ExxonMobil to build HQ, hotel, helipad, training centre, etc.

ExxonMobil to build HQ, hotel, helipad, training centre, etc.

– identifies 10 acres of land from Ogle Airport Inc.

ExxonMobil will soon begin developing 10 acres of land under the control of Ogle Airport Inc (OAI), the company that operates the Eugene F. Correia International Airport.

Reports are that the oil company is looking to erect its headquarters there. ExxonMobil also wants to build a training center and a helipad. One source said, “I am also being told that they will throw up a ‘living quarters’ which can be considered a hotel.”

Yesterday, OAI’s Public Relations Officer, Kit Nascimento confirmed that the oil giant is looking to get lands at Ogle. He did not specify amount.    

The veteran PR consultation told this newspaper, “The airport is in discussion with ExxonMobil with regard to the possibility of leasing some land to ExxonMobil.”
Kaieteur News enquired of Nascimento the purpose for which ExxonMobil proposes to use the land. However, Nascimento said that he was unable to answer such a question because discussions are still quite young.

He said, “I am not in a position where any further disclosure can be made because the discussion has not reached that point.”

Despite such claims by Nascimento, this newspaper has been able to source a copy of a “land use plan” prepared by Chairman of the OAI’s Land Committee, Marcel Gaskin. That document tells a completely different story. The plan has a clearly demarcated area for ExxonMobil and even specifies the proposed 10 acres.

Kit Nascimento

Kaieteur News has been made aware that the OAI is ready to sublease the land to ExxonMobil. The only stall is the approval that had to come from Lands and Surveys. It is apparent that officials at Lands and Surveys want to cover all grounds before approving lease of the land.

It would be illegal for OAI to sublease without the requisite approval from Lands and Surveys. A well informed source said, “Just now, pressure will be brought on Lands and Surveys to make the approval with haste.”

ALIEN AT HOME?
ExxonMobil has been given prompt and favorable response from OAI but there are local aircraft operators who are not even given respect by the OAI, more over lands. This newspaper learnt of one small operator who has two aircrafts. The young pilot and entrepreneur applied for a simple 100 square feet with the intended purpose of building a hanger. His application was not even acknowledged by OAI. “It is like we are aliens in our own country.”

The applicants request for 100 square feet is equivalent to 0.00229568 acre. ExxonMobil’s request for 10 acres is equal to 435,600 square feet.
Ogle International Airport, recently renamed Eugene F. Correia International Airport, is not owned by the Government of Guyana. Ogle International Airport is owned by the Private Sector Company OAI, by virtue of a lease issued by the Lands and Survey Department for 441 acres.

The land lease to OAI is bound by specific conditions agreed to between the government and OAI.

The lease secured by OAI International Airport company specifies that it must first cater to the needs of those in the aviation sector. Yet, locals in the aviation industry are being bypassed are “Our small applications have been ignored but the great ExxonMobil has been able to secure over 10 acres.”

OAI’s official land use plan

The Lease Agreement provides for the Airport to be “developed and operated as a public aviation facility in accordance with the Civil Aviation Laws of Guyana and compliant with all other applicable laws, statute, regulations and international agreements that pertain to the operations of an international airport, including those promulgated by the International Civil Aviation Organisation, the International Air Transport Association and other international bodies having jurisdiction.”

WHAT LOCAL CONTENT?
One businessman told this newspaper, “This situation has got us asking if there will be local content in the oil industry indeed. It seems like Guyanese will be left in the cold.”

An overhead view of the area allocated for ExxonMobil

He told Kaieteur News that the government cannot be serious about advocating for local businesses if it is allowing ExxonMobil to erect all its own facilities.

“When they put a living quarters you are taking revenue from the Marriott, Pegasus, Grand Coastal and all the other local hotels. Come on, Guyana has many buildings that can be used for a headquarters. None are up to scratch for the big ExxonMobil? Why they cannot rent a building from one of our businessmen? Why they cannot use the facilities of the many training centers?”

Reference was made to the Business Minister, Dominic Gaskin who said last week that the Government of Guyana does not intend to make the same mistakes of other countries in the building of the oil industry. “The minister does not have to go very far to see the mistakes that they are already making.”

Efforts to contact several top officials of OAI proved futile.
Efforts were also made to contact ExxonMobil’s Legal Officer and Media liaison, Kimberly Brassington.

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Comments

  • Veda Nath Mohabir  On January 22, 2018 at 12:23 pm

    Regarding the oil deal with Guyana, this guy thinks that since Guyana has “multiple handicaps” the oil deal between behemoth, Exxon, and Guyana (“given the country’s starting point with its back to the wall and from the disadvantage of being inside a hole) is “fair”. You be the judge.

