Every Man, Woman and Child in Guyana Must Become Oil-Minded – Column 126 – May 21, 2024

Every Man, Woman and Child in Guyana Must Become Oil-Minded – Column 126 – May 21, 2024

Insurance and its adequacy (Part 1)

Introduction

The Official Gazette of 11 May 2023 published two documents – a Guarantee and Indemnity Agreement  dated 9th. June 2023 (GIA) and a Contract of Insurance effective 1st. February 2024. The first deals with the Environmental Obligations of the three Contractors – Exxon, Hess and CNOOC – and the second, with third party insurance taken out by the companies to protect against a range of risks to their assets and operations. The beneficiary under the GIA is the Environmental Protection Agency while the beneficiary under the Contract of Insurance is the oil companies themselves.  

The 39-page GIA is made up of three separate but identical Agreements in which the Guarantors – all affiliates of the oil companies – undertake on behalf of the three Contractors to indemnify the EPA as the beneficiary on behalf of the Guyana Government.

Here is a table of the respective GIAs.

Oil CompanyShareGuarantor  Jurisdiction
Hess Guyana Exploration Limited30%                  Jamestown Ins. Co. Ltd.                       Bermuda  
CNOOC Petroleum Guyana Limited           25%                  CNOOC Limited           Hong Kong
Esso (E & P) Guyana   Limited45%          Exxon Equity Holding Company               Delaware (USA)            

G$2 BN not adequate 

The maximum total sum payable under the three GIA is US$2 Bn., less than bird feed in relation to the average US15 Bn. cost of the last five international environmental disasters. Given the number of wells in simultaneous production in relatively close proximity to each other in the Stabroek Block, the risk of things going wrong increases exponentially.

The 2016 Agreement repeats identically the Indemnity provision of the 1999 Agreement, which was already overgenerous to the oil companies, on more than just royalty and taxation. If the GIAs are all the country can insist on in relation to environmental insurance, then Guyana is dangerously exposed. Any spill can spell disaster, wiping out the Natural Resources Fund in one stroke.  

In every case, the GIA is guaranteed by an affiliate of the respective oil company. In identical wording, the three GIAs assure that the Guarantor is rated by an internationally recognised credit rating agency. It seems that the EPA forgot to ask the name of the credit rating agency, the actual rating. The lawyer representing the EPA should feel extremely uncomfortable about this omission.

 In any case, it is doubtful whether the Agreements meet the requirement of the environmental permits which require Exxon as the Operator, to provide to the EPA legally binding undertakings of adequate financial resources for the Co-Venturers to pay or satisfy their respective environmental obligations regarding the Stabroek Block if their respective Co-venturers fail to do so. A total $2 BN for the three companies is far short of adequate.

The centerpiece of the Environmental Obligations is in respect of any pollution or other harm to the environment caused by petroleum operations in the Stabroek Block. These include the cost to prevent, reduce or contain the discharge or release of any contaminant; any monetary fine or penalty imposed by the government; and any damages arising from failure by the oil companies to comply with lawful directions given by the EPA. 

Bearing the real burden

Drawing down from the GIA is not automatic and will probably be costly since the EPA will have to bear all legal costs incurred by it in enforcing or attempting to enforce the guarantee. To do so, it must first show that there has been a default; that the oil company has failed to discharge its environmental obligation; that the amount does not exceed the sum guaranteed in respect of that oil company; and that the EPA intends to draw down under the Agreement. In strict legal language, the Agreement provides that the Guarantor shall have no liability for any indirect, special, consequential loss, loss of profit or punitive damages arising from or relating to the guarantee and Indemnity Agreement, or the transactions contemplated. The consequences of these exceptions fall squarely on the country.

Suspicion

It is rare for finance companies operating in three different jurisdictions to  have identically worded legal documents, or to have a choice of law in favour of a developing country with only a partially developed legal system. What is unprecedented is to have each of these three Agreements signed on the same day, across three different time zones, in which one signatory is common – that of the EPA head. It is unclear what legal advice the EPA took in negotiating and signing these complex documents, or why the Agreements have no subscribing witnesses, or why all the pages are not initialed as good practice requires.

