ALL HANDS ON OIL

Gyana,oil, Exxon, Hess,CNOOC China, Lisa , Stabroek

When the International Financial News Organs mention the Liza 1 and 2 and the Stabroek oil wells found in the waters of its off-shore, it’s always with Guyana as the subtext.

Just look at the swagger in these headlines of Forbes Financial Magazine, June 30th 2016, in article by Christopher Helman “With Second Big Oil Discovery, Exxon Puts Guyana On The Map”…yeah, putting Guyana on the map…as Economist Magazine  ‘Gusher in Guyana’, article of June 29th 2017 tops it off with sub heading ‘It will take better politicians to resist the corrosive power of petrodollars’

Just for the record….if there is any noble propensity here, it is certainly tempered by a reputation of avarice and narcissism and this is what makes these magnates mount their horses of hubris and ride in to town…not because they are overtaken by any zealous munificence and definitely not because they want to make  Guyana its benefactor… only because they are driven to multiply their riches by oil.

First off, their mental image of the leader of Guyana -of any third world country for that matter- comes pre-packaged. For them he’s a meretricious caricature of leadership, achieves spectacularly little, an unrepentant dictator who constantly revises the laws to ensure longevity of rule – as he sips quality champagne from a diamond glass on the tax payer’s dollar…maybe on a private 747 – just to add to the visual.

There’s a famous recount of what happened when Esso Chad, a consortium led by Exxon Mobil, brought business to the little African country and paid USD 4 million to farmers whose lands were spoiled for farming and $1,000 USD for every mango tree cut down to facilitate oil extraction. The choices made by the farmers on spending their new found wealth grew into a common joke and became the prevailing anecdote for the oil magnates when discussing contract compensation.

Reportedly, in their unworldly joy, they spent their money only as they knew how. One took a bath in beer, another left his mud hut and checked in to a four star hotel in Ndjamena for several weeks, others took several more wives. Some did invest in wind mills and more cattle but the focus was on those who did the less enterprising things.

And, in this presumed unsophistication of the third world leader, capitalist buccaneers like Exxon find justification in exploiting their simplicity – a charge copiously documented in Exxon’s multiple Court Cases, legal defenses and its numerous charges and settlements with third world countries.

These modern day marauders never really stumble upon oil, you know.

When they show up, they’ve already done their home work…analyzed the politics of the country, identified the venal politicians, the philistine business men and developed the right kind of palm oil –for those whose palms would be greased.

The Integrity Forum calls it the ‘Voracity Effect’ but it’s really just public officials at their dishonest best.

Thing is, there was a thriving culture of local corruption, when Exxon first sought its exploration in Guyana’s waters. That first contract, covering the Stabroek Block,  was signed on or around June 14th 1999 by Janet Jagan with the appendage of Her Excellency and President –titles that will not be validated in this forum, since their legitimacy remain under question.

Nevertheless, Janet signed that exploration contract during the tenure of a dictatorship that did business with foreign governments and conglomerates through murky agreements, creative accounting;  much of which landed the country on world Corruption Indices and remain the subjects of internal forensic audits- audits we hope to see completed before the next national elections.  She was a pliable subject, undoubtedly and fit the profile of many that resource extractors do business with.

It may be coincidence that resource rich third world countries have this type of politics but it’s incontrovertible that big oil finds a great deal of its holdings in these countries and remains the number one culprit cited when there are discussions involving  the paradox of plenty, in these poverty stricken zones.

We were motivated, primarily, by the need to keep an eye on the nation’s patrimony; much of which has been pawned for returns that cannot be shown, by clear accounting, to have benefited Guyanese other than those who served under the PPP dictatorship… recalling the generous $115 million paid by Norway as disincentive to preserve the rain forest which was then sold by the Jagdeo Government to Bai Shan Lin, Vaitarna, Barama in a cross-selling, bid-rigging, price-gouging racket, then covered up in a crafty accounting scheme by, then, Finance Minister, Ashni Singh and signed off by Gitanjali Singh the Director of the Audit Office (Auditor General) who was none other than his wife.

