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Trotman refused to correct PPP’s errors with ExxonMobil contract –Ram
Chartered Accountant, Chris Ram
His behaviour makes one question whether he truthfully advised Cabinet about the ramifications of his actions.
Chartered Accountant, Christopher Ram, believes that Minister of Natural Resources, Raphael Trotman, has missed a most significant opportunity to correct some obvious errors made by the PPP/C regime as it relates to ExxonMobil’s contract with Guyana.
He made this criticism in his recent writings which can be found on his blog; www.chrisram.net.com.
The Attorney at Law said that Trotman’s behaviour makes one question whether he truthfully advised Cabinet about the ramifications of his actions.
To understand Trotman’s actions and the magnitude of it, Ram said that some background information regarding the timelines of ExxonMobil’s contract is vital.
EXCESSIVE OIL BLOCKS
The anti-corruption advocate noted that on June 14, 1999, a Petroleum Agreement and Prospecting Licence was signed by former President Janet Jagan for approximately 600 blocks for ExxonMobil.
According to Guyana’s laws, oil companies should only be given 60 blocks. If the company receives more than this, then it would be only under special circumstances. Ram, however notes that it would be extremely difficult to justify giving a company 10 times the number stipulated in the law.
He notes, too, that those who agreed to this decision should be made to explain same.
RELINQUISHMENT CLAUSE
In October 2008, Ram notes, there was an Addendum and Extension Deed to the Petroleum Prospecting License for ExxonMobil. This adjustment to the License modified the Contract Area, the relinquishment obligation, and the initial period of the agreement.
Ram explained, “The law requires that any extension (to such an agreement) be accompanied by a reduction of 50% of the remaining blocks still covered by a Prospecting Licence, so that at the first extension, 300 blocks should have been given up. One can only speculate that the modification in 2008 was to provide that such relinquishment would not apply.”
TROTMAN’S MISSED OPPORTUNITY
Ram said that the Natural Resources Minister missed a significant opportunity to correct the aforementioned errors when he renewed the contract for the company last year.
In fact, the Official Gazette of August 2, 2016, reveals that the new agreement was signed between Guyana and Exxon and its Joint Venture partners on 27 June 2016. That document has not been released to the public or the National Assembly.
Be that as it may, the Chartered Accountant stressed that the Contract Area in which the company operates offshore and the relinquishment obligation were modified by the PPP/C and are serious matters which Trotman had an excellent opportunity to address, if not redress.
“Instead, Trotman by his inexplicable and apparently uninformed, if not reckless action, in signing a new Agreement, effectively waived Guyana’s rights to correct some obvious errors by the PPP/C Government…
Did the lawyer in Mr. Trotman not tell him that, if all he did was renegotiate the rate of royalty Guyana will receive, all he had to do was sign an Addendum to the 1999 Agreement as the PPP/C did in relation to their Prospecting Licence?”
Ram said that it would be practically impossible to correct any conceptual errors at this stage, both on legal and practical grounds. He said this means that Guyanese now and later, will have to live with the consequences of Mr. Trotman’s actions for the 30 year span of ExxonMobil’s production licence.
Significantly too, the Chartered Accountant said that Trotman, in wasting such a golden opportunity to correct the mistakes of the PPP, has also given ExxonMobil a monopoly on petroleum in Guyana for the next 30 years.
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