In Part 23 this column noted that Indonesia which had taken a lead role in the Production Sharing Contract (PSC) had moved to the Gross Sharing Production Sharing Contract. In fact, in 2015 Mexico and India are the two other countries which have migrated to similar systems, India after considerable debate. That does not mean that there will be a migration wave: just that in the industry nothing stands still. Today’s column looks at a much more basic or preliminary issue involving the petroleum sector – how contracts are in fact awarded.
The real issue is whether there is a policy for the sector to start with. The APNU+AFC was confronted practically from day one with the news of a major oil find. If they were unprepared it would be most natural, even if Robert Persaud, the Minister of Natural Resources and the Environment had briefed the new Minister. Two years on however, there is no policy, no new primary or secondary legislation and one wonders whether and when Minister Trotman will introduce new legislation. In fact, the Minister continues to behave as if he is still to learn the very basics of the sector although this does not suggest that his job is at risk. His two major achievements to date are the signing of a new Petroleum Agreement with the ExxonMobil subsidiary and causing Guyana to become a member of Extractive Industries Transparency Initiative (EITI). Continue reading Every Man, Woman and Child in Guyana Must Become Oil-Minded (Part 24)
Discretion, if not wisdom, suggests to any public official who mis-cites himself, misrepresents the facts on which he makes false claims, accuses others of amnesia and of stupidity, that at the very least, he should just stay silent, if not apologise. Expressed another way is the rule that when you are in a hole, you stop digging. Mr. Aubrey Norton seems unfamiliar with these common sense principles.
In his letter in the Stabroek News of yesterday’s date, Mr. Norton describes as “the summit of stupidity”, the question by attorney-at-law, Mr. Kamal Ramkarran, on how he, Norton voted on the constitutional amendment to article 161 in 2000. Mr. Norton goes on to lecture Mr. Ramkarran that “you don’t vote in such circumstances—the Speaker merely notes that the ayes have it.” Continue reading Mr Norton voted in favour of the bill on Article 161
The debate on the interpretation of Article 161 (2) of the Constitution has continued, with increased intensity, following the rejection of lists of eighteen persons named by the Leader of the Opposition and the unilateral appointment of Justice James Patterson by President Granger. Unfortunately some writers have made claims that are at best incomplete, or are otherwise unsupported by facts.
Mr. Tacuma Ogunseye, WPA executive member in another section of the print media refers to Dr. Rupert Roopnaraine’s advocacy at the level of the WPA Executive of the “need to revisit the Carter formula” and that Roopnaraine had reminded the Executive “that the Carter Model was never intended to be a permanent arrangement and it had outlived its usefulness.” Former General Secretary of the PNC and member of Parliament and now Government functionary, Mr. Aubrey Norton, seeking to justify the President’s unilateral decision, writes that “Jagdeo and PPP laid basis to move away from Carter Formula and it has come back to haunt them”, a claim challenged by Mr. Kamal Ramkarran in yesterday’s Sunday Stabroek. Perhaps a little bit of history of the Constitution and the Elections Commission will help. Continue reading Mr Norton was wrong about the date of the GECOM proviso
Indonesia explores new model
Indonesia, the country that is credited with giving the petroleum world the petroleum production sharing agreement (PSC) in the nineteen sixties, now seems to be walking away from the model. Under that model, the profit determined after deducting prospecting, exploration, production and operating costs is shared between the host state and the oil company in agreed percentages. Not surprisingly, disputes over what could and could not be deducted were frequent. So from the beginning of this year, that country took a huge step toward eradicating the cost recovery regime for upstream cooperation contracts.
To be clear, the new rules do not affect contracts signed prior to that date. The new system, called the Gross Split Production Sharing Contracts sets out a new economic structure for production sharing contracts (“PSC”) based on dividing gross production between the state and PSC Contractors, without a mechanism for the PSC Contractor to recover operating costs. Continue reading Every Man, Woman and Child in Guyana Must Become Oil-Minded (Part 23)
Oil and the Environment
The title of this week’s column is borrowed from a presentation by Annette Arjoon-Martins, Mr. Anand Goolsarran and Ms. Melinda Janki held at Moray House last evening. Annette is of course particularly known for her work with the community in Region One at Shell Beach in protecting marine turtles. Goolsarran is a former Auditor General of Guyana who also served the United Nations in Sierra Leone and Afghanistan, which probably required as much of a skill in auditing as in dodging bullets. Melinda Janki is an attorney-at-law specialising in international environmental law and indigenous and human rights who has also worked for a number of international oil companies.
Not surprisingly, there was much discussion on the environmental permit issued by the Environmental Protection Agency to Esso Exploration & Production Guyana Limited (ExxonMobil) which should see the oil giant and its two JV partners begin to pump oil in 2020. Melinda Janki was adamant that given the weaknesses identified in the documents submitted by ExxonMobil for the issue of an Environmental Permit, the permit that has been issued should be revoked. The documentation comprises an Environmental Impact Assessment, Technical Appendices, Environmental and Socio-Economic Management Plan and Oil Spill Response Plan. Citing statistics and information contained in the documents, Ms. Janki is convinced that a case can be made for the Environmental Permit to be set aside by the Court! Continue reading Every Man, Woman and Child in Guyana Must Become Oil-Minded (Part 22)