Include ExxonMobil’s PSA in any probe – Chartered Accountant

Jun 11, 2019 News

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By Kiana Wilburg

An investigation into the oil deals Guyana signed onto is a perfectly legitimate exercise. But it should not be narrowly focused on the Canje and Kaieteur oil blocks which were signed away by former President, Donald Ramotar days before the 2015 General and Regional Elections to industry unknowns. It must include the ExxonMobil Production Sharing Agreement (PSA) that was revised in 2016 by the Granger administration, says Chartered Accountant, Christopher Ram.

During an interview with Kaieteur News, Ram stressed that there is a case for there to be a review of all contracts awarded to oil firms, so that the uncertainty about the circumstances under which these blocks were awarded can be put to rest.
But while he supports an oil blocks or agreements probe, Ram was adamant that the State Asset Recovery Agency (SARA) is not fit and proper for the job. SARA is currently probing the award of the Canje and Kaieteur Blocks to three inexperienced firms.
Ram said, “Any objective, impartial review of the agreements ought to be welcomed. But I have serious concerns about the politicians in SARA being selective about what they would and would not investigate. In any case, my contention is that the Director of SARA, Professor Clive Thomas, has been improperly or is improperly occupying the post, because he was not appointed by the National Assembly as stipulated in the SARA Act.”
The Chartered Accountant added, “There are also too many portions of the SARA Act which are unconstitutional. For that reason, it is unsafe and risky for the investigation to be carried out by SARA when its own legitimacy is under challenge.”
The auditor also expressed his disagreement with SARA being selective about which contracts or agreements it will investigate.
Just a few days ago, Transparency International Guyana Inc. (TIGI) raised concerns about the deal ExxonMobil struck with the Granger administration, deeming it to be fraught with illegalities. But the State Asset Recovery Agency made it pellucid that it will not be investigating the ExxonMobil arrangement.
Kaieteur News confirmed this with SARA’s Special Assistant, Eric Phillips.
Phillips is currently the lead person on SARA’s probe into the suspicious award of the Kaieteur and Canje Blocks by former President, Donald Ramotar.
Phillips noted that SARA’s focus on probing oil blocks at this point in time is narrow. It is fixed on the Kaieteur and Canje Blocks he said.
This newspaper then highlighted TIGI’s points, one of which states that the Exxon Production Sharing Agreement (PSA) allows the subsidiary of the American operator, Esso Exploration and Production Guyana Limited (EEPGL), to hold more blocks than the law allows.
But the SARA official said that these and other arguments were already laid out by critics such as Chartered Accountant, Chris Ram and Oil Consultant, Dr. Jan Mangal.
Phillips said, “I have heard these arguments before but it is not something we are looking into…” He also reminded that the law allows the Minister to grant permission for the company to hold onto the acreage in the case of special circumstances.
He stressed that this very point was already made by Minister of Natural Resources, Raphael Trotman.
Chartered Accountant and anticorruption advocate, Chris Ram, was one of the first legal minds here to point out the golden opportunity the government missed or ignored as it relates to the oil blocks being held by ExxonMobil.
Ram had explained that 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 in 2016, Ram said that Natural Resources Minister, Raphael Trotman, failed to address or redress the aforementioned problems.
Taking this into account, Ram had characterised Trotman as a liability to Guyana.
Ram had noted that unless the Minister can provide a satisfactory explanation for why he failed to correct the wrongs of the past, then he should be removed from office.
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 had told Kaieteur News, “There are obviously things that are illegal in the contract. But listen, 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 auditor stressed that the law requires Government to be compliant.

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