There is a sneaking suspicion that these Agreements were put together with an eye on the case brought by citizens seeking to have such an agreement produced in court. The three companies have been evasive and possibly dishonest along the way, as the matter wended its way to the CCJ. Courts look with disfavour at such conduct. Something seems wrong that Exxon Guyana is now a major user of an expensive, overburdened court system to which it contributes nothing and extracts every drop of blood and ounce of flesh. Oh, and to have a state agency pay the cost of publishing their documents!    

In a column on Wednesday of this week, I will compare the Guarantee and Indemnity Agreement under the environmental laws with the 2016 Agreement.  

Dear Land of Guyana by Moses V. Nagamootoo – Part 5

A book review by Christopher Ram – May 19, 2024

Introduction

Chapter 20 of the book is a celebration of the women in politics particularly beginning in 1961 when Nagamootoo joined the PPP as a youth in pre-independence Guyana. Three years later the PPP lost parliamentary control and executive power in the first proportional representation elections in Guyana, engineered and imposed by the UK government which led to the PNC and the United Force Coalition in 1964. Through a prolonged period of 28 years of PNC rule underpinned by rigged elections and the virtual collapse of the country’s economy, there is no extensive, critical review of that period in the book.

The chapter is titled Saga of Women’s Struggle and highlights the role played by women in the political development of the country, identifying as the first among the pioneers, founder member of the PPP Janet Jagan, the only woman President the country has ever had, Winifred Gaskin, Jane Phillip-Gay, Patricia Benn, Thelma Reece and Philomena Sahoye-Shury whose combative style earned her the soubriquet Fireball. The chapter is built around six distinct themes – the Burnham years; the symbols of struggle; exceptional women; the heroic figures; workers stage; and revolutionary changes – and identifies some of the standout women under each of those themes.

Foot soldiers but not leaders

A number of these women, including Shirley Edwards, Mitra Devi and Pauline Sukhai, had joined the PPP in their youth but are still around and recognisable by contemporary Guyanese. But by far, the two women most admired by Nagamootoo were Indra Chandrapal, who “along with three of her sisters were hauled away in their nightdresses by the police during the repressive 1973 elections”, and Gail Teixeira who has featured in every government since 1992 following her return from Canada where she had been involved in the anti-apartheid movement and had a close connection to the communist party of that country. Interestingly, Ms. Teixeira is the only person, let alone woman, with any leftwing bent to have featured in the top ten in the recent PPP Congress. Nagamootoo also accords recognition to several women of the Working People’s Alliance who were in the forefront of the resistance to the PNC, including Andaiye, Jocelyn Dow, Karen DeSouza, Bonito Harris-Bone and Vanda Radzik.

The chapter was essentially a reproduction of a feature article Nagamootoo wrote in Thunder, the PPP political organ in 2008 when he was still a leading member of that party. There is nothing to suggest that Nagamootoo’s high regard for the women identified is undiminished, or whether the regard and respect remains mutual to this day. For all the multitude of names of women who featured in the struggle, the book does not address the glass ceiling which has ensured that other than Janet Jagan, no woman from either the PPP or the PNC ever became their party’s leader or the country’s president. Women in Guyana politics might be great foot soldiers but unfit for higher leadership.

PPP’s practice of democracy

There is nothing that makes a political narrative more fascinating than the conspiratorial intrigue and conduct of party functionaries vying to outdo each other. Chapter 21 provides more than its fair share, with accusations of race, class, ambition and selfish commitment featuring prominently. Chapter 21 is titled Return of Authoritarians, describing Nagamootoo’s growing disenchantment with what he claims passed as internal democracy in the PPP after the death of its iconic leader Cheddi Jagan. In what might be considered a confusing conflation of key events from the formation of the PPP government in 1992 and the intrigue in the nomination process for the leadership of the party in subsequent elections, the chapter showcases the dominant role of Indian men over Afro Guyanese and women from the top position of presidential candidate, notwithstanding the generous rewards available for Afro Guyanese crossovers or the success of Kwame McKay over a capable Anil Nandlall in party elections. From his vantage point as an insider, Nagamootoo raises serious doubts about the quality of internal democracy, and the style and content of its governance, which characterised the PPP and which were projected onto the national stage.

