Shell made mistake by pulling out of Guyana’s oil basin

Shell made mistake by pulling out of Guyana basin

By Bert Wilkinson – Caribbean Life News

Now that Guyana’s oil and gas basin has been deemed as one of the hottest and most exciting prospects in the world, Shell Oil has to be regretting its decision to withdraw as an investment partner with United States giant ExxonMobil, which has so far drilled six successful wells offshore Guyana worth about 3.2 billion barrels of oil, officials said Monday, Jan. 29. 

Minister of Natural Resources Raphael Trotman said Exxon’s mid 2015 “world class” oil and gas find has clearly taken away all the fears and apprehensions about wasting investor dollars exploring offshore Guyana and Shell is one company which has missed out on the chance to cash in on one of the world’s largest oil finds in more than a decade. Exxon plans to begin producing about 120,000 barrels of oil daily in early 2020. This will make Guyana the largest producer in the Caribbean Community. The others are Trinidad, Suriname and Barbados.

“Shell was with Exxon on the Stabroek block and pulled out. They now maybe rue the day that they ever did that. Now, Shell has signaled that it wants to come back to Guyana,” Trotman noted, saying that all the major oil and gas companies in the world are either vying for their own offshore blocs or buying into smaller companies which have deep water concessions near Exxon’s highly successful offshore fields.

Exxon spokeswoman Kimberly Brasington Monday confirmed that Shell was the original partner with Exxon in the six million acre-plus concession area after Exxon had signed its exploration agreement with Guyana back in 1999 “but chose to pull out. They made the decision not to take the risk. We therefore had to go out there and look for new partners in Hess Oil and Nexen (of China). Yes that was indeed the case,” she said.

Geology and Mines Commissioner Newell Dennison said Shell pulled out about a decade ago and has been sending signals about coming back into the basin but he has seen no paper work regarding this so far.

Exxon and its partners plan to drill 17 wells in the first phase of their offshore venture and up to 40 others ion phase two. The company has already filed paperwork for permission to begin preparations for phase two of its offshore operations and has begun public consultations about this phase.

Spain’s Repsol, Tullow Oil of the United Kingdom, Chevron, Brazil’s Petrobras, Eni of Italy, TOTAL of France and British Petroleum are among big oil players all vying for participation in the country’s fledgling oil and gas sector.

“These companies are only expressing interest because ExxonMobil has de-risked the basin. Zero from zero is nothing. If you have oil and no one is troubling it, then it is worth zero. The oil may be worth a lot, but only if it is produced. We are moving to production, but it took ExxonMobil to find what others have been looking for,” Trotman said.

Updated 1:18 pm, January 31, 2018

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Comments

  • Mark  On February 9, 2018 at 4:07 pm

    This buffoon Mr. Trotman sounds like one who makes empty promises and tries to covertly deceive us.

    He speaks of how Guyanese will “become very wealthy in US dollars in a few years”, but then recants in his speech at the Marriott Hotel that Guyana will not depend on oil, even before the oil is being exported and revenues are collected for the Guyanese.

    If oil is projected at US$70 per barrel and Exxon drills 120,000 barrels of oil a day for 365 days = US$3.1 Billion value for oil that Exxon collects by sending it to refiners in the USA.

    Once Exxon calculates their costs, it will likely be left with about $800 Million Gross Profit. Guyana gets 50% of it which leaves it with US$400 Million.

    However, Exxon already submitted their exploration costs which is almost US$500 Million, so by 2021, Guyana will have a NET INCOME of ZERO dollars for oil revenue, and this is IF OIL rises to US$70 barrel when every developed country is seeking alternative and renewable energy sources which reduces demand for oil.

  • BERNARD  On February 9, 2018 at 6:39 pm

    MARK, PLEASE, IT IS NOT NICE TO CALL PEOPLE NAMES.

    • Mark  On February 9, 2018 at 9:12 pm

      Where have I ever called names on anyone commenting on this website comments section?
      It’s also impolite to TYPE IN ALL CAPS because that implies shouting.

