Who gave the orders to sign the contract?

Jan 08, 2020 Features / Columnists, Peeping Tom

We live in a strange country. One man denied a link between debt and oil. Peeping Tom demolished the denial and yet the man rebutted that Peeping Tom had vindicated his position.
Guyana has to repay the pre-contract costs for oil exploration. This costs runs to almost half of what Guyana’s external debt was when it was classified as a highly indebted poor country. Yet, we are now being told that there is a difference between the pre-contract costs and sovereign debt, since the former would only become due if oil was found. These rebuttals remind me of the argument that 34 is the majority of sixty-five.
Well, Guyana has found oil and it has to repay the pre-contract costs. You can call it what you want, it has to be repaid. And we know that the pre-contract costs alone will amount to more than 3 times the amount which Guyana is expected to earn in its first year of oil production.
The generous terms of the Production Sharing Agreement between Exxon and the government of Guyana, was not the only bonanza that the oil giant received. The company also was able to negotiate a mere US$18M signing bonus.
At the time of the signing bonus, Exxon had struck oil. The government knew and accepted a mere US$18M.
The French Company Total recently agreed to pay Suriname US$100M as a signing bonus for a 50% stake in an oil block in that country. No oil had been found in the block at that time and Suriname received more than five times what Guyana got.
Out of the US$18M, it is believed that US$3.7 has already been spent on legal fees for prosecuting Guyana’s case in front of the International Court of Justice. The case has not yet gotten past the jurisdictional stage and already almost G$800M has been spent. Imagine what will happen if it does get past that stage.
Last October, Brazil received US2.2B in signing bonus for twelve oil blocks. This works out to US$183M per block. Guyana accepted 10% of this sum as its signing bonus for the Stabroek Block, and this after oil had been found.
Those who were responsible for signing the Production Sharing Agreement and the signing bonus between Exxon Mobil and the government Guyana must be held accountable after the elections. There must be an inquiry into the entire process which led to the signing of those agreements.
The country is still not sure who gave the instructions for the agreement to be signed. And no journalist seems keen on asking. They know why they are so cagey about discovering the truth about what took place with the negotiations.
This newspaper has reported a former petroleum adviser to President David Granger as saying that when he told the President about the signing of the contract, he seemed surprised. The Minister of Natural Resources was quoted by Kaieteur News as saying that he was instructed to sign the contract. So who instructed him?
If the matter was considered by Cabinet, then the official record of Cabinet would disclose the discussion. It would be strange for Cabinet not to have been involved in discussing and approving the contract.
And as Guyana prepares to begin to sell its share of oil, the caretaker government is yet to advise the public of what will be the terms of the sale. So why the secrecy? If a good hand has been dealt in the negotiations, the government should have been excited to reveal the details.

(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper)

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Who gave the orders to sign the contract?

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