The flipside of this, of course is the PPP twin, the People’s National Congress, which has never been led by a woman, or by an Indo Guyanese. This is why the almost all-powerful Dr. Roger Luncheon was considered ideologically suitable as the presidential candidate of the PPP but was disqualified on the grounds of his race (red but black); and why the outstanding Winston Murray could not win a leadership election in the PNC. While race and gender played a role in the PPP, a more compelling disqualification was any tendency to challenge “traditional mechanisms” and the party line. Nagamootoo complains that while he received the second highest number of votes at the party’s Congress in 1998 (behind Janet Jagan), he was “not given” enough votes to get on to the Executive Committee (Exco). That pattern continued in 2008 when popular youth leader Frank Anthony and he, who came in third and fifth respectively in the elections at Congress, could not find place in the smaller but more powerful Exco.

Jagdeo’s elevation and candidacy featured in the chapter with Nagamootoo describing him, with more than a little prescience, as “parroting the neoliberal language and the new capitalist doctrine.” Jagdeo, of course, was elected president in 1999 but suffered a decline in popularity following the reign of violence and terror in Guyana. Nagamootoo cites a poll by Dr. Vishnu Bisram which showed that 54% of PPP supporters preferred him as president compared to 31% for jagdeo and 20% for Ramkarran. a preference supported in an article by Freddie Kissoon in 2004. The chapter concludes by touching on the events leading up to the selection of the presidential candidate for 2011 but skipped critical details, such as the pre-determination of the results of internal voting or the non-accountability of the leadership for the financial operations of the party.

Dirty war

Chapter 22 is titled Racism and Revenge Politics and recounts the attacks Nagamootoo claims he suffered as the target of “a dirty war that had no imagination” waged by the PPP, with the most painful cut that he was a traitor and a neemackram, a Hindi word meaning ungrateful. Moreover, he was accused of improperly removing volumes of the Mirror newspapers to which he had contributed for decades. The chapter highlights his account of his achievements as Minister of Information in the PPP government, including the promotion of an independent media and seeking to introduce better governance, accountability and access to the State-owned media and easier access by Guyanese. The chapter closes with Nagamootoo’s failed efforts to have both presidents Granger and Ali clarify his entitlement to other benefits.

The sixth and final part will appear next week.

Dear Land of Guyana by Moses V. Nagamootoo – Part 4

A book review by Christopher Ram – May 12, 2024

Introduction

Chapter 17 is titled Campaign and Elections and reports on the immediate action required to hold the elections following the ruling by the Caribbean Court of Justice that the no confidence motion (NCM) in December 2018 was properly passed, the Government had fallen, and elections had to be held. The book does not detail the delay tactics by the APNU + AFC Government to stay in office in a clear violation of the constitutional requirement for elections within 90 days of the NCM, or the validity of legislation purportedly passed by the Government thereafter, matters which as a lawyer could not be alien to Mr. Nagamootoo. Yet, he writes about the triumph of Parliamentary democracy.

The tone of the chapter suggests that things were not too right for him. From his own accounting, while he was sidelined, other Ministers became emboldened following the vote. He tells the story that while acting as president, he was summoned to a meeting in the office of Cathy Hughes Vice Chair of the AFC where the Jamaican advisor and architect of the Cummingsburg Accord – with whom he never seemed to have had a cordial relationship – that the Coalition needed “a brand-new slate”.

Popularity and betrayal

Unabashedly, Nagamootoo writes that given his popularity both on the coast and in the hinterland communities, going into the elections without him as the symbolic head of the AFC was a “huge mistake.” He lamented that except for a 20-minute speech at Anna Regina, he was assigned no role in the elections campaign or manifesto preparation, and criticises the Coalition for its failure to reach out sufficiently to Indo-Guyanese communities and for being carried away by a “misplaced display of overconfidence and triumphalism”.