    Dear Editor, (Stabroek News)

    Oil agreement is ‘fair’

    The man from Exxon has described the oil agreement with Guyana as “fair” since this country is a new kid in the sharp-elbowed petroleum world. Even though I have a more expansive definition of fair, I am compelled to agree with Mr Henson.

    Guyana arrived at the negotiating table with the weighted bags of multiple handicaps; all have costly premiums affixed. It is a poor country with limited infrastructure. That is a subtraction. It has very few pertinent skills or expertise in things related to oil, whether underwater, upstream, or downstream. This is the equivalent of starting from scratch, if not lower; there are no mitigating factors, given the country’s starting point with its back to the wall and from the disadvantage of being inside a hole. Some more percentage points are lost. The country currently has one viable gold sector, and that is public knowledge; other once major industries are either dead or dying on their knees. This is a serious disadvantage that leaves no fallback option; there are no counterpunching reserve chips. Deduct more points from projections and dreams; separate textbook fantasies from tough immovable reality. To proceed further, there is the debt load and the ugly sociology of domestic politics. All of these represent accounting, as well as actuarial liabilities.

    While all these mechanics are in play, there is that angry elephant in the conference room, which is visible and cannot be tiptoed around; at least not on the Guyanese side of the table. It is that thorny border matter. That is an expensive presence and proposition that cannot be denied, and which has to be regarded by any prudent investor as a contingent liability, a real enormous one. The operative words at the table are: recognize, deduct, reduce.

    It goes without saying that these economic and risk premiums are not beginning from a full hundred per cent pie. The calculations and subtractions start from what is left after Exxon has factored in its own cost bases and profit projections under a host of expense and pricing regimes. As an aside, the company should get significant benefits from the new Trump tax law. Regardless, Guyana sits across the table without qualifications, experience, and even a good story to tell. In a serious job interview, this is tantamount to appealing to potential and living on a promise, with the hope that listeners will risk taking a chance and plunge.

    I quickly acknowledge that this illustration is incomplete, as there is all that liquid bubbling below the seabed. That is more than a promise; it is real. Except that it has to make the sophisticated expensive journey from under the mud to inside the bank. Exxon knows all of this. It also knows that the Chinese and Elf Aquitaine and Shell might all be interested. Guyana knows, though, none of the others bring either the clout of Uncle Sam, or the comfort of proximity, or the memory of being stiffed. And, of course, there are those remnants of the now tattered Monroe Doctrine to brandish in muted 21st century fashion.

    When the above are added up, the result is what is now termed “fair.” As matters go, it is painfully thin, but is what the circumstances will allow and bear. Like other citizens, I wish there is more on the numbers side for this country. Then I remember the many minuses that are in the mix, and which have been conveniently ignored, or given short shrift in some corners. I remember, too, from a different personal context how microscopic such calculations and negotiations can be. Many times, they are not about big ticket percentages, but of dog-and-cat combat for basis points. To the unfamiliar, a basis point is one hundredth of one per cent. Those in the driver’s seat never give up a single one, if it can be helped.

    In this instance, Guyana is in the passenger seat. It is not a first class one. To those who wish insight into Big Oil and its history and workings, I recommend Daniel Yergin’s monumental The Prize. The birth throes of the Middle East and elsewhere from over a hundred years ago are now Guyana’s to be lived.

    Yours faithfully, GHK Lall

    https://www.stabroeknews.com/2017/opinion/letters/12/31/oil-agreement-is-fair/

    VedaNM.

    • Mark  On January 25, 2018 at 9:11 pm

      African countries like Equatorial Guinea, Cameroon and Chad have over half of their population still living in deep poverty, less than 1 dollar a day, even though oil was flowing for over a decade and their populace is not large compared to countries like Nigeria.

      50% profit share means that if Exxon is able to earn 1 billion profit from their Guyanese operations, Guyana only gets US$500 Million dollars, which is only 49% of the Budget for 2017.
      Exxon Mobil posts Revenue from oil at $400Billion, and their profits Net are only $15-25 Billion, and that is their ENTIRE operations.

  • Mark  On January 25, 2018 at 9:16 pm

    Further noting, you cannot compare the Middle East because they have sold oil for over 50 years, and since 1971-1974, they sold their oil for US dollars.

    Their oil breakeven margin is very low because their oil comes as easy as water from the land, and they have pipelines ready to transport their crude to refineries, which then easily sell to European markets. Offshore oil drilling is costlier despite sweet crude being lower in cost to refine.

    Furthermore, I wouldn’t hold the Middle East in high regard especially when Human Rights are terrible, and a vast majority of the oil wealth ends up in the hands of a few wealthy Sheikhs.

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