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Guyana could face suspension and possible removal from EITI for failing to update oil reserves
Kaieteur News– Guyana has been a member of the Extractive Industries Transparency Initiative (EITI) since 2017 and could face suspension or even expulsion if it fails to disclose data on the country’s oil, gas or mineral reserves.
Map showing some of the oil and gas discoveries ExxonMobil has made so far in Guyana’s Stabroek Block
EITI is a global standard that promotes open and responsible management of oil, gas and mineral resources in member countries. Guyana is the 53rdroad October 25, 2017, EITI Implementing Countries.
Therefore, the country should comply with the listed requirements and standards in order to maintain its membership. Notably, the third requirement is specifically for exploration and production activities, stipulating that implementing countries and companies should “disclose data on proved economic oil, gas or mineral reserves, if any”.
At the same time, further research by this newspaper found that if the country does not meet these requirements and principles of EITI, its eligibility may be suspended.
Article 8.1 states that “if an Implementing Country demonstrates failure to comply with significant aspects of the EITI Principles and EITI Requirements, the EITI Board will suspend or cancel that country’s participation.”
If the EITI Board is concerned that compliance with the EITI Principles and EITI Requirements is being compromised, it may instruct the EITI International Secretariat to collect information on the situation and submit a report to the EITI Board.
Suspended Implementing Countries are a temporary mechanism. The EITI Board shall set a time limit for Implementing Countries to resolve violations of the EITI Criteria. During the suspension period, the country will be placed in a “suspended” status. If the issues are resolved to the satisfaction of the EITI Board by the deadline, the country’s status and level of progress will be restored, however, if the issues are not resolved to the satisfaction of the EITI Board by the deadline, the EITI Board will remove the country from the list.
Guyana was temporarily suspended from membership by the EITI Board on 1 February 2023 for failing to publish its 2020 EITI report. Following the publication of the report on 30 June 2023, the Secretariat advised that the suspension had been lifted.
However, a new suspension may be imminent as the government has been hiding the extent of oil reserves in the Stabroek block from citizens, even as operator ExxonMobil Guyana Limited (EMGL) has been conducting appraisal activities to determine the value of its discovery.
The latest resource estimate for the Stabroek block in 2022 put it at around 11 billion barrels of recoverable oil. But since then, ExxonMobil has announced eight more discoveries.
Last month, President Irfaan Ali was asked by Kaieteur News during a press conference at State House in Georgetown to comment on his government’s apparent lack of transparency in the management of the oil sector.
In this regard, the head of state explained: “I can’t respond to opinions, what facts do you present? If you say there is a lack of transparency, then where is the lack of transparency?” It is worth noting that the president does not allow Kaieteur News He cited specific examples, but noted that he did not need to address issues related to the industry because the vice president answered questions about it every week.
Ali noted that the government has enacted a new Petroleum Activities Law to govern the industry, passed the Local Content Bill, and established new Production Sharing Agreements (PSAs). Kaieteur News The head of state was reminded that the country still has no idea about the interest rates charged and that the Stabroek reserves have not been updated for two years. However, the president insisted: “I do not know if there is a lack of transparency. I do not agree with you, I can tell you that all the revenues we receive are published in accordance with the law, and if these revenues are not published, there are remedies in the legislation.”
At the same time, the Head of State noted that the country’s reserves are being constantly updated and will be shared with the public once the relevant information is available. “Right now, it is a work in progress in terms of discovery and commercial viability, and we will share all available information with the public once the relevant information is available. Rest assured, we have no intention of not revealing the reserves we have because we want to attract more people,” he said.
Despite the president’s promise to make public updated reserves as it is in the best interest of the country, the government has refused to provide the public with updated data in this regard, even though ExxonMobil has publicly disclosed that it is conducting assessment activities to determine the viability of the resources discovered to date.
The latest resource estimate for the Stabroek block in 2022 showed the country had about 11 billion barrels of recoverable oil reserves. But since then, ExxonMobil has announced eight more discoveries. Stakeholders believe the government deliberately concealed the latest oil reserves from the public because it would lead to more public pressure to renegotiate the 2016 oil agreement with ExxonMobil.
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