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Though Guyana’s blossoming petroleum sector is in desperate need of pruning to ensure the fruits satisfy the needs of the local populace, the country’s leaders have not been hearkening to their respective roles.

This much can be said, particularly about Vice President (VP) Bharrat Jagdeo, who is tasked with management of the local petroleum, according to Attorney-at-Law and Chartered Accountant, Christopher Ram.

Ram in an invited comment on Sunday said he believes the Vice President has been shirking his responsibilities in numerous instances.

He pointed out that only recently the VP told the media that the Environmental Protection Agency (EPA) has been charged with ensuring ExxonMobil supplies a parent company guarantee.

According to Ram, “That is bulls**t. The EPA has nothing to do with insurance. He is refusing to exercise the significant rights and powers that Guyana does still enjoy.”

The Attorney argued, “I think the entire team of people responsible for the oil and gas sector is doing a very poor job. They are not paying enough attention to what the law and what the agreement requires; even the inadequate provisions of the 2016 agreement are not being sufficiently enforced.”

He explained that the 2016 Production Sharing Agreement (PSA) allows for a renegotiation of the oil contract, yet the government seems more inclined to serve the oil companies, rather than the people of Guyana.

“I know the contract and that is why I am so peeved that our representatives are betraying our trust. They prefer to covert with the Americans now than serve the interest of the people of Guyana,” Ram argued.

The Lawyer also dismissed the Vice President’s claim that the People’s Progressive Party (PPP) said it promised to review the oil contracts rather than engage in renegotiating the Stabroek Block deal.

“That is absolute nonsense. Guyanese are not stupid; we know what Jagdeo said and know what he meant. I also know what he told me in private conversation,” Ram challenged.

When it comes to the government using its discretion where permitted in the oil contract, Ram said the judgment of the leaders is completely off. He said the leaders could have inserted a ring-fencing provision; even without bringing Exxon to the table by simply adding a clause to the production licenses granted to the company.

VP Jagdeo is on record saying that this was a sore issue that the PPP would address. His position has however now changed, as the VP argues the need for ‘sanctity of contracts’.

The Attorney said, “I have made this point Ad nauseam that we did not necessarily need a ring-fencing provision [in the contract]. All they [government] have to do is to say that the revenue under any production license cannot be used to exploration purposes. It’s as simple as that. I really do believe that they are not applying themselves.”

Meanwhile, as it regards conducting audits of ExxonMobil, it was recently reported that Jagdeo directed this publication to the Minister of Natural Resources, Vickram Bharrat.

The Minister has never held a press conference and is usually not the first to address such issues. In fact, when Kaieteur News reached out to the Minister, he explained that the VP had already addressed the audits. The Minister was told that Jagdeo directed the question of the audits to him, but he never responded.

On the other hand, Ram believes that the government is not ensuring the oil companies’ financial statements are being prepared to reflect the nature of the expenses to develop the resources.

He said, “I don’t think that the oil companies’ financial statements are provided in the manner in which they ought to be prepared and that’s a blatant and glaring weakness that is being exploited by the oil company. Annex C sets out the order, nature and presentation of expenses and what the government is doing is allowing Exxon and its two partners to get away with all kinds of improper accounting.”

Ram added, “It all began with the pre-contract costs which were grossly inflated. I am really getting aggravated to see how they are screwing up this entire arrangement.”

The Chartered Accountant pointed out that Annex C identifies how expenses are organized and this is how the company should have been reporting their expenses. None of the reports meet the requirement of Annex C he said. Moreover the reports themselves are inconsistent with each other, according to Ram. Due to this, he said Exxon can bill Guyana for items that should not be recovered through Guyana’s oil.

The Attorney observed, “The manner of oversight is so weak that Exxon and the two other companies can probably prepare their accounts however they wish and organize the accounts in such a way that it becomes extremely difficult to carry out an objective and critical review even as the poor oversight allows claims for cost which are not justified in the agreement.