      If you’re offended that I’m questioning Trotman’s integrity as a Minister to rightfully give the oil income to Guyanese rather than use it for enriching corporations, private interests and corruption, then it is true that those rumours of the APNU alliance is like the Liberals of Canada, offended snowflakes who don’t like it when the average Joe criticizes them on their governance.

      Why shoudl I be concerned aboit the feelings of an incompetent Minister who has acted strangely when it comes to the oil contract?

      Why should it be important not to criticize a politician when this oil money is supposed to turn Guyana into a better country?

      I was uncomfortable how President Granger is towing the American LGBT agenda, and now the APNU is offended when I question the motives of Ministers who should offer transparency with oil contracts.

      I don’t give a penny’s copper what Trotman or anyone thinks of me because I’m certain that from 2020 to 2030, at the rate things are happening in Guyana with this lopsided oil contract, that Guyanese will continue to suffer and die for 18th century illnesses at Georgetown Public and thousands of poorer Guyanese will end up on the streets because Exxon will take over their lands to build an American empire on Guyanese soil.

    • Mark  On February 9, 2018 at 9:24 pm

      Did you even read the rest of the comment how Guyana will be in the Red in Year One of oil production?
      What’s so important about Trotman’s feelings when he is not acting in the interest of transparency?
      Even respected accountant Chris Ram, a supporter of the PNC, is highly critical of the oil contract.
      ALSO ALL CAPS IS CONSIDERED INTERNET SHOUTING. Please don’t use ALL CAPS because it doesn’t meet civility standards and proper comment usage.

  • Mark  On February 9, 2018 at 9:15 pm

    It looks like someone ‘flagged’ me so that I’m under moderation again. What does the APNU and Exxon Mobil have to fear from a legal representative from Canada also working in the state of New York as a Solicitor? Are they that scared that someone on a comments section is critical of their contract?!

    You can’t criticize gays and lesbians when they molest young children in North America, and now in Guyana you can’t criticize any party involved in the lopsided oil contract.

    • Linda  On February 10, 2018 at 7:14 am

      Mark it’s obvious that you have no tolerance for Gays and Lesbians and that’s your prerogative. However, before you criticize the LGBT movement, you need to get your facts….Gays and Lesbians do not molest young children. I’ve read many of your postings on this Blog and all you seem to do is criticize. Guyana’s oil has not even left the ocean bottom as yet and you’re off calculating its losses. You don’t even live there. You’re criticizing the government of Canada for not governing the way you see fit and that’s probably where you live. Being a lawyer does not make you an authority on anything, not even the law because there’s always someone who knows more. Instead of opposing every issue, try looking at the glass as being half full rather than half empty. Try relaxing and accepting that not all human beings are as all knowing as you.

  • Mark  On February 10, 2018 at 7:45 pm

    Respected, experienced and smart attorneys like Chris Ram, along with political commentator Ramon Gaskin resonate similar views on my comments with the oil contract:
    https://www.kaieteurnewsonline.com/2018/02/10/are-all-environmental-safeguards-in-place-oil-contract-in-conflict-with-govt-s-optimism/

    Linda, what qualifications do you have to question all of these respectable attorneys and chartered accountants who have every right to criticize the oil contract between Guyana and Exxon Mobil?

    I have brothers who own and operate franchises in Guyana, and the last thing I ever want is for them to be harmed because of Exxon Mobil turning Guyana into another failed state.

    What do you own Linda? Are you those types of Guyanese who fled Burnham in the 1970s, and after 40 years in Canada, America or UK, you don’t have a penny in your name? Tell me!

  • Mark  On February 10, 2018 at 7:54 pm

    “Guyana’s oil has not even left the ocean bottom as yet and you’re off calculating its losses.”

    Let me show you linda why you’re uneducated and classless. It is everywhere known in the newspapers (Kaieteur News, Chronicle and Guyana Times) that Exxon Mobil sent a quote of US$460 Million to Guyana this year- 24 months before oil production.

