Introduction\n<\/p>\n\n\n\n
The\nPublic and Government Affairs Advisor of ExxonMobil Ms. Janelle Persaud has\ndisclosed to the press that its subsidiary, Esso Exploration and Production Guyana Limited\n(EEPGL), has applied for its Petroleum Prospecting Licence for the Canje Block to be renewed. The Block was awarded to Mid-Atlantic\nOil and Gas Inc. but it seems that not content with the 26,806 sq. km. awarded\nto it by Raphael Trotman, Exxon has decided to expand even further, showing it\nis, to use an old Guyanese word, \u201cscraven\u201d. \n <\/p>\n\n\n\n
The PGA Advisor seems to lament that\nthe Government has failed to act on the application four months after it was\nlodged on March 4,\n2019. The Advisor must no\ndoubt be aware that Ministerial responsibility for the petroleum now vests in\nthe President in the absence of that portfolio being assigned to anyone else. If\nthe law is being followed, Dr. Mark Bynoe has no statutory role or power in the\nextension of the Prospecting Licence and the relinquishment of blocks. <\/p>\n\n\n\n
Mid-Atlantic is owned by a single\nshareholder Dr. Edris Dookie who holds 5,000 shares in the company with a value\nof $1,000 per share. The Agreement signed in March 2015 stated that the Company\nwould have or would acquire the financial resources, technical and industrial\ncompetence and the experience to carry out Petroleum Operations and would\nprovide an affiliate company guarantee satisfactory to the Minister for the\nperformance and the observance by the company of the conditions of the licence.\nThere is nothing in the public documents to suggest that this condition was\nmet. <\/p>\n\n\n\n
Taxes <\/p>\n\n\n\n
Readers are aware by now that SARA,\nwhose very legality has been the subject of a Court challenge, through the\nhighly conflicted Eric Phillips, of the same SARA, has been conducting an\nadverse investigation into the origin and circumstances of the Mid-Atlantic\nAgreement for over a year now. Even if Phillips could find anything, he would\nhave to encounter the complicit conduct of the APNU+AFC Administration and the\nMinister of Finance who less than one year ago passed an Order through the\nNational Assembly ratifying substantial tax concessions to the Company. Taxes\nspecifically referred to in the Order are the Income Tax Act, the Corporation\nTax Act, the Income Tax (In Aid of Industry) Act and the Property Tax Act. <\/p>\n\n\n\n
Notably, the Finance Minister has no\npower under the Petroleum Act to give special concessions on VAT or directly, the\nCapital Gains Tax Act. However, exemption from Capital Gains arising from an\nextension of the Property Tax Act applies in two cases \u2013 where a person is\nexempted from the Property Tax Act by resolution of the National Assembly, and\nsecond to companies granted exemption under the Income Tax (In Aid of Industry)\nAct for tax holidays. <\/p>\n\n\n\n
Relinquishment <\/p>\n\n\n\n
But let us get back to Ms. Persaud and\nher pronouncement about relinquishment. I fail to see how Exxon can apply for a\nrenewal of a Prospecting Licence to which it is not a party, but more like a\nusurper. We have no idea how it came into the Agreement in the first place and\nwhether it is the ubiquitous Raphael Trotman who would have approved any\nassignment of the Agreement. Trotman and Granger have certainly given a new\nmeaning to Production Sharing Contracts! In fact, Mid-Atlantic is now reported\nto have a negligible 15% remaining in the Canje Block with the French oil\ncompany Total also sharing in the spoils. \n <\/p>\n\n\n\n
Let us look at what the law states in\nrelation to relinquishment under a Petroleum Prospecting Licence and first note\nthat the term means the giving up of blocks by the Contractor under the\nAgreement. Section 24 of the Act dealing with the application for a renewal of\na prospecting licence allows for such a licence to be renewed twice with the\neffect that such a licence may extend up to ten years plus a probationary\nperiod of six months. This ten year period is divided into four years in the\nfirst instance and two three-year extensions. <\/p>\n\n\n\n
Section 24 provides that the number\nof blocks for which renewal is sought must not be more than half of the number\nof blocks for which the licence was granted in the first place. But there is a\ncatch \u2013 this limitation is \u201csubject to any Agreement\u201d. So what does the\nAgreement state? It allows for a minimum relinquishment of 20% which is the\npercentage quoted by Ms. Persaud. <\/p>\n\n\n\n
There is clearly conflict between the\ngenerosity of the Agreement and the logic of the Act with the Act seeking the\nfront-end loading of relinquishment with 50% after four years. The Agreement on\nthe other hand seeks to put the restrictions towards the backend. But why would\nthe Government allow only a 20% relinquishment of there is little work and\nnegligible expenditure during the initial period which appears to be the case\nhere. That sound to me suspiciously like hoarding. <\/p>\n\n\n\n
Next week: The Column\nwill look at the financial statements of the company Mid-Atlantic for the year\n2018 to see what expenditure, if any ExxonMobil or Mid-Atlantic has made under\nthis Petroleum Agreement to justify such hoarding. <\/em><\/p>\n","protected":false},"excerpt":{"rendered":" Introduction The Public and Government Affairs Advisor of ExxonMobil Ms. Janelle Persaud has disclosed to the press that its subsidiary, Esso Exploration and Production Guyana Limited (EEPGL), has applied for its Petroleum Prospecting Licence for the Canje Block to be renewed. The Block was awarded to Mid-Atlantic Oil and Gas Inc. but it seems that … <\/p>\n