Guyana awaits new oil authorities

Changes are coming to the management and policy of Guyana's fledgling oil sector, after a regional court cleared the way for declaring a victory for the opposition in a 2 March parliamentary election.

In a pending declaration by the elections commission (Gecom), the People's Progress Party (PPP) will replace a coalition led by the People's National Congress (PNC) that oversaw the advent of oil production in December 2019.

The PPP will take over for five years, a period expected to witness a surge in offshore output.

ExxonMobil forecasts production of 750,000 b/d by 2025 from its deepwater Stabroek block, which has estimated recoverable resources of 8bn bl.

Yesterday's court ruling should end a rocky post-election period in which president David Granger appeared reluctant to relinquish power despite international pressure, including the threat of targeted US sanctions.

In its ruling yesterday, the Trinidad-based Caribbean Court of Justice (CCJ), which is the region's highest judicial body, said the Guyanese chief elections officer's report that rejected a third of the votes – giving the victory to the ruling coalition – was not valid. The recount of votes was agreed by Granger and PPP leader Bharrat Jagdeo.

"Major changes are likely in the management of the oil sector by a new government," one leading banker in Georgetown told Argus. "As is usual when administrations change, there will be changes in personnel and key agencies and departments. And the PPP has long argued that some production contract terms must be changed to give the country a bigger take from oil."

Among the key figures who could be replaced is Mark Bynoe, director of Guyana's energy department. Others include natural resources minister Raphael Trotman.

The PPP is dissatisfied with the terms concluded by the government with foreign oil companies, the party's leaders have said. Among the PPP's concerns is the contract royalty, which it says is too low.

Nonetheless, the PPP has said it would respect ExxonMobil's contract, as the US company pioneered offshore development.

Renegotiation of contracts could potentially impact Chevron, Total, Repsol, Eni and Tullow.

But Guyana is still not out of the political woods. Granger maintains the CCJ's ruling is invalid, and the coalition "will continue to fight to ensure that the valid votes of all eligible electors count."

The US and Canada called for a speedy end to the process.

By Canute James