SUNDAY SPECIAL

Feb 11, 2018 News

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SUNDAY SPECIAL
Minister must give ExxonMobil seven days notice before visiting operations – Oil Contract
Even though USA oil giant ExxonMobil is gearing to produce Guyana’s oil by 2020, and a binding contract is in place, it still doesn’t mean that Natural Resources Minister, Raphael Trotman, can visit the entity’s operations whenever he pleases.
According to the Production Sharing Agreement (PSA) that he and his Government signed, Trotman must give ExxonMobil seven days notice before his visit. He is also expected to carry out such a visit at his own expense.
This is enshrined in Article 9 of the contract which speaks to records, reports and information.
Article 9 (e) states: The Minister, through duly appointed representatives, upon providing the contractor with at least seven days notice, shall be entitled to observe the petroleum operations conducted by the contractor at his sole cost and expense and at all reasonable times to inspect all assets, records and data kept by the Contractor relating to such petroleum operations. In the exercise of such rights under this paragraph, the Minister shall not unduly interfere with the Contractor’s petroleum operations under this agreement.”
Trotman recently came in for criticisms from several quarters for having signed on to an agreement containing such a clause. Political commentator, Ramon Gaskin recently noted that he finds this cause particularly troubling.
He noted, “Generally in this country, if the tax man wants to visit your place, he visits when he is ready. It is therefore beyond comprehension why Guyana’s minister would have to give notice to an operator that is bringing up oil and gas that belongs to the state.”
Gaskin also highlighted other flaws within the contract. He was quick to point out that the APNU+AFC Government had a golden opportunity to correct a grave wrong that was committed by the PPP Administration in 1999.
During the PPP’s time, ExxonMobil was given 600 blocks. This is ten times more than what the law stipulates. The nation’s rules and regulations also specify that at every request for a renewal, the company is expected to relinquish half of the oil blocks it started with. But the PPP made an adjustment to the contract, thereby allowing the company to hold on to the 600 oil blocks.
In the new agreement that was signed last year under the Granger Administration with ExxonMobil, Natural Resources Minister, Raphael Trotman failed to address or redress the aforementioned problem.
Gaskin is also of the opinion that the Government in missing such an opportunity has allowed ExxonMobil and its affiliates to have control of some of the main oil producing blocks offshore Guyana.

MONDAY
Bandit guns down money changer
– victim shot in head during struggle with robber
A gunman in a red hooded sweater shot money changer Shawn Nurse dead at around 10.00 hrs Sunday in front of shocked friends and passersby in the popular business area called America Street.
Nurse, known as ‘Fabulous,’ of Apartment 33 Shopping Plaza, South Ruimveldt, Georgetown, was shot in the left side of the face during a struggle with the gunman, who was attempting to relieve him of a large sum of foreign and local currency.
The father of three died at the scene, while his killer fled with an undisclosed sum of cash and a quantity of gold jewellery.
Police have reportedly identified Nurse’s killer, but were still to apprehend him up to late Sunday.
An eyewitness said he and Nurse were sitting at the corner of America Street and Avenue of Republic where the victim would normally ply his trade.
He and Nurse were conversing, but the friend then got up to get something to eat.
“When I was returning with the food I saw a young man approach him from the northern direction and before I reach closer to him I saw him and the youth scuffling after he (the gunman) was trying to pull the money from his (Nurse’s) hand. After about a minute I see the youth pull out a gun from his waist and shoot him and run down the street.”
An uncle of the slain moneychanger said that he was conducting business not far from where his nephew was shot. The uncle said at the time of the shooting he was conversing on the telephone with a friend when he heard his nephew call out for him.