But we were propelled by the involvement of Exxon, this business magnate, steeped in a series of investigations, an unscrupulous chaser of natural resources and market share through investment in resource extraction from small underdeveloped nations.

These are some of Exxon’s not so illustrious deeds:

  • In 2000, the construction of the USD 4.2 billion Chad-Cameroon pipe line with the promise of 35,000 local jobs …only that it was grossly inflated and deliberately exaggerated …many of the jobs were for bush cutters which lasted no more than 2 days at $6.50 per day and for those with a few more skills, jobs lasted just about three weeks…while  Exxon flooded the job site with its imported western laborers.
  • The promise to the Chadians and Cameroonians to bypass wild life and fishing the mainstay of locals; of improved education and the installation of electricity – leaving instead, half constructed homes, non functional parks, and abandoned fish ponds and electricity projects.
  • In 2003, its $ 500 million bribe paid directly into the private account of Teodoro Obiang Nguema Mbasogo, the President of Equatorial Guinea, for concessions to the nation’s oil.

Hess is no better. We read the exposé of Hess oil and its link to the Russian mob through Rosnef, -Russia’s oil- and its culture of bribery, more notably to Latin American countries and to African countries through trading name, Amerada Hess.

The Chinese Government’s CNOOC has had its share of bribe, scandals and litigation as far away as Iraq and as close to home as the Caribbean.

And Halliburton, the latest natural resource pariah to join this school of sharks, comes with decades of investment misbehavior, creative accounting that overstates its investment in collusion with corrupt leaders and uses that overstated amount to grease the palms of sleazy government officials.

So, when we learnt of the Coalition’s reticence to declare the details of the oil extraction contract, with Minister Trotman declaring that his government had decided that “it wasn’t in national interest to discuss contract details at this time”, that “they didn’t want to expose all their business to the world”, we thought of the salt-goods shop mentality of the previous government and remembered how these same officials, these upper echelon Coalition members, lambasted the PPP Government from the podium of the Opposition for withholding information on contracts with the Chinese de-foresters – information that would have served the nation better, were it known before they were scammed by them.

And don’t get us wrong.

We see Jagdeo’s demand for ‘full disclosure’ as political impiety, as the hallmark of hypocrisy, as barefaced duplicity and dismiss it as lamentation, distraction, by an insidious loser who is dying to know if contract negotiations are as nefarious as his were – overflowing with personal perks, coordinated with corruption, governed by grifting and grand larceny – and as a pitiful Pavlovian response at the thought of missed undue enrichment that is coming out as cries of foul.

What Trotman said may have sound basis but it was delivered in unprofessional political parlance. The grand take away is that this Coalition is engaging in the same covert behavior that it decried when it was in the Opposition…a takeaway that could have been avoided at the Communications/Public Relations level.

The fact is, Guyana’s natural resources and government –owned service delivery systems are the property of the people; even if there was massive misappropriation of millions of dollars for the failed Amalia Falls project, quiet gifting of land along the country’s defunct train lines, the siphoning of funds and unconscionable compensation for the unqualified engineers in the fiber optic debacle.

Guyanese have a right to know what is being done with their property, as well as, the prerogative to reject the advancement of any argument that suggests a waiting period, before they are told what is being negotiated on their behalf.

There’s a growing disquiet amongst the electorate.

They are now beyond jaded.

Many went to the polls as swing voters, identifying political matters with a transcendent moralism, casting their votes more for moral order than the traditional political ideology and ethnicity. They were tired of being marginalized by a government that flagrantly stole from them, that offered no hope to the generations after them.

The swing vote mattered.

This is political capital that cannot be squandered.

Behind the strategic and tactical problems- not to emphasize the frequent humiliations – things are not coming out right from the Coalition. It’s time for it to sense the limits of its actions, as voter reaction confirms a constantly diminishing yardage of these limits.

People are aware of the discovery of the humongous reserves; know that the harvesting of oil will bring in billions of dollars. Why not give them a sense of how this thing works, an idea of how the contracts are being negotiated?

