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Side Letter Agreement reveals … Kaieteur Block licence was granted on condition that only 40 % can be explored
By Kiana Wilburg
Based on documents emanating from the Guyana Geology and Mines Commission (GGMC), it appears that the Kaieteur Block was granted to two firms on the condition that only 40 percent of the block can be explored due to spurious claims and threats from Venezuela.
The Side Letter Agreement which was seen by this newspaper was signed between former President, Donald Ramotar, Ratio Energy Limited and Ratio Guyana Limited.
The document notes that GGMC was delegated the responsibility to ensure that the agreement was implemented. It was further noted at clause C of the agreement that the government shall continue to assert its right to the entire contract area and seek to resolve current or future claims, if any, by other states that impugn any portion of the contract area.
The licence holders acknowledged that there are claims that can obstruct the intended petroleum operations within the contract area and that such obstruction may be at the instance of the Bolivarian Republic of Venezuela in attempts to impugn the Republic of Guyana’s sovereignty in its exclusive economic zone.
Furthermore, it was stated that despite the contract being signed on April 28, 2015, no exploration works could have taken place without the expressed permission of the Government. This was only granted in 2017 by the Granger administration after ExxonMobil farmed into the block and became the Operator.
APPLICATION DATES
Additional documentation seen by this newspaper yesterday also revealed that Ratio Energy had initiated discussions for the Kaieteur Block since 2012. Confirming this during a brief interview was Commissioner General of the Guyana Geology and Mines Commission (GGMC), Newell Dennison.
Without prejudice to any investigation being carried out on the award of the blocks by former President, Donald Ramotar, Dennison told this newspaper that Ratio had submitted a proposal for a petroleum prospecting licence covering Kaieteur which was referred to at that time as Area B, in August 2012. Dennison said that negotiations concluded in June 2013 and the deal was set to be signed in October of that year.
The Commissioner said, “Why we didn’t sign it then is because there was a Venezuelan navy that seized a survey ship called the Technic Perdana. That vessel was carrying out work on Area A for Anadarko Petroleum. Because of that situation, the government put a hold on signing the agreement.”
The following year, 2014, Dennison noted that discussions were had between the Government and Ratio to the effect that if the licence was granted, no work would commence until permission was granted. Further, the license holders were made to pay all applicable fees even though they were not allowed to work immediately.
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