Author: ChrisRam

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Gov’t needs a rational, coherent plan for oil sector

As reports of new oil discoveries are announced, it is becoming increasingly evident that Guyana is on the cusp of becoming a Petroleum Republic with all the attendant implications and consequences. How effectively the country and the government manage the petroleum sector will determine whether we become the petroleum El Dorado or another victim of the Dutch Disease. It is approaching three years since the Granger Administration took the reins of power and therefore assumed responsibility for the management of the country’s petroleum resources. While three years would not normally be considered a long time, in the context of the emerging petroleum sector, Guyana does not have the luxury of time.

Legislatively, the framework for the petroleum sector is outdated and hardly relevant, consisting of the Petroleum (Production) Act of 1939, which was effectively repealed in 1986 and which now has a mere two sections; the Petroleum (Exploration and Production) Act of 1986; and the Petroleum (Exploration and Production) Regulations of 1986 which has never been reviewed or revisited in thirty-one years. Neither the Environmental Protection Agency Act nor the Occupational Health and Safety Act passed in 1996 and 1997 respectively, specifically addresses the petroleum exploration sector. Clearly, that is a grossly deficient platform from which to engage in negotiations that will shape the future of the country and the destiny of its people. Continue reading “Gov’t needs a rational, coherent plan for oil sector”

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Every Man, Woman and Child in Guyana Must Become Oil-Minded (Part 36)

Introduction

Readers will recall that Article 27 – Applicable Law, was addressed in Column 29 which is available on the website of the Stabroek News as well as on chrisram.net. Moving on to Article 28, it is interesting to note that the title of the Article has been modified by the insertion of Social Responsibility before Protection of the Environment. While curious, it is unclear whether this was intentional by the negotiators on the Guyana side, or whether they conflated financial social responsibility with environmental disasters, or worse, they simply could not give a damn.

With the international debate on the environment having been radically altered by undeniable evidence of climate change since Janet Jagan signed the first Esso Agreement in 1999, it would have been expected that Article 28 would have been substantially strengthened. Alas, that is not the case and the only amendment of any substance to this Article is the insertion of a new 28.7 which requires the Minister and the Contractor to establish a programme of financial support for environmental and social projects to be funded directly by the Contractor to the tune of three hundred thousand United States Dollars per calendar year.

On a positive note, this expenditure is not to be included as Recoverable Contract Costs, meaning that the oil companies will bear the cost. Continue reading “Every Man, Woman and Child in Guyana Must Become Oil-Minded (Part 36)”

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Every Man, Woman and Child in Guyana Must Become Oil-Minded (Part 35)

Government inaction now constitutes force majeure!

Today we take up from Article 24 which deals with force majeure, the definition of which is set out in paragraph 2.6. This definition has been amended in the 2016 Trotman Agreement. Without any significance, words like “act of God”, “earthquakes”, “floods”, “tsunamis”, “quarantines” and “piracy” have been inserted, events that would be considered as warranting “force majeure” under any jurisprudence but what is astounding is that “governmental inaction” now constitutes force majeure. I have scoured a range of sources and found no instance in any country or agreement where government inaction constitutes “force majeure”. The source of the amendment is either Trotman or Esso and since it favours Esso one has to assume that the amendment was at Esso’s request.

Paragraph 24.1 of the 1999 began with the words “Any non-performance or delay in performance” has now been qualified with the words “wholly or in part”, meaning that a force majeure in one part of this massive area over which Esso (Exxon) exercises control may arguably be grounds for “force majeure” in the rest of the Contract area which extends to thousands of square miles! Continue reading “Every Man, Woman and Child in Guyana Must Become Oil-Minded (Part 35)”

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Ad against investment crossed a line

On page 24 of yesterday’s edition of Stabroek News appears a paid ad that reads ` Investors beware, GOINVEST elsewhere’.

I salute Stabroek News, Kaieteur News, and the rest of the Guyana media for the work they have been doing in protecting Guyana’s natural resources. Their direct and indirect exposes and analyses of the 2016 Esso/Hess/CNOOC Nexen Petroleum Agreement are courageous, patriotic and worthy of any national media. They have exposed the weaknesses of persons like Ministers Greenidge and Jordan and the dishonesty and doublespeak of Minister Raphael Trotman. The collective errors of judgement, honesty and integrity will cost Guyana dearly for decades to come if the Contract is not renegotiated.

Guyanese therefore have a right to be outraged, but under no circumstances do I support an advertisement that discourages investors to our country. The country needs foreign investors bringing capital, technology and expertise, and providing jobs, revenue and models of good governance practices.

Yes, there will be carpetbaggers, as they are everywhere. Our duty is to establish a system for identifying and weeding those out. In fact, specific to the petroleum sector, if Janet Jagan and to a considerably greater extent, Raphael Trotman had ensured that the requirements of the Petroleum Exploration and Production Act and Regulations were applied, many of the concerns about the 2016 Agreement – important constituent parts of which are still being kept secret – would not even have arisen.

We therefore have legitimate reasons to believe that our Government has acted against the national interest. We must however respond in a measured and patriotic manner. The ad in my view has crossed a line.

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Every Man, Woman and Child in Guyana Must Become Oil-Minded (Part 34)

Just a reminder that this series within a series seeks to compare the Janet Jagan administration’s 1999 Agreement with the Trotman 2016 Agreement and as we closed last week’s column we were on Article 20. We now pick up where we left off last week.

Article 20 (1) also contains provisions requiring and regulating abandonment of petroleum fields, the obligation of notice by the Contractor, and the respective liabilities of the Minister and the Contractor for costs incurred or to be incurred. Article 20 (1) (d) (iii) refers back to the Development Plan required to be submitted under Article 8.4 and provides that “the Contractor shall submit for the Minister’s approval a proposed abandonment programme and budget covering all such installations and pipelines provided by Contractor under this Agreement.” This provision is amended by addition in the 2016 Agreement to allow the Contractor to revise the abandonment programme and budget with the agreement of the Minister to account for any changes in the Development Plan.

Absurdly, the 2016 Agreement retains the section of the 1999 Agreement which requires that if the Contractor does not present a timely proposal to the Minister for abandonment, the Minister may, after giving thirty (30) days’ notice to the Contractor, prepare an abandonment programme and budget for the Contract Area!!! Such a major matter should constitute a fundamental breach but instead, the Minister undertakes this substantial responsibility, apparently at his cost! Continue reading “Every Man, Woman and Child in Guyana Must Become Oil-Minded (Part 34)”