Trotman stripped GRA of statutory duty to examine imports
– Chris Ram
Minister of Natural Resources, Raphael Trotman has effectively stripped the Commissioner General of the Guyana Revenue Authority (GRA) of his lawful duty to examine imports and to take action as he considers necessary.
This is what Attorney at Law Christopher Ram has noted based on his examination of the Production Sharing Agreement (PSA) that Trotman signed, on government’s behalf, with ExxonMobil.
Ram said that the importation provisions of the 2016 agreement are drastically different from those of the 1999 agreement that was signed by former President the late Janet Jagan.
According to Ram, all of the changes are in favour of ExxonMobil.
Ram said that “Article 21 dealing with Import duties has been drastically revised and is clearly a touchy issue, having prompted advertisements and statements by Esso Exploration and Production Guyana Limited, and the Government of Guyana defending the most generous provisions available anywhere in the world.”
The attorney said that in the 1999 Agreement, Esso, its affiliated companies and subcontractors engaged in petroleum operations were permitted to import, free of duty or other taxes or imposts, “machinery, equipment, vehicles, materials, supplies, consumable items (other than foodstuffs or alcoholic beverages or fuel), and movable property, where imports in any of the said categories have been certified by the Chief Inspector designated as such under section 3 of the Act to be for use solely in carrying out petroleum operations.”
Ram added that this has now been changed in the 2016 agreement, extending to “drillships, platforms, vessels, geophysical tools, communications equipment, explosives, radioactive sources, oilfield supplies and lubricants, as well as all items listed on Annex D” of the PSA.

No insurance provision in Oil Contract for destruction of fishing grounds
– nothing also for impact on coastal communities, neighbouring countries
There are many examples around the world where the governments ensure that oil companies provide insurance which would ensure compensation for any impact on communities and neighbouring countries due to the said operations. Unfortunately, Guyana is not one of those nations.
In the Production Sharing Agreement (PSA) signed between the Government of Guyana and USA oil giant, ExxonMobil, there is no provision regarding any adverse impact on fishing grounds and coastal communities or on neighbouring countries.
This alarming observation was recently pointed out by Chartered Accountant, Chris Ram and political commentator, Ramon Gaskin.
Ram in his recent writings noted that Article 20.2 of Guyana’s 2016 Oil Agreement deals with Insurance in respect of, but not limited to assets, pollution, third parties and employees. The Attorney-at-Law pointed out that the Agreement does not require any loss of production insurance as will apply in the case of any major disruption of production or environmental accidents. He said that while this provision is absent from the 2016 Agreement, the 1999 Agreement which was signed by the Jagan administration, allowed for insurance to be taken out by Esso Exploration and Production Guyana Limited’s affiliate insurance company. Esso is a subsidiary of ExxonMobil.
Ram stated, “That requirement has been changed and now allows the Contractor to have the right to self-insure against the risks identified. This is a major concession by (Natural Resources Minister, Raphael) Trotman on an issue that only specialist lawyers know about. What it means in practice, is that anyone seeking to make an insurance claim will have to lodge that claim against Esso, CNOOC/Nexen or Hess, all of which are external companies. Those potential claimants must thank Raphael Trotman for making their chances even more difficult to succeed.”

TUESDAY
French oil giant, Total, acquires 12,000sq. km stake in Guyana basin
With interest high in Guyana’s offshore concessions, a major player in the world’s oil arena Monday announced that it has acquired exploration rights to almost 12,000 square kilometres.
The transaction still has to be approved by authorities in Guyana,
Total, one of the seven “Super major” oil companies in the world, disclosed that it has signed agreements to acquire interests into two exploration licenses offshore Guyana, the Canje Block and the Kanuku Block.
“These agreements come after entering into an option agreement for the nearby Orinduik Block. Subject to the approval of relevant authorities, Total will thus own exploration rights to an area covering over 12,000 square kilometres in the Guyana Basin.”
With high interests and very few areas left to be allocated, exploration companies have been casting their eyes towards the existing concessions already in the hands of a few.
Those stakes would be worth millions of US dollars.
“Total is very pleased with this significant entry in the prolific Guyana Basin,” says Arnaud Breuillac, President, Exploration & Production at Total.
“The Canje, Kanuku and Orinduik blocks are located in a very favourable petroleum context, evidenced by the Liza discovery in 2015. Acquiring interests in these highly prospective licences is in line with the new exploration strategy in place since 2015.”
Total said it was able to acquire a 35% working interest in the Canje Block, located in water depths of 1,700 meters to 3,000 meters, under the terms of the agreement signed with an affiliate of Canadian company JHI Associates, Inc. and Guyana-based company, Mid-Atlantic Oil & Gas, Inc.
These two companies will retain a shared 30% interest alongside operator ExxonMobil (35%).
Total also acquired a 25% working interest in the Kanuku Block, located in water depths of 70 meters to 100 meters, under the terms of the agreement signed with operator Repsol (37.5%), and will be a partner alongside Tullow (37.5%).

