Govt. and oil companies using tactics to prevent independent analysis of our oil reserves
By Kemol King
When oil companies drill wells, they record the details of whatever they find. This practice is called well logging. If citizens had access to these logs, they would be able – with a little expertise – to independently analyse discoveries, and to determine just how much of the discovery is oil, and how much is natural gas.
With the knowledge of just how much oil and gas is out there within the boundaries of any particular project, like Liza-One or Payara, the people of Guyana would know just how much wealth they have. But they don’t.
Every time ExxonMobil makes a material discovery, its public disclosures report the estimated quantity of the discovery in barrels of oil equivalent (boe). While that report gives an idea of what is in the well, it doesn’t say how much of the discovery is actually oil, or how much is actually natural gas. ExxonMobil has refused to say. Kaieteur News has posed the question to the oil company’s local subsidiary, Esso Exploration and Production Guyana Limited (EEPGL), several times late last year, and it said it was still analyzing the contents of those discoveries.
This response would not add up, as the oil company was able to inform the Inter-American Development Bank (IDB) last year that between 30 and 50 million cubic feet per day of extra natural gas from the Liza-1 project can be made available for electricity generation in Guyana. Furthermore, the Liza-1 discovery was made almost five years ago.
In comparison, Suriname’s experience is vastly different, whereas Apache and Total were able to make a material discovery in the country’s Block 58, with Wood Mackenzie – a firm independent of both of them – reporting that it estimated 300 million barrels of oil, 150 million barrels of condensate and 1.4 trillion cubic feet of gas in that discovery. This did not take years. It took just a few days.
In trying to determine whether Guyana could have independent analyses done as well, Kaieteur News has hit a wall. ExxonMobil would not release its well logs, for fear that the publication of the content of those logs would hurt its competitive advantages in the Petroleum industry.
The Government would also not release the well logs, as it fears breaking its confidentiality agreements with the oil companies.
Asked whether well logs owned by Government could be accessed by private citizens, Commissioner at the Geology and Mines Commission (GGMC) Newell Dennison told Kaieteur News that they could, via a paid mechanism.
However, the Commissioner qualified his statement, noting that some logs are proprietary and shall not be released to anyone.
Asked which logs are proprietary, Dennison explained that they would include logs covered by agreements still in focus, due to confidentiality agreements.
What that means is that the only logs accessible to the public are those for concessions which were abandoned decades ago by companies like ExxonMobil’s predecessor, Mobil. What it also means is that ExxonMobil’s well logs for its 15 material discoveries on the Stabroek Block will remain secret, unless Government and all of the oil companies operating the Block consent to the release.
Furthermore, it means that private citizens will not be able to independently analyse logs of ExxonMobil’s 15 material discoveries. Whether Guyana is told the exact contents of the hydrocarbon reserves it owns remains at the mercy of ExxonMobil.