Category: The Road to First Oil

Introduction

In keeping with a recent undertaking, the Government of Guyana yesterday released the Petroleum Agreement entered into on its behalf by Mr. Raphael Trotman with American oil companies Esso Exploration and Production Guyana Limited and Hess Guyana Exploration Limited and CNOOC NEXEN Production Guyana Limited, from China. The Agreement is dated 27 June 2016 and appears to have been lodged with and assigned the number 1794/2016 by the Deeds Registry, a public repository of information, but kept hidden from the public for well over a year. This column will return to this in a subsequent column.

The purpose of today’s column is to highlight certain features of the Agreement and to draw relevant comparisons with the 1999 Agreement signed by then President Janet Jagan in her capacity as Minister responsible for petroleum. That Agreement too, was kept secret for nearly two decades until this newspaper published a copy earlier this year on its website. Except where explicitly stated, references to Agreement are to the 2016 Agreement. Continue reading “Every Man, Woman and Child in Guyana Must Become Oil-Minded (Part 29)”

Introduction

The final, belated and reluctant admission by the Government of Guyana that it received a signing bonus from ExxonMobil, seems to have caused increasing curiosity, not least because the amount disclosed is a rather odd-sounding US$18 million. While President Granger and his Foreign Minister Carl Greenidge were forced to admit the receipt of a bonus after ExxonMobil had named a figure, neither of them has volunteered critical and relevant information. Accordingly, President Granger, Vice President Carl Greenidge and Natural Resources Minister Raphael Trotman are kindly asked to provide information on the following:

a. the reason for renegotiating the 1999 Agreement and whether it was an initiative of the Government or ExxonMobil

b. the names of the Guyana negotiators and the leader of the team;

c. corresponding information on the opposing negotiating team(s);

d. the location(s) at which negotiations took place;

e. the period over which such negotiations took place;

f. whether the team had met with Cabinet and had been given any negotiating brief; Continue reading “Every Man, Woman and Child in Guyana Must Become Oil-Minded (Part 28)”

New Account

On the day this column appeared last week, the press in Guyana, in an outstanding case of enterprising journalism, confirmed that Guyana had indeed received a signing bonus from ExxonMobil. The evidence was out – a letter from the Finance Secretary, a Permanent Secretary equivalent, in the Ministry of Finance to the Governor of the Bank of Guyana with the caption Signing Bonus granted by ExxonMobil – Request to open Bank Account.

But if anyone thought that the trail of obfuscation, deception and outright lies peddled since the fourth quarter of 2016 had come to an end, a new cycle began. First of all, even after the publication of the letter, Government spokespersons did not disclose the sum received which eventually came out of ExxonMobil after its country manager was collared at one of the company’s outreaches.

The saga involved the Ministers of Finance and Natural Resources, the President himself, the Foreign Minister and the Minister of State. Outside of the government, the local anti-corruption body Transparency Institute, Justice Institute of Guyana, the former Auditor General of Guyana and the independent dailies were appalled to find that the APNU+AFC had taken a dangerous road of concealment with ever more outrageous and inane excuses being made by key government spokespersons. Continue reading “Every Man, Woman and Child in Guyana Must Become Oil-Minded (Part 27)”

Stability of Agreement Clauses in Oil Contracts

This Column touched earlier on what the Model Petroleum Contract describes as a Stability Clause, the objective of which is to provide assurance to international oil companies that they will be protected from any variation in fiscal or economic policies by governments for a period of as much as thirty years. Here is how the Model Agreement describes that clause:

Government shall not, following the Effective Date, unilaterally increase the contractual obligations of the contractor under this Agreement or diminish the contractual rights of the Contractor hereunder as such obligations and rights exist as of the Effective Date.

If any level of government, promulgates new or amended laws, decrees or regulations, which negatively impacts the contractor’s economic benefits, the Parties shall promptly make revisions and adjustments to this Agreement as necessary to maintain the contractor’s economic entitlements at the level existing as of the effective date.

Continue reading “Every Man, Woman and Child in Guyana Must Become Oil-Minded (Part 26)”