Article was Published on July 16, 2021

Gas to shore project – too many questions yet to be answered

Introduction

Over the past few weeks ExxonMobil has been holding public consultations on an application to the Environmental Protection Agency (EPA) for an Environmental Authorisation for what it describes as a Gas to Energy Project Onshore and Offshore. According to the Project Summary, it includes the construction and operation of a pipeline from the Liza Phase 1 and Liza Phase 2 Floating, Production, Storage, and Offloading (FPSO) vessels to an onshore natural gas liquids (NGL) and natural gas processing plant (NGL Plant). The summary also states that the power plant will be owned and operated by Government of Guyana.

At the same time, the Ministry of Natural Resources is advertising for expressions of interest for what it describes as Gas Related Investments which include:

• Joint participation with the Government of Guyana and Esso in designing or utilising the outputs from an NGL/LPG facility and related facilities.
• Design, construction, and financing of a power plant fuelled by natural gas, where the power will be delivered into the GPL grid.
• Industries that can utilize natural gas for “natural gas driven developments and growth.”

A reasonable reading of the two initiatives is that these are discrete and separate but yet interdependent projects with separate ownership, financing and operations, with their own economic, environmental and financial considerations. Esso is currently engaged in a series of public consultations in which the EPA and the Ministry of Natural Resources play an undefined but over-defensive role. The statutory basis of the consultations however is hazy at best.   

Back to the Agreement

Whether Guyanese is better informed after the consultation is left to be seen, but let us take a step back and look at the provisions of the 2016 Petroleum Agreement on gas. In fact, Column 43 (May 11, 2018) examined and commented on the Article from which this column now borrows. The Agreement provides that Associated Gas produced from any Oil Field within the Contract Area must first be used for the purposes related to the operations of production and production enhancement of Oil Fields, such as Gas injection, Gas Lifting and power generation.

One might be tempted to think that this refers to the purpose for which it is now proposed but this is doubtful. Indeed, power generation could refer simply to the generation of electricity by the FPSO’s and other vessels at the well sites. Further conflicting evidence is found in the Article which requires the Operator to include in the Development Plan of each Oil Field a plan for the utilisation of the Associated Gas. The Article goes on to provide that where there is any excess Associated Gas, the Contractor is required to carry out a feasibility study regarding the utilisation of such excess Gas and to include it in the Development Plan for the Oil Field.

The representative of the Ministry of Natural Resources has confirmed that there is not one but several such Development Plans. That would suggest that Esso has conducted a feasibility study and must have satisfied itself of its economic benefits of development of the gas resources. As a measure of the lack of any ringfencing of costs, the Article provides that all costs and expenses incurred by the oil companies in the product ion and/or disposal of the Associated Gas of an Oil Field and the costs incurred in the feasibility of the utilisation of the excess Associated Gas is Recoverable Contract Costs.

On the other hand, all costs incurred by the Government for the infrastructure and handling of excess Associated Gas not included in an approved Development Plan is at the sole risk and expense of the Government and will not affect the amount of the Cost Oil and Profit Oil due to the Contractor.

Our patrimony is in the hands of the oil companies

Article 12.1 (c) provides that where the Contractor believes that excess Associated Gas of an Oil Field has commercial value, the Contractor is entitled, but not required, to make further investment to utilise such excess Associated Gas subject to terms at least as attractive as those established for Crude Oil in Article 11 dealing with Recoverable Contract Costs. In any case in which the Contractor believes improved terms are necessary for the development of excess Associated Gas, the Agreement requires the Government and the three oil companies to “carry out friendly negotiations in a timely manner to find a new solution to the utilisation of said excess Associated Gas and reach an agreement in writing.” Over what is our patrimony, the Minister can only lay claim if the Contractor confirms to him by Notice to him that it will not include the development of excess Associated Gas in its or their Development Plan. Clearly, that is no longer the case. Esso is in the driver’s seat for gas as well.

This was Published on July 20,2020

The High Court will today deliver its ruling in APNU’s latest case, this time instituted by its Agent Misenga Jones. Let us face reality: this is part of the plan to delay the declaration of the results of the March 2 elections – now a full 140 days since and an incredible 577 days since the December 21, 2018 no- confidence motion (NCM). Once considered scaremongering, the fear that the APNU would not give up power seems to be validated. It is not a series of unconnected events that there were three court cases on the NCM involving the High Court, the Court of Appeal and the Caribbean Court of Justice. And so far, there have been eight cases, including appeals, arising out of the elections: one before the CCJ, two before the Court of Appeal, one before the Full Court and four before the High Court. If the decision today goes against the APNU, it is almost certain that the Court of Appeal and the CCJ will have further work.