Stricter mechanisms needed to guide use of Natural Resource Fund- IMF
-Wants two sets of auditors to have oversight responsibility
The International Monetary Fund (IMF) has made some recommendations to the government to guide the administration’s use of Guyana’s intended Sovereign Wealth Fund which has been named the Natural Resource Fund. The international body thinks that some of the measures Guyana has outlined for reporting and auditing purposes, can be more efficient if strengthened.
The recommendations are contained in a report titled, “A reform agenda for Petroleum Taxation and Revenue Management.”
IMF officials reviewed the draft Bill which the Guyana Government prepared as a guide for the establishment of the Natural Resource Fund.
The Natural Resource Fund Act establishes the NRF to “effectively, efficiently and wisely manage natural resource wealth for the benefit of current and future generations of the people of Guyana.” The worthy objectives are to prevent revenue volatility from leading to volatility in public expenditure, prevent a loss of economic competitiveness, fairly transferring natural resource wealth across generations, and use natural resource wealth to finance infrastructure, social development and regional distribution programmes.
In its recent report, the IMF noted that there is a reporting requirement of an annual report with the audited financial accounts submitted to parliament.
In addition, quarterly reports and financial statements will be submitted to parliament within the year. IMF said that all these reports are required to be posted on the Ministry of Finance website.
IMF noted that Section 37 of the draft legislation covers only quarterly reports. The IMF pointed out, however, that annual financial statements are not mentioned. Furthermore, IMF said that while one could assume that a fourth quarter report would be an annual report, it is not clear in the Bill. Also, in general, the Fund said that quarterly reports would be less comprehensive.
Additionally, the financial organisation stated that Section 40 of the draft Bill requires the Ministry of Finance to submit an annual report which is very detailed. The Fund notes however that it is not clear who is responsible to prepare it.
IMF said that all reporting to the Parliament should be prepared by Treasury officials with inputs from Bank of Guyana.
The international organisation also stated that the NRF is a part of central government and as such, it is essentially an extra budgetary fund that should be consolidated in central government reports. It said that even if there is a separate report, it needs to be submitted together with budgetary central government reports to the Parliament.

WEDNESDAY

ExxonMobil directs what responsibilities Minister must maintain
Political commentator, Ramon Gaskin is quite perturbed that the Government of Guyana has allowed ExxonMobil to have a say in what responsibilities the Minister of Natural Resources, Raphael Trotman is allowed to delegate and what he cannot.
Gaskin recently highlighted several violations of the Petroleum Act contained in the Production Sharing Agreement that Trotman signed with ExxonMobil. He highlighted the violations as he called Professor Clive Thomas out for a “misleading” article he wrote.
In his letter, Gaskin noted 11 violations of the Petroleum Act contained in the PSA.
He said that Article Six, that speaks of the Delegation: cooperation between contractor and GGMC is just one of the violations.
Gaskin said, “An absurdity of no mean order is set out blatantly in Article 6 of the PSA dealing with delegation of Ministerial responsibility. While the agreement acknowledges the power of the Minister to delegate some of his functions – (why this is Exxon’s business is a mystery) – it goes on to say in Article 6.2 (a) that there are five functions that the Minister may not delegate but “shall” maintain the Authority and responsibility for. Well! Well! This is quite incredible.”
Article Six of the contract states, “The Minister may, subject to the provisions of the Act or any other law, delegate any person and or any legal entity to exercise and perform any of his functions under this Agreement and anything done by the delegate in pursuance of the delegation shall have the same validity and effect as it would have if done by the Minister.”
It also says that the GGMC, for the time being and until further notice is given, will support the Minister in monitoring the Petroleum Operations carried out by the Contractor, ensuring their compliance with the provisions of this Agreement, the Petroleum Act and the Regulations.
However, it was stated that the Minister “shall” maintain the authority and responsibility for certain functions.

