“Most ridiculous,” said Opposition Leader Bharrat Jagdeo as he described government’s decision not to sanction oil companies that inflate recoverable costs.
Kaieteur News recently reported that oil companies with which Guyana does business will face no penalties if they are found to overstate the costs that they intend to recover from operations done offshore Guyana.
Director of the Department of Energy, Dr. Mark Bynoe told Kaieteur News that if it is found that companies inflate costs, the department would simply refuse to pay overstatements. That would be the only action taken by the Government to correct any misstatements.
This issue was one that Jagdeo placed emphasis on as he hosted his weekly press conference today at his Church Street Office.
Jagdeo was adamant, “they (oil companies) have to face a penalty.”
He posited that the oil companies are essentially being given an insensitive to inflate their cost simply because they know that no harm will go their way when they so do.
Jagdeo noted, “We the Guyanese people are going to be paying all their costs. So assuming they are buying nuts and bolts or bananas in the market for $100 a pound but they put $200 a pound and we have to pay for the banana that they eat. Then they say we are buying a piece of machinery for US$10M when it is US$5M.”
He continued, “In any situation, there should be a penalty as a deterrent. But, he (Dr. Bynoe) says they will pay no penalty. I wonder if he works for us or the companies. It is an unbelievable statement from someone who heads the Energy Department. This means that you are encouraging the overstatement of costs.”
ExxonMobil and its partners are looking to collect over US$10B from Guyana in the course of two years, in order to pay off for the Liza 1 and 2 field Developments. These costs include those of the two Floating, Production, Storage and Offloading vessels, the Liza Destiny and Liza Unity.