Writing about the betrayal by an AFC MP that led to the fall of the Coalition Government, Nagamootoo expresses surprise at the lack of outrage at the betrayal by an AFC member of Parliament that caused the collapse of the government, even as he claims that he instructed Mr. Khemraj Ramjattan, the AFC leader and Minister of Public Security to put arrangements in place for the security of Persaud as he (Persaud) was leaving the country. Nagamootoo writes in praise of the absence of violence following the confidence vote, drawing a parallel with the violence that erupted following the “installation” of Janet Jagan after the 1997 elections.

He writes of his confidence of a Coalition victory against the PPP which was going into the elections with its presidential candidate Irfaan Ali  who was facing several allegations of sleaze  while he held office as a minister and claims about the genuineness of his academic qualifications. According to Nagamootoo, Ali had barely survived a bruising internal party campaign against his popular contenders, among whom were Dr. Frank Anthony, Anil Nandlall and Dr. Vindya Persaud. The book notes however, the emphasis of the PPP/C on the number 50,000 – in new jobs, new house lots, new homes, new scholarships, stipend for trainee teachers, and for cash grants for every school child.

Foreign interference and the order to vacate office

He writes too that expert foreign hands experts were directing the PPP campaign – naming Mercury and Cambridge Analytica – and engaging in PR stunts like the preparation of props and footage for propaganda spins. He accused the PPP/C, with more than a hint of irony , or prescience, of spreading the news that the Coalition would rig the elections.

About the elections themselves, he writes about the rigging to facilitate the PPP‘s return to office as being well planned and executed. He mentions specifically the “interference by Mercury, and by high-ranking US officials,” the bloated electors list, and the nasty threats of sanctions from US Secretary of State Mike Pompeo – a “fatal form of American bullying and interference.” He does, however, acknowledge that while it was a Guyana tragedy for democracy, part of the blame for failure had to be placed at the feet of the Coalition, including some levels of distrust among key partners.

That theme continues in chapter 18 with Nagamootoo claiming that Pompeo “ordered us to vacate office, and threatened consequences”. That is the clearest account yet of the purpose of Pompeo’s role and visit to Guyana around the 2020 elections. The book suggests that Pompeo totally ignored the Recount processes and legal challenges before the courts.

Continuing, Nagamootoo writes that the process was railroaded and that it did not take long for the carpetbaggers to cash in on their promissory notes, including the AFC defector Charrandass Persaud being rewarded with a diplomatic posting and his “godfather” Peter Ramsaroop being named Director of Go-Invest. The chapter also addresses a bombshell announcement the Taiwan had opened a trade office in Guyana “a pre-planned move” that was applauded by U.S. ambassador Sarah Ann Lynch. The decision was reversed following a call by President Xi of China to the Guyana President and a statement that the announcement was a “result of a miscommunication of the agreement signed,” and that the agreement had since been terminated.

Back to the beginning

Chapter 19 is titled Back to the Beginning, in which Moses writes about drawing inspiration from Christian idealism of serving the poor and joining the PPP and its youth movement in October 1964. He reports that he became a voracious reader of Marxist texts and anti-communist literature from Christian movements and engaged in endless discussion on ideology. He writes of a love-hate relationship with Janet Jagan, a founder member of the PPP and the editor of the Mirror newspaper, accusing her of the “hidden hand that manipulated [his] life” and using one of her “hatchet-men” Clement Rohee, against him.

As he claims, on two occasions, Cheddi Jagan tried to dissuade him from pursuing further studies, succeeding on the first occasion (UG) but not the second (Law School). Referring to some of the rightwing/ left wing contradictions within the PPP, he recalls Dr. Fenton Ramsahoye as consoling the right wing Balramsingh Rai by observing that “the party works in devious ways, comrade.”

