Minister of Communication, Works and Public Utilities, Gregory Bowen has contradicted Prime Minister Dr. Keith Mitchell’s statement that there was a tendering process for the exploration of Oil and Gas in Grenada’s waters.
At last week’s post-Cabinet Press Briefing hosted by Prime Minister Mitchell, the question of whether there was a tendering process was raised by senior employee with the Government Information Service (GIS), Trevor Thwaites.
The Prime Minister answered in the affirmative and went on to scold the former National Democratic Congress (NDC) administration of Tillman Thomas for the manner in which they dealt with the Russian outfit, Global Petroleum Group that is currently doing the exploration.
“…But of course”, were the words uttered by Dr. Mitchell in response to Thwaites’ question about tendering.
However, one week later Minister Bowen in addressing members of the media at a post-Cabinet Briefing said that GPG was selected by government and an agreement was signed with them for the exploration to take place.
According to Bowen, it was not mandatory in law for there to be a tendering process for that initiative to occur and explained that a tendering process could have deterred investors from coming into Grenada to explore for oil and gas.
“…The law provides for the Minister to enter into an arrangement but look at Grenada – no history of oil and gas – if you put out a tender, do you think anybody will come to you? No”, he said.
“You have to attract people and you have to be very weary of how you attract people and how you tender because of the experience that we’ve had. An agreement was entered into (with GPG)…”, he added.
Minister Bowen who was the Line Minister for Energy at the time of the deal that was struck with the Russians stated that the agreement between GPG and the NNP government was for the company to explore and once something is found to then develop the field.
“After the exploration was made and to get them to do the final stage we had to provide the incentives because other countries are giving it.
“When you are a virgin territory in this area … I think it was remarkable that exploration to this level was done in Grenada where there is no hint (of oil and gas).
“You can say that we’re close to Trinidad and we’re close to Venezuela, so there may be (oil and gas) but when you have to spend $200 million that is not enough. You must coax and you must give the people the feeling that you will go all out with them if you want them to invest that amount.
“Remember the price of oil and gas has fallen significantly, so, even where there are known deposits, people are not developing because the input will not give you the output if you have it – you’re laying there and people are waiting for when the price goes back up for them to come to invest in it.
“The fact that we have people spend millions of dollars … just to find out if something is there and we will know that in the next three months or so and …. whether it is there in sufficient quantity, whether the quality is what you want.
“We’re cautiously optimistic on the hope that the Almighty will bless us with something.
Minister Bowen told reporters that once there is confirmation that there is sufficient oil and gas deposits in Grenada’s territorial waters then GPG will have to seek the necessary finances to go ahead with the development process.
He said: “…You’re talking about billions of US dollars and once you have something there, they will be able to perhaps attract partners and attract the banks to provide the monies so that we can move into development stage”.
The senior government minister pointed out that based on the signed agreement, GPG will be the sole developer for the oil and gas but there is an opportunity for government to get on board if it so desires.
“…Yes, government could always partner ok. So, if we have sufficient funds we could put in and partner and reap in the benefits. Of course, we have our share as a government but if we want to be part of the developer, we can always do that. The law provides for that and the agreement provides for this.
“Where are we getting the funds to put let’s say $100 million? If our share of this is 30% of the profits and we want to share in the other 70%, you must now become a part developer and we could do that…and that could be a concrete investment.
“…You get the monies and you put in there and now you get another 25% of the developer’s programme because you are now part developer. We can do that at any point in time – concessions are normally given for 20 years. So, we can consolidate our position if it reaches that stage…”.
During last week’s post-Cabinet press conference, Prime Minister Mitchell said that government was currently waiting on GPG to give the results of the oil and gas findings.