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ExxonMobil’s former VP’s Guyana gas monetization contract raises new concerns
Kaieteur News – A company with less than a year of experience, founded by a former vice president of ExxonMobil Guyana Limited (EMGL), has been awarded a contract to monetize Guyana’s natural gas resources.
Fulcrum LNG founder and CEO Jesus Bronchalo has worked with ExxonMobil for nearly two decades.
Earlier this year, the Government of Guyana issued a request for proposals (RFB) locally and internationally to design, finance, build and operate the necessary gas infrastructure to support upstream development in Guyana. The Government invited qualified developers to submit proposals for integrated solutions to develop the required gas infrastructure, including the pipelines required to connect to and profit from upstream gas.
Out of 17 bids, the Guyana government selected Fulcrum LNG, founded by Jesus Bronchalo. Bronchalo worked at ExxonMobil for 19 years and one month. His last position with the company was vice president and chief commercial officer for Guyana operations; his term ended in February 2023.
A few months later, in July 2023, Bronchalo reportedly founded energy company Fulcrum LNG, which has “experience and expertise in all aspects of the oil and gas value chain, including low-carbon solutions.”
“Our approach to gas infrastructure development enables faster development and execution of projects that can generate revenue faster, deliver reliable energy to the world, and provide a decarbonization alternative by shifting to significantly less polluting energy sources,” the company said on its website.
Importantly, the company said it works with some of the industry’s leading global engineering, technology and finance companies, as well as global LNG buyers, to deploy state-of-the-art technologies and sustainable solutions to create maximum value for its customers.
There is no mention of completed projects on the Fulcrum website. The deal between the Guyana government and former ExxonMobil executives continues to draw attention as company details remain unclear. Notably, Fulcrum LNG will be responsible for developing the country’s natural gas resources for monetization, but given its relationship with ExxonMobil, stakeholders remain concerned about whether Guyana’s interests will be protected in the deal.
“Less than a year after leaving Exxon, this company was awarded this contract. This company is new and has no track record,” opposition MP David Patterson told Kaieteur News. He pointed out that the production sharing agreement (PSA) signed with ExxonMobil highlighted the need for the oil company to conduct a feasibility study on the use of natural gas resources.
Furthermore, Patterson urged: “Based on the fact that the Japanese government paid a former Trinidadian minister $20,000 to develop a policy, only to end up with a substandard document, the terms of reference for any new contract should be open for comment, otherwise we will end up with a similar end product.” The former minister also reminded that the Japanese government produced a draft gas roadmap around 2018 and offered to provide a more comprehensive document for free. Therefore, he asked why the government did not explore this option.
Is there a conflict of interest?
The Ministry of Natural Resources in June defended the award of the contract to Fulcrum LNG. It said the ministry set up an “independent and highly skilled” evaluation panel to conduct a detailed and rigorous assessment of all 17 bids. Fulcrum LNG was deemed the most responsive and compliant bidder, ranking first, followed by CNOOC Power and Gas Group, ranked second, and a consortium of local and international companies, ranked third. “As such, Fulcrum LNG will support the government and Stabroek block operator ExxonMobil Guyana in the utilisation of non-associated gas – as a standalone development project,” the ministry said.
Meanwhile, with regard to the company’s CEO, the ministry acknowledged that while Bronchalo was a senior employee of ExxonMobil, his involvement with Fulcrum LNG was well known at the time of the assessment and his previous relationship with ExxonMobil was not considered a conflict of interest as he had severed all ties with the company. First Fulcrum LNG contract award announced President Irfaan Ali said this at a press conference at the Presidential Palace in June.
He explained: “We have recently completed an expression of interest for a large gas project (gas-to-power project) outside of the Welsh development. We have identified a company that along with the Government of Guyana, ExxonMobil and its partners must now have discussions and together we must develop a model and a plan to move forward with this large gas development in our country.”
The head of state was keen to point out that the government has formed a technical team to participate in discussions and draft a model for the utilization of natural gas resources. President Ali expects to sign a Heads of State Agreement in this regard next year. “We want to monetize gas as soon as possible to add an additional source of revenue, not only from gas but also from the condensate that comes with it. In fact, this is a huge opportunity and potential for us, but we cannot know this, we cannot know the extent of the opportunity, until a comprehensive technical (and) financial analysis is completed, we will know what we have,” he said.
To this end, Ali revealed that several possibilities are being studied, including exporting energy through the development of energy corridors to Brazil and Suriname. In addition, he mentioned the marketing of natural gas by-products. Ali also hinted at the possibility of building a second power plant to make the country an electricity exporter.
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