Gas to shore project, recipe for bankruptcy – US financial expert
Tom Sanzillo, Director of financial analysis at the Institute of Energy Economics and Financial Analysis (IEEFA)
Kaieteur News – Given Guyana’s poor power generation capacity and infrastructure systems, nearly all of the nation’s leaders have thrown their support behind ExxonMobil laying the groundwork to bring gas to shore. But industry experts are firmly convinced that such an initiative could be financially damaging to Guyana, especially when one considers the nation’s weak ability to negotiate fair deals over the country.
Making this point in particular was Tom Sanzillo, Director of financial analysis at the Institute of Energy Economics and Financial Analysis (IEEFA).
He was part of a panel that included an international lawyer, Melinda Janki; Associate Fellow Chatham House, Dr. Valerie Marcel and former minister, Mr. David Patterson.
These industry stakeholders participated in the year-end discussion of Kaieteur Radio’s program Guyana’s Oil and You.
During discussions on Guyana’s acquisition of gas in just four years, Sanzillo said he can certainly appreciate the nation’s aspirations to respond to growing demand for electricity as well as finding a solution to the issue of high power cuts and electricity costs.
He stressed, however, that Guyana’s handling of a top oil deal does not provide any evidence that he can do otherwise with confidence for bringing gas to shore.
The financial expert said, “… I have to be honest about this, the way the contracts for this oil effort were negotiated gives me no confidence that the country has any ability to negotiate the best price for pipeline and infrastructure another to bring him gas up … There is no evidence of that. In fact, one has evidence to the contrary. ”
Sanzillo also highlighted the alarming fact that the citizen still knows whether there is a cost comparison between where renewable markets are and the proposed gas project for Guyana.
In addition, he said, based on his observations of how Guyana’s leaders plan to pursue the gas-to-shore project setting out “a recipe for financial bankruptcy for Guyana.”
In this regard, Sanzillo recalled that leaders had intentions of getting ExxonMobil to build a pipeline that would allow the project to be brought ashore.
Guyana would not pay for the gas but would have to bear the cost of transporting the resource to ExxonMobil.
By being subject to such an arrangement, Sanzillo said Guyana was in simple terms, taking the little oil money it would make and investing it in another fossil fuel project that would leave the country saddled with more of debt.
He said Guyana not only accepted a top-notch deal with the Stabroek bloc but was now moving to invest in a project that will handsomely support the interests of oil companies and their bankers. What he referred to is not only backwards, but a dangerous sediment for Guyana to hang from.