Too many silent on giveaway of Guyana’s wealth
– Nigel Hinds, Chartered Accountant
The silence is deafening. It is indeed unfortunate that so many Guyanese are keeping quiet in the face of the glaring atrocities highlighted in the Production Sharing Agreement (PSA) that Minister of Natural Resources, Raphael Trotman signed with ExxonMobil. That is the crux of comments made by Chartered Accountant, Nigel Hinds.
Hinds said that advocates like Christopher Ram, Ramon Gaskin, Anand Goolsarran, Melinda Janki and Annette Arjoon ought to be saluted.
Hinds said, “We have too many cowards in our midst; this is no time for capitulators. The enormous oil wealth of Guyana goes beyond party politics; this is about defending Guyana’s wealth versus enabling the oil giants of the world to give us crumbs from oil finds that will likely vault us to number two in the world on a per capita basis for countries with the largest oil reserves.”
Hinds opined that the recent writings of Professor Clive Thomas are disappointing. He said that Professor Thomas’ economic renderings, “reminded me of Schopenhauer’s analysis of Hagel: Castles of abstraction—woven in impressive but vacuous language.”
While Thomas has been writing favourably about the PSA, other independent minds, including Hinds have been on the opposite side of the fence. Hinds, Thomas, Ram and Janki want the contract to be renegotiated in order for Guyana to get more.
Hinds told Kaieteur News that he thinks the contract is the worst Guyana could have gotten. He said that only a visionless individual could have signed such a contract on Guyana’s behalf.
I would have rather an agreement that, at least when you examine it, is respectful of the intellectual capacity of Guyanese. We are not focusing on who might have gotten what benefit under the table.
“That does not come into play. It is just that the contract itself is so offensive to your senses. We have people who know better. What caused them to sign on to this contract is baffling.”
Hinds said that there are many issues in the contract. He pointed to a few. He noted that litigation is to be included in cost recovery.
“You cannot put a value on the fact that we are responsible for litigation. Those are things that are meaningful and could result in losses occurring.” Hinds said that the two percent royalty is “ridiculous” and the US$18M signing bonus is “horrendous”
The accountant noted the “Stability of Agreement” clause in the contract ensures that even if Guyana modifies its financial laws or introduces more taxes, ExxonMobil will not have to confirm to any of those changes.

Unlike Guyana, other nations maintain unrestricted access to contract area
In several oil-producing nations like Tanzania, Nigeria, Indonesia and Uganda, the respective Government officials have unrestricted access to the areas in which oil companies are operating. But this is not the case in Guyana.
According to the Production Sharing Agreement (PSA) Guyana signed with USA oil giant, ExxonMobil, Guyana’s Natural Resources Minister, Raphael Trotman, must give the oil company seven days notice before he can visit their operations. He is also expected to carry out such a visit at his own expense.
This is enshrined in Article 9 of the contract which speaks to records, reports and information.
Article 9 (e) states: “The Minister, through duly appointed representatives, upon providing the contractor with at least seven days notice, shall be entitled to observe the petroleum operations conducted by the contractor at his sole cost and expense and at all reasonable times to inspect all assets, records and data kept by the Contractor relating to such petroleum operations. In the exercise of such rights under this paragraph the Minister shall not unduly interfere with the Contractor’s petroleum operations under this agreement.”
In 2012, the Government of Uganda signed a PSA with British operator, Tullow Oil. That entity is also exploring in Guyana’s deep waters. In that PSA, it states that the Government and its duly authorized representatives shall have full and complete access to the Contract Area at all reasonable times with a right to observe Petroleum Operations and shall have the right to inspect all assets, records and Data owned or maintained by Licensee relating to Petroleum Operations and the said Agreement.
It continues, “In doing so, the Government and its representatives shall not unduly interfere with Licensee’s Petroleum Operations. Licensee shall provide the Government on a daily basis with copies of any Data acquired in the Petroleum Operations (including geological and geophysical reports, logs and well surveys) and information and final interpretations of such Data in the Licensee’s possession that are acquired during Petroleum Operations. However, the Government and its representatives may make a reasonable number of surveys, drawings, tests and copies for the purpose of implementing this Agreement.”