Writing about the 1998 Party elections in which he came second to Janet Jagan, he describes how ballots were managed and how his request to observe the count was quickly rejected. His narration of his experiences in the post-1964 PPP – including medical examinations at a Black Sea sanitorium in the USSR – makes fascinating reading, 

To be continued

Dear Land of Guyana by Moses V. Nagamootoo – Part 3

A book review by Christopher Ram – May 5, 2024

Introduction

This third part of Dear Land of Guyana, anautobiographical account by Moses V. Nagamootoo,  Prime Minister of Guyana from 2015-2020, covers chapters 7 to 16. Chapter 7 begins with the tabling of a motion of a no confidence motion against the minority PPP government, moved by the AFC which had seven seats in the National Assembly. Nagamootoo does not claim a joint action, but only that the AFC counted on the support of the APNU’s 26 seats. According to him, the action was taken when corruption became pervasive in Guyana. Instead of facing the charges in the National Assembly, President Ramotar’s response was the prorogation of parliament, after his approach to opposition leader David Granger to back off from the no confidence motion was rebuffed.

Chapter 8 relates the country’s history of searching for a Pro-democracy Alliance beginning in the mid-1970s and developing steam when the opposition parties came together in the preparation for the 1992 elections. The writer also gives a background to engagements between the PPP and the WPA which had earlier entered the anti-dictatorship struggle. According to the book, a sticking point in that effort was the WPA’s refusal to back an Indian candidate, especially Cheddi Jagan. The search for a consensus candidate continued with other names like Dr. Roger Luncheon, Ashton Chase and Bishop Randolph George.

The Cummingsburg Accord

An account is given of the events leading up to the PPP adding a civic component to its name, even while private talks with the PNC continued. The author claims that even after the assassination of WPA leader Walter Rodney in 1980, he favored continuing those talks while Dr. Jagan was opposed. The rest of the chapter addresses the debates and discussions within the AFC on an alliance with the APNU and overcoming the fears that such an alliance would render the AFC “dead meat.”  Nagamootoo placed himself among the AFC fighters countering the PPP’s “propaganda” that any pro-democratic alliance would be bad for Guyana. After protracted inter-party talks not only on a national programme, but mundane matters like which party would secure the position of presidential candidate, and equal sharing of cabinet positions, the AFC and the APNU on a4 February 2015 signed the Cummingsburg Accord, an exercise spearheaded by a Jamaican consultant.

The broad plans for the Coalition included constitutional reforms that could accommodate the broadest possible unity of competing and otherwise antagonistic political entities, zero tolerance for corruption, transparency, accountability, and probity at all levels. The response by the PPP/C was “nasty and brutal” propaganda: the AFC was selling out to the Africans; finding derogatory names for perceived sympathisers like Yesu Persaud, Robert Badal, Anand Goolsarran and Christopher Ram.

Nagamootoo himself does not hesitate to trade his own barbs, identifying Peter Ramsaroop, Kit Nascimento (former UF propaganda czar), Mansoor Nadir, Nanda Gopaul (Jagan’s effigy burner) and Dr. Leslie Ramsammy who had vowed to run “the communist Jagan” out. Also mentioned for their association with the PPP/C in quite unflattering terms were Khemraj Lall, Sonny Ramdeo, Fip Motilall and specialty hospital promoter Surendra.

Instant sell

Chapter 10 describes the reception leading up to the elections on 11 May 2015, the instant sell of the Granger/Nagamootoo combination and his first meeting with Granger when they were both in short pants. Describing Granger’s Speech at the launching of the Alliance as “nothing short of visionary,” Nagamootoo wrote that the reception at the Launch convinced him that the Coalition’s victory on May 11th “was assured”. In what was seen as an alignment of the stars, Dr. Joey Jagan and Ms. Ulele Burnham also appeared on the Coalition platform. The chapter also reproduced a letter from Joey Jagan on the day before the elections setting out his reasons for supporting the Coalition. The book also talks about incidents like the killing of Courtney Crum-Ewing and another Fazal Azeez, both in a narrative that suggested political involvement.

