Guyana wants Exxon-Mobil to front-load some oil profits for major projects

Last Updated on Thursday, 26 November 2015, 16:09 by GxMedia

The area offshore Essequibo where Exxon-Mobil found a huge deposit of oil earlier this year.

Guyana plans to ask American oil-giant, Exxon-Mobil, for a huge chunk of profits ahead of commercial production to fund several major projects including a road to Brazil, says Minister of Governance Raphael Trotman.

“Government wants to open up Guyana so we are looking at things like the road to Brazil, roads into some parts of the hinterland, ensuring that we have low-cost travel by air or road to some of these places,” he told reporters.  The proposed road link is part of the infrastructural integration plan by the Union of South American Nations (UNASUR).

Trotman could not confirm whether the upfront payment would be in the vicinity of US$2 billion.

Transportation agreements for cargo and people as well as vehicular licensing are already in force between the two countries.

He said the idea would be discussed with the President of Exxon-Mobil, Rex Tillerson when he comes here next January to meet with President David Granger who is also the Minister of Petroleum. “We have looked at other countries where oil companies have made a kind of an upfront payment in anticipation but I think we need to get a better sense now of when they are likely to go to production,” said Trotman.

Exxon-Mobil in late May, 2015 announced its discovery of a huge deposit at the Liza well offshore the Essequibo Coast of Guyana.

The Minister of Governance said some of the funds would also be spent on improving the University of Guyana and the Guyana Technical Institute as well as the construction of other roads to further open up the hinterland.

Experts from Canada’s University of Calgary were this week in Guyana sharing its expertise on the establishment of a Sovereign Wealth Fund into which revenues from oil and other extractive industries would be deposited.

Draft legislation governing a fund would be tabled in the 65-seat National Assembly early next year.

Public consultations on the operations of such a facility are also being planned.