not in support of such a move.

The overwhelming majority of Jamaicans polled by Bill Johnson in the two latest polls commissioned by the Jamaica Observer said that the law making sex between two men punishable should not be changed.

Strong support for the buggery law emerged from the polls conducted March 12-15, 2020 and July 9-12, 2020 by the veteran pollster among 1,200 voting-age Jamaicans across the country.

The polls had a sampling error of plus or minus 2.5 per cent. The March poll was not published due to the outbreak of the novel coronavirus in the island.

Section 76 of Jamaica’s Offences Against the Person Act makes buggery punishable across the board, with a penalty of imprisonment for up to 10 years, with hard labour.

When the pollsters asked Jamaicans to state whether the law should be changed or not, 93 per cent of respondents in both polls said no.

Support for amendments to the law totalled a mere three per cent in the March poll and five per cent in the July survey.

Against that background, the ACCM said, “We will not relent from our principled position that our children will not be coerced into accepting these practices as normal. Our very vulnerable education system is a prime target for this anti-God lifestyle. We are firm in our resolve that this must be resisted by the Christian Church through the power of Jesus Christ of Nazareth.”

Hanson believes the church community should be more vocal in asserting its stance, which is based on the Word of God. He is also concerned that more people of affluence and influence are adopting the secular view that an individual’s gender can be neutral.

“We have to save our children, because if we allow this to begin to permeate in the schools, we are in big trouble. We would have failed the next generation,” he stated.

He called on religious leaders to make their voices heard outside of the four walls of the church halls as the family comes under attack.

“Most people will not say anything, even though they do not agree with it, but the truth is, if you do not say anything, you are quietly supporting it, even though you are not,” said Hanson.

According to the ACCM, the forum is intended to provide vital information about the advance of the LGBTQI agenda and the efforts of foreign governments and international organisations to influence the policies of the Government of Jamaica. The organisation will also celebrate the family as the divinely created order established by the Creator.

The forum will also address the issue of abortion, which remains illegal in Jamaica except in some cases of medical emergency.

According to Section 72 of the Offences Against the Person Act, anyone found guilty of having or facilitating an abortion could be arrested. However, there have been calls in recent times for the abortion laws to be relaxed.

The ACCM is calling on the Christian churches to be united and stand together for righteousness and the ultimate prosperity of the Jamaican people and the nation.

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Black Immigrant Daily News

The Central bank of Trinidad and Tobago (CBTT) on Friday said the outlook for 2023 looks favorable, barring major external shocks.

In its Monetary Police Announcement for the month of March, the CBTT said domestic inflation moderated in January and that figures released by the Central Statistical Office (CSO) showed that headline inflation decelerated to 8.3 per cent in January 2023 year-on-year compared with 8.7 per cent a month earlier.

It said food inflation remained unchanged at 17.3 per cent, with slower price increases for fish, bread and cereals. Core inflation, which excludes food items, slowed to 6.1 per cent from 6.7 per cent, as price increases eased for housing, communication and furnishings.

The CBTT said the rate of price increases for building materials also decelerated.

“In terms of economic activity in Trinidad and Tobago, latest estimates put growth in 2022 at around 2.5 per cent. This reflected a relatively favorable performance in the energy sector alongside a gradual revival in non-energy production,” the CBTT said, adding that “there is some early evidence of improving labor market conditions based on observed increases in labor force participation in the third quarter of 2022 and the decline in the number of persons retrenched during the second half of 2022.

“The outlook for 2023 looks favorable, barring major external shocks. With respect to financial indicators, liquidity remains ample and credit buoyant, while interest differentials widened,” the Central Bank said.

It said commercial banks’ excess reserves at the Central Bank fell by around TT$400 million (One TT dollar=US$0.16 cents), from TT$6.7 billion at the end of December 2022 to TT$6.2 billion at March 28, this year.

The CBTT said contributing to the decline were more extensive open market operations, including net treasury bill sales of around one billion dollars, and US$300 million in foreign exchange interventions by the Central Bank.

Financial system lending to businesses expanded by 9.8 per cent in December 2022. Credit growth to the construction and manufacturing sectors was recorded at 18 and 11 per cent respectively and “were particularly robust, while consumer credit gathered momentum”.

The CBTT said that the differential between interest rates on three-month treasures in Trinidad and Tobago and the United States moved to minus 429 basis points in February 2023.

“This compares to minus 392 basis points at the end of December 2022 in the context of US Fed tightening. There is evidence of a slight upward movement in domestic interest rates in recent months; the rise in average rates on loans exceeded those on deposits resulting in an expansion in the loan/deposit spread by five basis points to 6.36 per cent.”

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