Those legal games are not about law, it is about lawlessness. It is not about the fairness of elections, it is about the rigging of elections. It is not about conceding to who or conceding to what. It is a power grab, an electoral coup, the attempted entrenchment of a dictatorship where one group considers itself superior and another inferior.   

For APNU, it is their assertion of perpetual power, the control of state resources and denial of the vote of one out of every two electors in Guyana. Apparently for them only some votes matter. And yet, Guyanese remain remarkably patient, simply wondering if when and how it will end. Fortunately or unfortunately, the same is not true of the international community. They are neither taken in by the ruses and tactics of the APNU, nor possessed of the unlimited patience of Guyanese.

The US State Department has already announced visa restrictions on those engaged in denying democracy in Guyana with the warning that punitive action will be escalated and targets widened. With signals of similar action by regional, hemispheric and international nations and groups, Guyana will find itself not only more isolated than it has ever been but more isolated than any other country in the world – Iran, Syria, Venezuela and Zimbabwe included. 

Five years ago, Granger was touting his decency, honesty and integrity. He came to power the model of an upright individual, intolerant of improprieties, committed to values. Yet, in five relatively short years the path of his Government is littered with constitutional violations, corruption, cynicism, ethnic preferences, waste and extravagance, arrogance and delusion. Those of us who promoted and supported him find it impossible to recognise the David Granger of five years ago. The veneer of virtues has been shattered. With a determination that borders on the irrational, Granger seems willing to take Guyana into that black hole. And yet, not a single institutional member of the Coalition, not even the JFAP, is decent or brave enough to say, to borrow Andaiye’s famous words, “Not in our name”.

They are all it seems, under the spell of Joe Harmon, the master of bravado, the untouchable and above and beyond the law. A lawyer himself, he seems willing to court international notoriety by mocking the threat of sanctions. He clearly is unmindful and uncaring of the consequences of his further acts of recklessness to the country and its people. Time will tell whether he is indeed as invincible and untouchable as he thinks he is. 

For more reasons than one, I do not celebrate sanctions and do believe that problems concerning Guyana should be solved in Guyana. But I do not accept that the theft of an election is a purely domestic matter since it infects and infests all with whom it comes into contact. It is for that reason and that reason alone that I support sanctions. Bullies, cheats and thieves must realise that evil does not pay.

Yours faithfully,

Christopher Ram  

This was Published on October 26, 2020

The Guyana Elections Commission (GECOM) has not replied to an October 12, 2020 letter from commentator Christopher Ram requesting copies of the declaration of expenses by political parties which contested the March 2nd general elections.

Ram had written GECOM Chair Claudette Singh pointing out that according to Section 108 of the Representation of the People Act, the election agent of each group of candidates has to forward to the Chief Election Officer a return in Form 26 of the Act.

He pointed out that this return was due no later than 35 days following the declaration of the result which would have been September 7th.  Ram also pointed out that in the absence of an authorised excuse the failure to comply “constitutes an illegal practice”.

Ram further noted that Section 109 requires the publication in the Official Gazette of a summary of the returns and a notice of the time and place at which the return and declaration can be inspected or copies of these purchased. Ram said he was desirous of obtaining copies of the returns for analysis and public dissemination.

The letter was sent to Singh and copied to the six commissioners.

In a statement on Saturday, Ram expressed regret that he had not even been given the courtesy of a reply by Singh. He said that the provision is not unrelated to campaign financing, “a matter about which I have advocated for decades, and which is intended to bring accountability (to) the political parties which at the moment is close to zero. This is not good for democracy ..for our country”.