    Guyana made ZERO Revenue in 2018 for oil, but Exxon sent a quote, so for the fiscal year of 2018, Guyana is in the Red of US$460 Million already in 2018. Guyana has to pay that to Exxon. There’s no offsetting of revenues.

    You have no merit to debate these things unless you’re qualified like Chris Ram or Gaskin. I suspect that you’re one of those brainwashed Guyanese who worship the USA, Canada, UK and the decadent West.

    Sorry to tell you, but the unipolar American empire is being challenged by Russia and China. Trump knows that if he acts aggressively (like how you are in your response) to Russia or China, Vladimir Putin or Xi will not hesitate to press a button to let America bite the dust.

    Guyana is not going to become America or the Western world’s dog. The Mid-East, China and Russia are already making deals with Guyana which are far favourable than Exxon. Brazil is also willing to assist Guyana in its oil industry.

    We should also note that Russia, China, South Africa, India and the Mid-East don’t like the Western homosexual agenda. Russia bans Gay Prides, which is a good thing for society.

    Guyana is not going to be exploited of its oil while LGBT members who have no affiliation with Guyana benefit from its exploitation.

    • Linda  On February 11, 2018 at 2:32 pm

      Here’s a suggestion for you. Since you’re a lawyer and most politicians appear to be lawyers these days, why don’t you run for office in Canada, or better yet, return to the country of your birth and run for office there. Show those buffoons how to run Guyana. I think you have problems with your reading skills. In my reply to you I made no inflammable or uncivil remarks so I don’t know what you interpret those words to mean. Secondly, you told Bernard that you do not call people names….L.I.A.R…..you called Minister Trotman a buffoon and in your last reply to me you called me uneducated and classless. You know nothing about my personal business…my finances you know nothing about, my education you know nothing about, my position in society as it relates to class,… you know nothing about. me and I am most certainly not interested, in who you say or think you are.

      For whom the Gods make great, they first make mad!!!!!

      I’m sure you’ll be chomping at the bit to vomit some more of your bile to my response here but don’t bother because I will not be visiting this post again. You can twist in the wind!!!

    • Maria-Telle  On February 11, 2018 at 6:16 pm

      Ur misogyny, homophobia and hate against Minister Raphael Trotman is not welcome!!!!! Plz do not harass Linda you monster!!!!!!!

      Guyana will become the richest country in the world because of Minister Raphael Trotman you idiot!!!!!! All of you lawyers, Chris Rams, Gaskins, Trinis and NGOs should close your mouths!!!!!!!!!!!!! Trinidad is so dire that violent crime is on the rise! Trinis don’t know how to manage their country!

      Our beloved President and Minister Raphael Trotman will transform Guyana into the wealthiest country that it will become #1 in Gross Domestic Product and per capita by 2021!
      Guyana will become rich. We will become very wealthy that we will have over $500,000 America dollars per capita in Gross Income.
      We will export over 20-30 million barrels of oil a year by 2030 that we will become very wealthy.
      Who knows?! We might export over 50 million barrels of crude oiL DAILY by 2025, and we will become VERY WEALTHY! 🙂 ^_^ 🙂

  • Mark  On February 12, 2018 at 1:47 pm

    I find it laughable that commenters with no experience with contract law or how contracts are formed under law are the first ones to point fingers at me.

    I have no time to respond to Linda or Maria Telle for they are parroty mouth-pieces for the American deep state establishment. I don’t think the average Guyanese is that insane to defend a multi-national billion dollar oil corporation which is accused of numerous infractions in countries like Indonesia, Equatorial Guinea, Cameroon, Nigeria, Syria and Algeria.

    It is almost impossible for Guyana to produce over “50 millions of crude oil DAILY” without that amount causing a crash in the oil futures market, and also depleting the oil reserves which will cause countries like Norway to boycott any business with Guyana. It’s impossible to export 18.5 billion barrels of crude oil a year because Guyana doesn’t have that much oil so far.

    Again, the commenters who attack me are not the intellectuals like Chris Ram or Mr. Hinds, but American apologists.

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