Gov’t does not intend to participate financially in second major gas project – GS Jagdeo

–  Affirms confidence in Fulcrum’s capacity to develop untapped gas resources

With Guyana’s second major gas project requiring billions in investments, the General Secretary of the People’s Progressive Party (PPP) Dr Bharrat Jagdeo has said that the government does not intend to participate financially, at this stage, to advance this major project.

His revelation comes in light of announcements that the government has identified Fulcrum LNG, a United States energy company, as the potential partner to develop Guyana’s untapped gas resources.

According to a release, the Ministry of Natural Resources has engaged the U.S. company along with ExxonMobil to advance this major project, with discussions in a preliminary stage.

“At this stage, we don’t have any intention to participate financially, as owners. Because that means putting aside large sums of money into the venture, which we don’t have, and secondly, it’s a risky undertaking,” Dr Jagdeo said on Thursday during a press conference at Freedom House in direct response to a reporter.

The government plans to use and profit from all the associated gas resources in the Stabroek Block to bring in more revenue for the country and offer new opportunities for the people of Guyana.

Jagdeo reminded reporters that the administration was determined to move forward with the project, with or without Exxon, and would engage a capable independent third-party operator to collaborate with ExxonMobil or carry out the project independently.

Consequently, Request for Bids (RFB) for the design, financing, construction, and operation of essential gas infrastructure to support upstream developments in Guyana were published both locally and internationally.

In response, 17 companies, including the U.S. energy firm, submitted proposals. The U.S. energy firm was identified as the most responsive and compliant bidder, ranking No.1.

As a result, Fulcrum LNG was selected as the company that will support the government and the Stabroek Block operator, ExxonMobil, in utilising the non-associated gas.

“The most comprehensive proposal came from Fulcrum and they had some of the top U.S companies as their partners. You had McDermott, who’s the lead contractor as part of this company. You had Baker Hughes as part of this company…these are some of the top companies in the world…they had clearly the best proposal,” the general secretary affirmed.

Now that the partners are fully interested, DR Jagdeo stated that the government intends to push fully, the project.

He noted that there was no conflict of interest regarding questions about Fulcrum LNG’s CEO, Jesus Bronchalo since he had severed all ties with ExxonMobil, where he served as vice president.

“Exxon has confirmed that there is no conflict of interest here. They said if he had stayed on and was getting benefits from the company, then there would have been a conflict. But he resigned some time ago from Exxon, and therefore there is no conflict of interest,” Dr Jagdeo further underscored.

He added, “Now, people raise questions of start-ups, this is a new company…. but when you look at the partners…these are massive companies.”

The Guyana government has openly stated that one of its primary objectives in the oil and gas sector is the development of the country’s natural gas resources. As a result, shortly after taking office in August 2020, the government began work on the gas-to-shore project.

This project is expected to reduce electricity costs by at least 50 per cent and spur significant economic growth, particularly in the industrial and manufacturing sectors.

The Natural Resources Ministry has made it clear that the government intends to advance transparently, the development of the infrastructure needed to harness Guyana’s vast resources in the interest of national development and the Guyanese people.