This was Published on July 3, 2020

Dear Editor,

The lull in election letters as we move towards the election defeat staring the APNU+AFC+WPA, allows me the opportunity to react to the responses to my letter of June 13, 2020 edition of SN, `A movement once famous for its values and Rodneyite principles is now deeply involved in attempts to rig the 2020 elections’. Readers will probably recall that a response came first from Tacuma Ogunseye, then Desmond Trotman and latterly Eusi Kwayana.  I will ignore the innuendoes and attempted attacks by Ogunseye and Trotman as unworthy of both the WPA we all knew, or a reply and merely seek to correct Kwayana who seemed to mix-up, unwittingly I hope, my reference to our conversation when he was leaving Guyana in the heat of the Buxton troubles with when he returned for the Walter Rodney Commission of Inquiry. I would like to maintain my respect for Kwayana and the privacy of our conversations even as he chooses to highlight a narrative reflective of an obviously evolved view of events and key actors.

I was both surprised and amused at the lengths to which Ogunseye would go to fabricate facts. He accused me of being a major shareholder in a company of which Ram & McRae is the independent auditor a statement which an Editor’s note forced him to retract. That was not his only fabrication. His letter also stated that “What Ram has failed to tell readers is that it was under the PNC/Burnham regime, aided by his buddy, Elvin McDavid, who at the time was a powerful politician in the ruling party and government that “opened” the door for Ram to emerge as a successful businessman and now an economic power in the country. The genesis of his economic empire lies in the support he received from Mc David’s organised “state patronage”.

As the following shows, and he can confirm this with Kwayana, the facts are quite different.

I left Guyana as an employed person in 1978 for Grenada where I worked first with Coopers & Lybrand and then the People’s Revolutionary Government (PRG) led by Maurice Bishop. After the invasion, I returned to Guyana with my young family to set up home. Among those returning were Freddie Kissoon, Ms. Denise Cossou and economists Claremont Kirton and Eddie Dewar. The latter two and I set up the ambitiously named Management and Economic Consultancy Services Limited along partnership lines. After a few months of struggle and no work, they packed up and left. I was determined to stay on and set up an accounting practice which Ogun refers to as an economic power.

Miles Fitzpatrick who had also worked with the PRG rejoined the law firm de Caires and Fitzpatrick and persuaded David de Caires to give me “a brace”. I would visit their office every Friday afternoon to balance the partnership’s books. I supplemented my meagre income by doing some moonlighting accounting work with an old friend from South West London College who had an accounting practice in Central Trinidad. Because I had written in 1980 as Purpose of Visit on my immigration landing card “To attend Walter Rodney’s Funeral”, a complete search of person and luggage on arrival had become obligatory. I soon discovered however that an offer of a copy of Time magazine as good an explanation as any to ease the entry process!

In the meantime, I had reconnected with Paul Chan-a-Sue, my old boss from Bookers Stores Limited Guyana. Paul offered me a small engagement to set up an accounting system at National Printers Ltd. Shortly before the commencement date, Paul informed me that he had been “advised” by Mr. Elvin McDavid, Chief Political Advisor to President Burnham, to withdraw the offer on the instructions of Burnham. (Mr. Chan-a-Sue who is still around has consented to my use of his name in this letter). During that time when the State boasted of controlling the commanding heights of the economy, all State audit and accounting work was reserved entirely for Thomas, Stoll and Dias. Even crumbs were not available to the few private accounting and audit firms around and the period witnessed the exodus of some of our brightest accountants.  

Sometime after McDavid’s removal by Hoyte as Chief Political Adviser to the President following Burnham’s death, Mrs. Doreen de Caires called to tell me that McDavid, whose house in Queenstown had been rented by the Stabroek News, was concerned about his tax affairs and requested her to inquire of me whether I would assist him. I agreed and brought his affairs up to date, all at no cost.

Anyone who knows Elvin would tell you he was not a shy man and even while we were meeting to finalise his work, he requested similar work for Mrs. Viola Burnham on the same terms which he enjoyed! I agreed and I have to say that I have met few women with Mrs. Burnham’s charm, elegance and humility. Elvin and I did become friends in the late eighties, and he as the pioneer of the Burnham Foundation invited me to deliver the feature presentation at one of the early anniversary events for Burnham. But money or work from Burnham, McDavid and Viola? – definitely never.      

I do not need any further apology from Mr. Ogunseye. What is important to me is that the public must not be misled or deceived by those in support of our new riggers.

Yours faithfully,

Christopher Ram