THURSDAY

ExxonMobil contract can be renegotiated –says Granger’s advisor on Petroleum
…zero taxes, 2% royalty not international norm
Advisor to President David Granger on Petroleum, Dr. Jan Mangal, Wednesday said that the ExxonMobil production sharing agreement (PSA) with Government can be renegotiated. He added that zero taxes and two percent royalty in the current agreement is not the international norm.
Delivering a presentation on the Government of Guyana’s Vision for the Oil and Gas Sector at the University of Guyana, Dr. Mangal said that the current contract must be compared to what obtains internationally.
Dr. Mangal is a Guyanese who has spent 18 years in the industry, 13 of them with Chevron working on major oil and gas projects in the United States, West Africa and Asia. He noted that contracts should always be reviewed as new information becomes available.
“Contracts are always changed. A contract is an agreement between two people. Both parties need to be comfortable. If one party becomes really uncomfortable it will be changed,” Dr. Mangal pointed out.
He said that Guyana is a sovereign country and the evidence around the world is that contracts can be renegotiated as the situation changes.
“Look at the price for natural gas…people sign contracts for natural gas at a very high price. The price of gas has dropped internationally, people are renegotiating those contracts. A contract is an agreement and people need to be comfortable with it,” Dr. Mangal noted.
He stated that the question of renegotiating the contract is one that the people of Guyana must answer.
Asked whether he agrees with the feedback so far from the public that the contract should be renegotiated, Dr. Mangal said that the people of Guyana are doing a great job with the information which has been provided to the public.

President no show at major oil and gas summit
…Uninvited presidential advisor sees need for civil society conference
The stage was set for President David Granger to deliver the opening keynote address at Wednesday’s inaugural Guyana International Petroleum Business Summit & Exhibition (GIPEX) at the Guyana Marriot Hotel in Georgetown.
The three-day event was advertised to feature 55 national and international exhibitors and more than 400 delegates and a few hundred foreign dignitaries.
During the course of the opening session, delegates learned that the President would not be delivering the keynote address to the Summit. Instead, the address was delivered by Minister of Foreign Affairs, Carl Greenidge, who is performing the duties of Prime Minister.
The move left some attendees baffled as to why the President, if invited, missed an opportunity to deliver the keynote address on Guyana’s emerging oil and gas sector.
Ministry of the Presidency spokesman, Mark Archer, told Kaieteur News that there was a clash of two very important events and the President asked the Acting Prime Minister to stand in. Archer did not provide information on what the other important event was that kept the president away from delivering the keynote address at the Summit.
Dr. Jan Mangal, Petroleum Advisor to President Granger stated that he was not invited to the conference.
Simultaneous with the summit, Dr. Mangal delivered an address at the University of Guyana’s discussion on the ‘Government of Guyana’s vision for the oil and gas sector’.
During his presentation, Dr. Mangal lamented the need for more support for civil society.
“I was looking at the conference that is going on now; I was thinking how about a civil society conference?” Dr. Mangal questioned.
“How about holding a conference just for civil society just around oil and gas so that all the issues that civil society is dealing with including the social issues, educational, TIGI (Transparency International Guyana Inc.) and indigenous groups. You get groups from outside who have gone through the same experience before so people can engage and start talking. There needs to be help from outside for civil society,” the presidential advisor on petroleum noted.

