GEORGETOWN, Guyana, Monday May 27, 2019 –
Despite the political uncertainty in Guyana, pending the Caribbean Court of
Justice (CCJ) ruling on whether the no-confidence vote passed against the
government in December last year was valid, US multinational investment bank
Morgan Stanley believes that the country’s oil development plans remain on
it said rumours of investigations into corruption in the award of oil blocks
should not affect the plans either.
Morgan Stanley’s position was outlined in an article by OilNOW online news, which stated that the potential for new elections and the investigation rumours were discussed at a meeting last week with Jay Wilson, VP of Investor Relations at Hess Corporation.
The bank said investors have been concerned that the
political uncertainty – over whether the CCJ will rule the no-confidence motion
was invalid or rule that it was valid and order fresh elections – may result in the government changing the
production sharing contract terms or delaying approval of additional development.
However, it noted: “The recently announced Final Investment
Decision for Phase 2 of development occurred despite this political uncertainty
and included no changes to the production sharing contract or royalty regime.”
Stanley said it believes that regardless of the CCJ decision and the outcome of
the next elections, there is no near-term risk to the production sharing
contact, since both political parties have stated support for the existing
contract with co-venturers ExxonMobil, Hess and CNOOC Nexen Petroleum Guyana
media reports that the Guyana State Asset Recovery Agency is investigating the
issuance of exploration licences in several offshore Guyana blocks – Kaieteur,
Canje, Orinduik and Stabroek – Morgan Stanley said that the message from Hess
was clear: “the Stabroek exploration license was fairly and transparently
awarded” to ExxonMobil.
And it said that in “looking through the noise”, it sees “only limited risk in Guyana and significant potential upside.”