It is the petroleum contracts that detail the flow of money; that will tell them if Exxon, an investor renowned for rapacious behavior, is not going to hog the revenue from the two blocks…Stabroek and Lisa. There is growing trepidation that Exxon owns 45% of the stake, Hess owns 30% and the Chinese via CNOOC owns 25%.  To them that’s 100% of ‘outside’ ownership.

So, tell the people how this thing works, what ownership really means, in this case. Explain the general parts of the agreement. Let them know, first of all, that the contract will be between the government on behalf of the people of Guyana and oil companies. Explain that the typical petroleum contract may have hundreds of subsidiaries to it. Assure them that the contract conforms to the dictates of the Constitution and that the land still belongs to Guyana. Reassure them that there is built- in environmental protection, biodiversity protection and land conservation – violations of which comprise parts of Exxon’s rap sheet.

Let them know that it is a Production Sharing Contract, that it includes the finding of diesel, butane and petrol as well…that they will all be represented as petroleum in their contract with extractors, that the oil companies will bear the upfront financial burden, pay off their investment expenses, then split the remainder, giving Guyana 50% of those proceeds.

We get that these contracts can be complex, providing for the politics of both government and corporate practices but there is an abundance of empirical evidence that attests to a greater frequency than not of kick backs and payoffs, when transactions are executed in virtual secrecy.

So, answering questions along the way can’t hurt. Moreover, it offers an opportunity for government to let citizens know that it has enlisted the help of proven professionals and the elements of the contract are being discussed on equal footing with these oil magnates …who have designed these contracts… and mostly for their advantage.

The fact is, people are suspicious of outsourcing, engaging foreign countries and conglomerates, offering Guyana’s resources for development because they did not see any benefits or feel the effects of any inflow of revenue, when this happened during the past Administration.

In acceding to power, along with the reins of government, the Coalition inherited a presumption of lawlessness; the image of a government with a Potemkin feel, driven by propaganda and bogus activity, where under qualified and even less suitable staff showed up for work and executed a partisan ideology – much of which steered national gains into individual pockets.

The general sentiment is that elected officials are all corrupt, compromised by the culture of bribe.

And, who can blame them.

Power remains too heavily concentrated in the executive, and, without a robust Judiciary created through long awaited Constitution Reform, the electorate will remain leery of political actions, feeling that there is no real oversight.

This is an opportunity for the Coalition to show that they have chosen the competent ahead of the compromised and that it will go for the upstanding, even if inexperienced.

So stop hemming and hawing…

A refusal to issue contract details, updating upon dramatically changing events, will only cause the Coalition Government to suffer from the twin afflictions of opaque dealings and pernicious intent…not unlike its most recent predecessor.

This new charge for Guyana’s natural resources by these oil titans could become another story of corporate entitlement and government misdeeds or an unprecedented opportunity for economic development.

Oil escalates to a poor country’s most powerful industry – when bad economic planning allows it to subvert other industries …whole other conversation– and is too often allowed to become a parallel government…employing kick back mechanisms and gift envelopes to local officials, to get its way.

We’re not saying that this will happen in Guyana but Exxon, Hess, Halliburton and China’s CNOOC are quite dexterous in these activities and have stood across from various Prosecutors in defense of these activities enough times to be considered pros.

What we are saying is that President Granger, in his eloquent and impressive address to the The Committee on Economic, Social and Cultural Rights (CESCR) at the United Nations on September 28th 2015, spoke of the prodigious potential of the oil find and said that his government’s plans were to ensure that oil revenues reached future generations of Guyana…that efforts to establish a Sovereign Wealth Fund – a state-owned fund established for the benefit of the people, now and future – are well underway.

This lines up with the Coalition’s Manifesto under Natural Resources and the Environment #3: The Fair and Equitable Sharing of benefits arising from commercial utilization of natural resources….

We like the idea of there not being an extractor elite…like there was when logs were being felled by foreigners in our forests.

The promise now is for democratic accountability….

We’re hanging on to that, during this current scramble for the country’s resources…..because the foreign companies that come to the country to make profits never generate wealth for Guyanese….

So far, we’ve only been ripped off.

 

 

 

Leave a Reply