Opposition rejects Chancellor, Chief Justice nominees
-approves Integrity Commission members
Opposition Leader, Bharrat Jagdeo, has rejected the names of Justices Kenneth Benjamin and Yonette Cummings-Edwards as Chancellor of the Judiciary and Chief Justice respectively.
The disclosures were made Wednesday after a reportedly scheduled meeting on the appointments between President David Granger and his team and Jagdeo did not happen.
In fact, the Ministry of the Presidency appeared to be upset, posting a photo on Facebook saying that Jagdeo was a no-show at the State House meeting.
According to the Ministry of the Presidency, after requesting a month for consideration of several matters, the Leader of the Opposition, Bharrat Jagdeo, failed to show up at a follow-up meeting convened. Waiting on him were President David Granger; Minister of State, Joseph Harmon; and Attorney General, Basil Williams.
The meeting was convened to discuss the appointments of the Chancellor and Chief Justice, the Integrity Commission and the Teaching Service Commission, the Ministry said.
However, the Office of the Opposition disputed that.
“Our attention was drawn to a bewildering photograph in circulation of President David Granger sandwiched between Attorney-General, Mr. Basil Williams and Minister of State, Mr. Joseph Harmon seated at a table staring pensively at three empty chairs across the table.
This odd photograph bears the caption: ‘No Show’. It is accompanied by a brief statement explaining that the Leader of the Opposition did not show up at a meeting with the President which was scheduled a month ago, to take place today.”
The Office of the Opposition Leader made it clear that having received no information confirming the meeting for Wednesday, as is the usual practice, the “Leader of the Opposition dispatched three letters which contain his response to issues raised at the last meeting.”
Jagdeo’s office claimed that additionally, at or about 16:00 hours Wednesday afternoon, the Leader of the Opposition contacted Minister of State, Mr. Joseph Harmon via telephone and informed him of the three letters to the President which were sent.

FRIDAY

Oil companies can influence Govts, but not the people – Petroleum advisor
Advisor to President David Granger on Petroleum, Dr. Jan Mangal has outlined the power of the people to make their voices heard about what is taking place in the oil and gas sector, especially as it relates to the 2016 Production Sharing Agreement (PSA) signed between the Government and ExxonMobil.
Dr. Mangal made the declaration in response to questions from students of the University of Guyana following an in-depth presentation on the Government of Guyana’s Vision for the Oil and Gas Sector.
“What you will find is that oil companies… and this is not looking at Guyana, are very powerful, and experts in everything they do. They know how to influence Governments to a T. However, they can’t influence people. The only thing they are scared of are people. That’s why it is important for Guyanese to have an intelligent debate,” Dr. Mangal stated.
Responding to several questions which highlighted a number of shortcomings in the PSA, Mangal stated that a lot of people in Guyana are questioning who negotiated on Guyana’s behalf.
The PSA was released in December, and since then there have been daily debates about the provisions of the contract, with growing concern that Guyana did not get a fair deal.
“What I would say is, let’s see how the public debate goes on over the next couple of months,” Mangal noted.
The Presidential advisor is on record, pointing out that zero taxes on oil and the two percent royalties in the PSA is not the international norm for oil agreements.
“We can all sit down and talk about it. The way I would be more happy and you would be more happy as well, is if a process was followed and we knew who was involved, and we knew their competencies and their expertise… and they were respected… and that they went out there to bat for Guyana and they did the best they could,” Mangal pointed out.
ExxonMobil is a multinational corporation with powerful reach which was run for a number of years by Rex Tillerson, the current United States Secretary of State.
Mangal has pointed out that regardless of how powerful the company is, the people’s view will weigh on the decision makers of the country.