Three days after the vote on 11 May 2015, the Alliance was declared the winners with 50.30% of the votes and gaining a one seat majority while the PPP/C obtained thirty-two seats and challenged the results.

Chapter 12 recounted the events from the swearing in on 16 May 2015, for the first time at the Parliament Buildings. The Government was made up of sixteen Cabinet ministers and nine junior ministers, huge for a country with a population of less than three-quarter million. Those numbers of course were partly driven by the Cumminsburg Accord. Signaling his first discomfort with Granger, Nagamootoo described an early speech by Granger in which he referred to the murders in the sixties. According to him, Granger’s better self was telling him to let go, but “he didn’t, he couldn’t.” The writer also uses the chapter to explain the delegation to him of the chairmanship of Cabinet’s Business Session, the powerful Cabinet Business Sub-committee and of the Parliamentary Agenda Sub-committee.

Chapters 13 and 14 begin with the statement that the Coalition served a full five years in government during 2015 to 2020. That was only because of a spurious protracted challenge to the No Confidence Motion brought by the PPP/C and supported by an AFC MP. Nagamootoo deals with the huge increase which Cabinet voted itself on the one hand and the achievements it made on the other. They also described the activities and challenges of Government confronted by an opposition whose leader when in Government had raised concerns in a statement that “his regime was prepared inexplicably to cede a channel for Venezuela’s access to the Atlantic, and through the pathway of our enormous oil deposits.”

The book narrates the challenges of power supply and the crisis in the sugar industry, described at some length in chapter 15. The Government’s response was the closure of several sugar estates with the intention of privatising parts of the industry. This was hugely controversial, especially with sugar unions. Over 5,000 sugar workers were laid off without timely severance payments. The handling of the sugar industry matter probably accounted for the Coalition’s loss of power in less than a full term. This was a gift to the PPP/C, which had run the industry like an extension of the Party, but which gained immensely from the botched manner in which the Coalition tried to fix the problem.

In Chapter 16, Nagamootoo recounts the fall on the Coalition, which he saw as a “tit for tat response to his no confidence motion in 2015 and a bitter vendetta for his resignation from the PPP”. Readers will also recall that in Part 1 of this review, I had referred to a conspiracy theory that the plan may have been connected with a meeting in India!

In closing chapter 16, Nagamootoo states that despite mistakes on all sides, disagreements and quarrels, the Coalition made credible achievements that could ensure their return to the office for a second term. However, new factors contributed to their defeat and ouster at the elections, including campaign failures, which he claims were self-inflicted, and foreign intervention which was by invitation.

Every Man, Woman and Child in Guyana Must Become Oil-Minded – Column 125 – May 3, 2024

Government should take over Hess’ share

Introduction

The disagreement involving the three Contractors under the 2016 Agreement (Exxon Guyana, Mobil, Hess and CNOOC) and Chevron over the friendly takeover of Hess by Chevron has gone to arbitration in the United States. There is nothing to indicate that the Irfaan Ali Administration has expressed any interest in the matter before the Arbitrators, although it clearly should. Guyana not only has standing and a direct interest in the matter, but a duty to do so. It is too rare an opportunity to pull something back from Trotman’s diabolical act of historical proportions, and we must not let it slip by.

Recent appearances on American television channels CNBC and Bloomberg by Exxon CEO Darren Woods and Chevron CEO Mike Wirth have brought this conflict into the international public eye. Both executives touted their companies’ robust performance in the first quarter of 2024, but Woods’ focus on delivering value to Exxon’s American shareholders while failing to acknowledge the Guyanese people, whose resources are being exploited, has drawn criticism.

The dispute

At the heart of the current dispute is Chevron’s attempt to acquire Hess Corporation, whose Cayman Islands subsidiary has a branch in Guyana which holds a 30% stake in the Stabroek Block. Exxon and CNOOC, themselves branches of shell companies incorporated in low/no tax jurisdictions holding 45 and 25 percent respectively, are claiming that they have preemptive rights over Hess’ shares, as outlined in a secret Joint Operating Agreement (JOA) between them. Woods has publicly accused Chevron of disregarding these rights in its pursuit of Hess.

