GUYANA POROUS OIL CONTRACT

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Now that we’re hearing more about old pharmaceutical deals, Party Chairmanships and  less about oil, oil contracts and the flow of anticipated revenues to the masses, we must keep in mind that the contracts with the oil extractors are still in place and that speculative drilling continues uninterrupted amidst these diversions.

We cannot afford to be distracted.

Questions remain unanswered…and they lie outside of the headlines of job training and job potential, in anticipation of oil.

That’s smoke.

Answer the real questions.

What’s being done to improve the existing flimsy contract when there is still opportunity, who are the experts, what laws are being put in place to divorce politics from the control of oil revenues if/when governments change hands? Is it wrong to share information on any form of progress with the public? Why the silence while the government receives millions ahead of a full throttle oil extraction?

We know that Raphael Trotman said that his government was examining various models of a National Oil Company to manage Guyana’s take from oil revenues. We know also – from reading of the demise several oil-producing African countries– that a national oil company is not insulated from politics or politicians with siphons for government revenues to their personal banks….coining the moniker resource curse.

We know that the last known expert in this field, Dr. Jan Mangal, specifically decried the National Oil Company concept and so offended Government Ministers that they came out en masse to say that he spoke not for the government….which leaves hanging in the air, the question, why – if he was the expert and that his references to the collapse of good governance and oil revenues under the National Oil Company model extend beyond the Caribbean countries he referenced; well into multiple African nations.

We know that Finance Minister Jordan has committed to presenting draft legislation on a sovereign wealth fund to be given to Parliament by December 2018 but on what framework ? We remember his infamous declaration, “Matters not if Guyana secured a good or bad deal, we got a deal…time to move on” …which makes many of us nervous if this guy, of cavalier financial sentiment, will be manipulating the purse strings with its burgeoning oil revenues.

We still recall the exchange between Christopher Ram and Joanna Homer, the Ministry of Natural Resources expert, when Ram cited the ‘perfidious  section 51 of the Petroleum Exploration and Production Act and asked ..is there any plan to repeal Section 51 which grants almost blanket tax exemption, this includes income tax, corporation tax, property tax and capital gains tax… asked again about  ‘strangulation’ Stability Clause  which states that no new law will apply to the existing agreements?

And we remember expert Homer’s response …. no one on the panel who could respond to him on the intention of legislative reform as far as Section 51 is concerned…. that she was only wearing her hat as a facilitator at the meeting….which sort of gave heft to the overlay of inexpertise and politics Mangal had alluded to when he advised against a National Oil Company.

It’s not that there aren’t Guyanese experts … I mean real experts, not those just wearing hats playing experts on panels…to assist this Coalition government in reworking the contracts signed by Janet in 1999….perpetuated by Bharat signing in 2008 to extend through 2018 and Donald rubber stamping in 2013.

These were not contracts negotiated in the true faith of giving ALL Guyanese benefit of their patrimony. When Janet signed –  and she did on behalf of all Guyanese – a national announcement was never made so it can be argued that, like every other contract they signed involving the nation’s natural resources, it had a huge siphon attached to it – one that went directly to their banks – since no meaningful realization of investment in natural resources – logging, rainforest preservation, bauxite mining, gold mining, can be seen – except for the acquisition of wealth by PPP members, their housing developments and other forms of affluence that remain inexplicable on their government salaries. This conclusion can easily be bolstered by the country’s listing on international poverty indices and its unemployment rate especially amongst a specific sector.

But back to oil…because there is yet to be re-assurance that the Coalition will do any better.

Exxon Mobil has drilled eight gushing discovery wells offshore… with a $20 billion potential in oil revenue annually by the end of the next decade. There is no known and NEUTRAL expert advising on the channeling of revenues. There’s no sharing with the public on whether contracts will be revised…during this existing period of opportunity…to give Guyana a consistent revenue stream and an expropriation commitment from the drillers to reinvest a percentage of their take if return on their investment hits a certain percentage.

If history is a veritable compass, countries that stumble upon resources are doomed to losing their benefits as upsurge in revenues tend to blend seamlessly with corruption; which is an ailment of fluttering political institutions.

And we’re not going to defend the use of the word corruption… not when there is a lot of hiccupping coming from the people who pledged full-throated declaration in the interest of transparency. Government officials have no experience regulating an oil industry and the words of Finance Minister Jordan confirm that their expertise in negotiating with international companies is abject confirmation of this.

Those are the facts.

We’ve seen what happens when money and power are in the hands of the state. Twenty three years of the PPP regime and the decimation of social survival of those out of its orbit will stand as a Maginot line of sorts, the history we should never repeat.

And, frighteningly, there are hints of strong men and strong arming coming from this government which ran on anti corruption- which should not be truncated at money laundering. The Coalition’s duty right now is to prepare a tamper -free contract oil administration entity which will survive current and proceeding governments.

Already contracts of all sorts are being sought …and some say received…in anticipation of oil. Apparently, the grease is reaching from below to unscrupulous government-affiliated play – makers with dry palms who are embracing opportunistic parasites of like morals…is the thinking.

We  won’t stand idly by.

With approximately $20 billion in oil revenue annually, we are duty bound to ensure that that revenue lifts the bounty of every Guyanese and will keep close watch on the course of contracts and negotiations.

So, President Granger and the Coalition government will be held to their Manifesto declaration under Natural Resources Development and the environment Mineral Resources Sector and its opening paragraph “The PPP and the Geology and Mines Commission have carried out a mining policy that is riddled with corruption….” 

We will continue to monitor and draw parallels when necessary.

1 COMMENT

  1. I have written extensively on this issue, in another context. Now I reiterate here, that contracts which have been negotiated in good faith, and signed without due pressure by any of the signatories to said contract, remain sacrosanct. In these issues, in the majority of cases, one party comes out with a better deal than the other. The art of the deal is to come out of negotiations having bettered the opponent. These matters are not a matter of fairness, it is two parties using their wiles and knowledge to gain a distinct advantage.
    Now Guyana has been bettered by people who do these things for a living, for many years past, and unless we have brought experts on board to advise us, we have been royally screwed, and if we continue in this vein, we will be bettered by those with whom we need to negotiate in future. Investors in our country are not intimated by speaking with our President and a phalanx of advisors, civil servants for the most part, who have no skil, lno expertise in dealing with such matters. They will sit down listen politely, bamboozle us with scientific and legal bullshit, and smilingly turn the screw on us. That is the name of the game.

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