Ram stumps oil and gas panel with questions about tax giveaways to ExxonMobil
Attorney at law and Chartered Accountant, Christopher Ram Thursday stumped a panel at the three-day Oil and Gas Summit being held at the Marriott Hotel.
When Ram was given the opportunity to ask a question during the afternoon session, it came with specific instructions from the moderator of the session, Joanna Homer, who is a Legal Officer attached to the Ministry of Natural Resources. She asked that he make his question, quick and straight.
Ram acknowledged the request to be “quick and straight” but asked that the facilitators recognize the serious issues being addressed; issues that should not be hurried.
Ram followed up on what one of the presenters had to say about taxation. He said that if consideration is to be given to the question of taxation, “we must realize that we cannot get any tax because we have the perfidious section 51 of the Petroleum Exploration and Production Act. So my question is; 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?”
Ram also asked if there is an intention to remove what he refers to as the strangulation clause of the contact otherwise known as the Stability Clause.
He asked, “What happens to the petroleum agreements that we have signed with very restricting stability clauses which state that no new law will apply to the existing agreements?”
Ram continued, “We focus a lot on the Petroleum Commission Bill, but we must not forget the regulatory framework which includes the Petroleum Exploration and Production Act and a host of current petroleum agreements that contain very restricting stability clauses.”
Homer, who is also an advisor to the Minister of Natural Resources, Raphael Trotman told Ram that there was no one on the panel who could respond to him on the intention of legislative reform as far as Section 51 is concerned.
Ram expressed the opinion that Homer, being an advisor, can state whether the intention exists. However, she told him that she was only wearing her hat as a facilitator.

Summit hears… Guyana spending $$$millions on expert advice that it is not taking – Attorney at Law, Nigel Hughes
Many of those who are worried about the extent to which Guyana will really benefit from its vast oil wealth are also concerned about the fact that the Government of Guyana seems to be ignoring advice that, if acted upon, can result in the required changes in the country’s current trajectory.
This was highlighted Thursday as Guyana’s first official international oil and gas summit continued.
Attorney at Law Nigel Hughes was a guest speaker on one of the panels. He spoke briefly on Guyana’s reliance on international advice, since the country has no history of oil and gas, and thus has a deficit of local experts.
In the question and answer segment, businesswoman and environmentalist, Annette Arjoon-Martins noted the fact that the Government of Guyana is spending millions of dollars on “experts”, but seems not to be taking much of the good advice being offered.
Arjoon noted that Guyana is at the critical stage of building its embryonic oil and gas industry. She said that this is the stage where certain decisions are most important.
Arjoon further noted, “I am noticing we have paid for a lot of expert advice, but we are not taking it.”
Arjoon asked Hughes for a proposition for the way forward. Hughes responded in acknowledgment that Guyana’s politicians seem to lean towards taking the advice that is not necessarily sound. Hughes said, “Getting politicians to take rational advice is no easy task.”
He continued, “The question is how we create an environment in which that advice is known nationally and thus accepted nationally.” Hughes said that national knowledge of the advice offered reduces the options for the political class to ignore. “That is part of the solution.”
Hughes said that there must be national discussions, where the paid experts share their opinions.
“The opinions must not only be offered to the ministers, but across the country, so the country can understand the consequences of not following the advice. Hughes said that there will then be less scope for political action not consistent with the recommendations offered by the experts.
Advisor to President David Granger on Petroleum, Dr. Jan Mangal seems to be one of the good advisors that the Government of Guyana has retained but has refused to listen to.