 For his part, Woods is not only insensitive to the host country Guyana but appears oblivious to the fact that the JOA is subordinate and subject to the Petroleum Agreement signed in very controversial circumstances in 2016 between the Government of Guyana and the three shell companies. Woods boasted about value-creation by Exxon engineers ignoring the fact that the true value lies in the abundant resources and the country’s generosity under arguably the worst petroleum agreement ever – no exaggeration intended. The Agreement itself is governed by the country’s Petroleum Exploration and Production Act and its associated regulations, the essential provisions of which are:

Any transfer of rights, privileges, duties, or obligations under the Agreement or related licenses is subject to prior written consent from the Minister responsible for petroleum.

The Minister is obligated to approve the transfer if it does not adversely affect the performance or obligations, is not contrary to Guyana’s interests, or is to an approved affiliated company.

If the Minister fails to respond within 60 days of receiving the request for transfer, consent is considered to have been granted.

The assignee is bound by all terms and conditions of the agreement or license.

A specific form must be used when applying for an assignment or transfer.

Ignoring Guyana

Neither Woods nor Wirth made any reference to the Guyana legislation or the Agreement. But now that the matter is brought to its attention, it would be interesting to see how Guyana’s government will address the matter on which it has so far been totally silent. The Government should use this opportunity to assert our national interest, a successful outcome of which could have significant benefits for the country’s economy and its ability to benefit from its substantial oil reserves on behalf of the people of Guyana. As managers and  trustees of the people’s patrimony, the Government needs to get off its knees in supplication to the oil colonialists and function as the law states, “that the property of petroleum existing in its natural condition in strata in the national territory is vested in the State.” And in keeping with the government’s overriding duty  to the people of Guyana.

The law and the Agreement vest in the Minister responsible for petroleum a decisive role in the matter. He can refuse approval for the transfer of Hess’ interest to Chevron, which could potentially result in the interest reverting to the Guyanese government. On the grounds that the transfer of Hess’ interest to Chevron is contrary to the interests of Guyana, he could refuse to grant approval.

Woods insists, without proof – other than that Exxon wrote the JOA – that under the JOA, the transfer is subject to the preemptive rights of Exxon and CNOOC. Whether or not Chevron’s acquisition of Hess violates such rights as may exist, once the JOA is found to be inconsistent with the Petroleum Agreement and with Guyanese laws, the Minister has sufficient grounds to refuse approval for the transfer. There is a catch. If an application has been made to the Minister, he must respond in sixty days, failing which consent is deemed to have been given. Therefore, if the Minister wishes to refuse approval, he will need to do so within the stipulated time. The question is whether any application has been made to the Minister. It is frightening to contemplate that an application might have already been made and that the Minister has done his usual nothing, then we “caak duck.” 

In the event that the Minister refuses to grant approval and the refusal is found to be in accordance with Guyanese laws and the Petroleum Agreement, Hess’ 30% interest ought to revert to Guyana. It is not without legal significance that each of the three oil companies is a separate contractor, and in any case, a share participation is a capital and not an operating issue. It seems clear that if the Government gives to Hess a licence, it is not Hess’ to pass on to whomsoever it will. It should pass it back to the Government. The Agreement defines “contractor” as the three named companies and their “permitted assignees.” (Emphasis added).

The Government’s starting gambit should be refusal and a statement that it will buy out Hess’ interest, paying for it out of future profit oil. It is not inconceivable that Exxon and CNOOC would be presumptuous enough to tell the Government of a sovereign state that it cannot take a stake in its own resources. Exxon is known to walk over developing countries.

Sadly, relevant as they are, the real issue is not about Exxon, CNOOC or Hess/Chevron but whether the Government has the courage, the rectitude and the independence to show the oil companies that at the end of the day, the resources belong to Guyana and its Government will not allow itself to be excluded or pushed around. Not that this is going to be easy, and we all know about the litigious nature and instinct of oil companies. Let us be as prepared to protect and regain something of Guyana’s patrimony.