Gas and Min­is­ter Pat­ter­son

Stabroek News - - STABROEK NEWS -

To­day’s col­umn car­ries out a com­mit­ment I made in a let­ter ear­lier this week re­spond­ing to a state­ment by Mr. David Pat­ter­son, Min­is­ter of Pub­lic In­fra­struc­ture ap­pear­ing in the last Sun­day Stabroek. Pat­ter­son re­ports that a Dutch com­pany will be un­der­tak­ing an ocean floor map­ping “as gov­ern­ment pre­pares to bring nat­u­ral gas on­shore”.

In my re­sponse, I said that it was un­clear how much this map­ping will cost and where it is pro­vided for in the Bud­get. Af­ter re­view­ing the 2019 Es­ti­mates, I noted that the clos­est such an ac­tiv­ity came to be­ing a project was de­scribed on page 467 of Vol­ume 1 of the Es­ti­mates as an En­ergy Ma­trix Di­ver­si­fi­ca­tion Pro­gramme for which there is an al­lo­ca­tion of $600 mil­lion for pro­vi­sion for stud­ies and dis­tri­bu­tion in­fra­struc­ture in the cap­i­tal bud­get of the Min­istry of Pub­lic In­fra­struc­ture.

I have since com­pared the 2019 Es­ti­mates with that of 2018 and it is in­ter­est­ing to note that the Project Code for the de­scrip­tion is 2609800 which is a new Code and which there­fore, did not ap­pear in the 2018 Es­ti­mates.

It may be rea­son­able to con­clude that the ac­tiv­ity is a com­pletely new one com­menc­ing in 2019. But then, noth­ing can be taken for granted and Min­is­ter Pat­ter­son had been talk­ing about gas as early as 2017, and mul­ti­ple times in 2018. For ex­am­ple, the Stabroek News of De­cem­ber 29, 2017 head­lined a story in which Pat­ter­son is quoted as say­ing that a pos­si­ble site for nat­u­ral gas pipe­lines would be iden­ti­fied in Jan­uary 2018. This re­port was fol­lowed by an ex­change be­tween En­gi­neer Charles So­han and Pat­ter­son from which Pat­ter­son seemed to have learnt noth­ing, not even from the Plain Lan­guage read­ing of the Pe­tro­leum Agree­ment signed by Mr. Raphael Trot­man. It prob­a­bly bears re­peat­ing that Pat­ter­son is one of Pres­i­dent Granger’s Quin­tet who should be lead­ing the coun­try’s march to First Oil.

Mr. Pat­ter­son con­tin­ued with his ba­nal­ity and on July 9, 2018, he is re­ported in the Stabroek News to have stated that plans were quick­en­ing for a 200 MW plant, ap­par­ently com­pletely obliv­i­ous that ExxonMo­bil had in­formed the Gov­ern­ment that the com­pany be­lieved that it would be “more ben­e­fi­cial mon­e­tar­ily to this coun­try if all the nat­u­ral gas was used for well in­jec­tion pur­poses off­shore.” To be fair to Mr. Pat­ter­son, or per­haps not wish­ing to em­bar­rass the Min­is­ter, Mr. Rod Hen­der­son, ExxonMo­bil’s Coun­try Rep­re­sen­ta­tive did say that the com­pany was work­ing with the Gov­ern­ment to bring a cleaner and cheaper al­ter­na­tive for Guyana’s do­mes­tic use.

Bear in mind that all of this was tak­ing place in 2018 in the ab­sence of any bud­getary al­lo­ca­tion and it can only be as­sumed that any ex­pen­di­ture would have come from the gen­eral funds of Mr. Pat­ter­son’s Min­istry. But when it comes to the man­age­ment of pub­lic funds, Mr. Pat­ter­son is at best sus­pect. He is one of the first mem­bers of this Ad­min­is­tra­tion to have been sub­ject to in­ter­view by the Spe­cial Or­gan­ised Crime Unit (SOCU) while his Min­istry has been in­volved in im­proper pro­cure­ment pro­ce­dures with the pro­posed new De­mer­ara Har­bour Bridge. This has re­sulted in the loss of mil­lions of dol­lars of tax­pay­ers’ funds. We should not for­get too that his Min­istry failed so mis­er­ably in any kind of clean-up ex­er­cise in the mis­spending of about a bil­lion dol­lars that the task was given to an­other, lesser agency.

Pat­ter­son, it seems, is en­gaged in pop­u­lar-sound­ing projects without any over­sight, thought or con­sid­er­a­tion as to the im­pli­ca­tions of his quixotic and ir­re­spon­si­ble ad­ven­tures. Let us say that yes, some­where on the East Coast of De­mer­ara might be a good site for land­ing of nat­u­ral gas. And yes, that the Guyana Power and Light Inc. is in­deed ca­pa­ble of con­vert­ing from its ex­ist­ing heavy fuel oil (HFO). And yes, that the map­ping which Pat­ter­son has now con­tracted out to a Dutch oper­a­tion does prove that the ocean floor is smooth enough for the trans­porta­tion of gas from the pe­tro­leum fields. Does Pat­ter­son not recog­nise that each of these el­e­ments has a sub­stan­tial cost and that that should be a pri­mary con­sid­er­a­tion? And that a holis­tic ap­proach has to be taken in any project eval­u­a­tion?

It is hard to be­lieve that a Min­is­ter of Gov­ern­ment in this day and age, and worse, one who is pro­fes­sion­ally qual­i­fied, does not have this ba­sic un­der­stand­ing or sense of re­spon­si­bil­ity. Or that he ex­cludes from con­sid­er­a­tion the ex­change of our share of profit oil for HFO to be used by GPL, while we get a share of profit gas if and when the Con­trac­tors be­gin to ex­ploit the gas com­mer­cially. To the charge that such an op­tion is in­con­sis­tent with the coun­try’s Green State De­vel­op­ment Strat­egy (GSDS), my re­tort would be whether it is not in­con­sis­tent for a GSDS to sit along­side the pump­ing of 750,000 bar­rels of oil per day.

It is trou­bling to re­alise that pub­lic funds can be so wan­tonly spent without any kind of over­sight and fright­en­ing that Mr. Pat­ter­son’s spend­ing bud­get may in­crease many times over when First Oil ar­rives. I am wor­ried that this has passed our Bud­get Di­rec­tor and can only at­tribute this to over­sight or over­work.

But there is prob­a­bly an even more el­e­men­tary point that has es­caped Mr. Pat­ter­son: Guyana does not have the first call on gas, as I sought to ex­plain in Columns 43 and 45 pub­lished in the Stabroek News in May of 2018. With com­plete re­spect for Mr. Pat­ter­son, I rec­om­mend that he reads ei­ther the two columns, or that he reads Ar­ti­cle 12 of the Agree­ment.

Here fol­lows a brief sum­mary of the two Columns with the caveat that the columns were them­selves sum­maries. The Agree­ment deals with two types of gas – As­so­ci­ated and non-As­so­ci­ated Gas, the first from any Pe­tro­leum Reser­voir pro­duc­ing mainly crude oil while the lat­ter would be any gas not fall­ing within the def­i­ni­tion of As­so­ci­ated Gas.

The or­der of pri­or­ity for util­is­ing Gas is for the pur­poses re­lated to the oper­a­tions of pro­duc­tion and pro­duc­tion en­hance­ment of Oil Fields, such as Gas in­jec­tion, Gas Lift­ing and power gen­er­a­tion. The laid down prin­ci­ple is full util­i­sa­tion of the As­so­ci­ated Gas, and with no im­ped­i­ment to nor­mal pro­duc­tion of Crude Oil.

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