GOG statement on the oil and gas sector
The Government of Guyana has consistently made it clear publicly that one of our priorities in the oil and gas sector is the development of our country’s gas resources. As a result, and immediately after assuming office in August 2020, work started on the gas-to-shore project which is set to cut electricity costs by at least 50% and stimulate massive economic activities, especially in the industrial and manufacturing sectors upon completion.
Recognizing that the gas-to-shore project will utilize a relatively modest amount of gas and is geared more towards power generation, plans to utilize and monetise our total reserves of associated gas were discussed on several occasions with ExxonMobil and its partners. These discussions were guided by our government’s aim to generate additional revenue for the country and create opportunities for Guyanese, through upstream and downstream development of infrastructure to harness our associated gas reserves.
After many discussions with the Stabroek block operator and realising that the development of the gas resource is not an immediate priority for the company, our government decided to seek a capable independent third-party operator to either work with ExxonMobil or carry out this activity on its own.
Consequently, a decision was taken earlier this year to advertise locally and internationally through a Request for Bids (RFB) for the Design, Finance, Construction, and Operation of essential gas infrastructure to support upstream developments in Guyana. Proposals were invited from qualified developers for comprehensive solutions to develop the required gas infrastructure, which includes the necessary pipelines to connect and monetize upstream gas.
Key dates:
Opening date: January 12, 2024
Closing date: February 27, 2024
Bid statistics:
Number of registered bidders: 52
Number of bids recorded at opening: 17
An independent and technically competent evaluation team was then established by the Ministry of Natural Resources to conduct a detailed and robust evaluation of all 17 proposals based on the technical and administrative submissions received. Fulcrum LNG, a US-based company, was deemed the most responsive compliant bidder and ranked No. 1, followed by CNOOC Power and Gas Group, ranked No. 2, and a consortium of local and international companies which were ranked No. 3. As such, Fulcrum LNG will be supporting the government and the Stabroek Block operator, ExxonMobil Guyana, to utilise the non-associated gas – serving as an independent development.
Fulcrum LNG’s submission was very detailed and comprehensive, and outlined a structured approach to gas development; hence the evaluators were satisfied based on the submission of its competency which resulted in the company being ranked No. 1. In summary, the Fulcrum LNG proposal was considered by the evaluators as the most comprehensive and technically sound proposal.
The evaluation report was then submitted to the cabinet with no objection. The Cabinet deliberated and examined the report and granted its no objection for Fulcrum LNG to be engaged. Following the Cabinet’s consideration of the matter, the Ministry of Natural Resources has engaged the company along with ExxonMobil to begin the process. These discussions are at a preliminary stage and are ongoing.
The ministry has noted recent questions surrounding the Chief Executive Officer Mr. Jesus Bronchalo of Fulcrum LNG, who is indeed a former senior employee of ExxonMobil. At the time of the evaluation, Mr. Bronchalo’s involvement in Fulcrum LNG was known, and his previous relationship with ExxonMobil was not seen as presenting a conflict of interest, since he had severed all ties with said company.
The Government of Guyana has every intention of advancing, in the most transparent manner possible, the development of the infrastructure needed to harness our country’s vast gas resources, in the interest of national development and to the benefit of the Guyanese people.