SATURDAY
Pre-contract cost…
US$460M seems to have been pulled from an alternate universe – Hinds
It is simply unheard of for a company to just quote a figure to be paid, whether by another company, a person, or a government, without at least giving a breakdown of the expenses.
So said Chartered Accountant, Nigel Hinds, yesterday as he expressed his concerns about the US$460M pre-contract cost that ExxonMobil wants Guyana to pay.
Guyana is now hurrying to put measures in place to monitor and assess cost recovery claims. However, it has already tied itself to the repayment of US$460,237,918. This is according to the 2016 Petroleum Sharing Agreement (PSA) that Minister of Natural Resources, Raphael Trotman, signed with ExxonMobil.
Annex C of the PSA deals with Cost Recovery. The list of items to be included in cost recovery is vast.
One of the many expenses that Guyana will have to stand is what is referred to as “pre-contract cost.”
The pre-contract cost is referred to in the contract as the “cost incurred by contractor with petroleum cooperation carried out pursuant to the 1999 Petroleum Agreement.”
Hinds said, “There seems to be no science in the mathematics used to arrive at these figures; it’s more like numbers sourced from an alternate universe.”
The accountant said, too, that he is sure that most right thinking Guyanese would like to see a breakdown of the pre contract cost or have an explanation on how the amount was determined.

Government policy is not decided by the advisor

-says President Granger on Jan Mangal’s statements

President David Granger, on Friday made it clear that policy decisions are made by him as the duly elected Head of State and the Cabinet.
While the Government hires and receives advice from advisors and technical officers, the final decision on matters is based on a large number of factors related to policy-making at the national level.
The Head of State was at the time responding to questions about comments attributed to Presidential Advisor on Petroleum, Dr. Jan Mangal.
“Government Policy is not decided by the Advisor. The Advisor advises me and any decision on policy will come out of the Cabinet,” the Head of State said.
This comment followed a statement from the Ministry of the Presidency yesterday, which put on public record that Dr. Mangal is not authorised to speak on behalf of the President or the Government.
President Granger said that while he holds Dr. Mangal’s qualifications and over 18 years of international experience within the oil and gas industry in high regard, the advisor does not make the final decision. “The advisor is very experienced in his field as a technical officer but [ultimately] policy comes from me and my Cabinet,” President Granger said.
Minister of State, Joseph Harmon, at Thursday’s Post Cabinet press briefings, said that it is the President who has to take into consideration, all the advice he receives, coupled with a number of other factors during the decision making process.
“Dr. Mangal is a well-qualified and experienced Guyanese, who is well known internationally… He provides advice to the President. It is up to the President to decide whether he accepts that advice or rejects it. So, it’s not for the Advisor to be making a statement for the President. The President makes his own statements,” he said.
Minister Harmon also said that Dr. Mangal’s comments represent only one opinion among many experts and that the Government of Guyana has consulted with a diverse group of experts on the development of the oil and gas sector.

Guyana, Brazil to ramp up military cooperation

Guyana and Brazil are preparing to review a formal agreement for military cooperation.
Brazil’s Minister of Defence, Raul Jungmann Pinto, on Friday confirmed his country’s support for Guyana which is preparing to approach the International Court of Justice (ICJ) for a peaceful resolution to the border controversy with Venezuela. The neighbouring republic has made increasingly aggressive claims in recent years.
Jungmann, who was appointed in 2016, led a visiting delegation that included Minister of Justice Torquato Lorena Jardim and high-ranking military officials into talks at State House with President David Granger, members of his Cabinet and the Defence Board.
Both sides committed to review the September 2012 Joint Communiqué, which followed the official visit to Guyana by Ambassador Celso Amorim, then Minister of Defence of Brazil. The review is intended to update the agreements in that document and bring them in line with present-day realities, as well as, to deepen defence cooperation.
“We would like to review the Joint Communiqué to determine its applicability to present-day circumstances. That agreement contained seven points, which are being implemented but in light of the present situation in the northern coast of South America, we would like to review that agreement… to put greater emphasis on surveillance and our involvement in the Amazon Surveillance System,” Granger said.
To this end, Minister Jungmann informed that Brazil is ready to revisit the terms and provisions of the Communiqué to work out the modalities of how the two countries can cooperate in the areas of defence outlined by the President.
“We are willing to review the Communiqué. We will do this through our Military Attaché…who will then refer it to the higher authorities,” he said.

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