Guyana can challenge ExxonMobil contract - Oil Experts

Guyana can challenge ExxonMobil contract – Oil Experts

Mar 03, 2018 ExxonMobil, Features / Columnists, News

Chartered Accountant and Attorney-at-law, Chris Ram

Given the glaring abnormalities in the Guyana-ExxonMobil oil agreement, several international petroleum experts are convinced that there are enough grounds for the contract to be challenged in the courts.
Kaieteur News interviewed a few petroleum specialists who pointed out that one of the grounds upon which the contract can be challenged is the fact that the nation’s laws say that a company is only permitted to hold 60 blocks but ExxonMobil was allowed to keep 600.
The experts told this publication that “no country in the world has such a contract bearing this abnormality. It is illegal. As such, the contract itself is invalid.”
The officials said, “The Government must have known that this is not the right thing to do; that it goes against the very spirit and letter of the law. So why continue with it?”
LEGAL RAMIFICATIONS
Chartered Accountant, Chris Ram, was one of the first legal minds here to point out the opportunity the government missed or ignored as it relates to the oil blocks being held by Exxon Mobil.
Ram had explained that during the tenure of the PPP, ExxonMobil was given 600 blocks. This is ten times more than what the law stipulates. The nation’s rules and regulations also stipulate 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 in 2016, Ram said that Natural Resources Minister, Raphael Trotman, failed to address or redress the aforementioned problems.
Taking this into account, Ram has characterised Trotman as a liability to Guyana.
Ram noted that unless the Minister can provide a satisfactory explanation why he failed to correct the wrongs of the past, then he should be removed from office. The Chartered Accountant expressed the view that if Trotman can act in this manner, then there is no telling what else he would not do.
Ram was also asked if in his opinion, there are enough grounds for the Guyana-ExxonMobil PSA to be challenged in the court.
The Attorney-at-law said, “There are obviously things that are illegal in the contract. I really do believe that a system should not require or allow a government to engage in breaking the law and then saying to civil society, ‘Oh take it to court’ if you want to see a change .
“The law requires Government to be compliant…What I would like to know is where was the Attorney General, Basil Williams, in all of this?”

Natural Resources Minister, Raphael Trotman

STABILITY CLAUSE
Another prominent lawyer is also of the opinion that the Stability clause in the Guyana-ExxonMobil Production Sharing Agreement is also enough grounds for it to be challenged in the court system.
The lawyer reminded that the stability clause in the contract insulates ExxonMobil from any new tax or law.
With this in mind, the official said, “Taxes are imposed by law and only a law can suspend another law from operating. A contract cannot suspend a law from operating. Here you have the Executive entering into a contract which prevents laws passed by a Parliament from being applied…Any contract that collides with the law is an illegal contract…”
The lawyer added, “There is no contract that can lawfully prohibit a Parliament from imposing taxes. Guyana’s Parliament was created by the Constitution and no contract can circumscribe those powers.
“The contract can be challenged in court and all those clauses can be set aside; the entire contract can be set aside on the grounds that it is unconstitutional.”

Discover more from Kaieteur News

Subscribe to get the latest posts sent to your email.

Latest News