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Report exposes Exxon’s hand in Cabinet meeting on Stabroek Block deal
By Kemol King
A strictly private and confidential report commissioned by Cabinet itself has demonstrated that ExxonMobil was intimately involved with the Ministry of Natural Resources in the period leading up to the signing of the Stabroek Block licence.
Minister of Natural Resources, Raphael Trotman
In fact, the report, which builds on information supplied by Government officials, states that an ExxonMobil official, Brooke Harris, wrote the Cabinet memorandum that Minister of Natural Resources, Raphael Trotman, presented to Cabinet for its approval of the controversial licence.
Attorney-at-Law Christopher Ram, in the Friday last edition of his Stabroek News column ‘The road to first oil’, called this ‘the most important bit of information’ in the report prepared by British law firm, Clyde and Co.
The firm found that, on May 25, 2016, “Harris [Exxon’s former Commercial Advisor] provided by email a first draft Cabinet Memorandum to [Legal Advisor to Minister Trotman, Joanna Simmons Homer]”.
In that email, Harris [the Exxon official] mentioned, “We have strong operational need to complete this entire process (i.e. all agreements are signed and effective) by mid-September… The timing drives the urgency behind signing the agreements the week of June 6th (following a successful Cabinet meeting), after which we can commence the required 3 month period following our notice of intent to relinquish the current licence.”
In the same email, Harris also said that ExxonMobil has a “strong operational need” to have the Section 51 order confirmed by the National Assembly “before we relinquish the current 1999 Petroleum Agreement”. That refers to the provision, which granted ExxonMobil and its partners a permanent tax holiday.
Ram wrote, “It did not stop there: Clyde states in its report that the Cabinet Memorandum was prepared along the lines of [that] email”.
It may not have been the first draft alone, it appears. The report states, “we were also provided with various emails exchanged from 20 May 2016 until 31 May 2016 between Hon. Minister Trotman, Mrs. Homer and Mrs. Harris regarding the Cabinet Memorandum…”
Then, “We understand that the Cabinet Memorandum was prepared further to the email correspondence and draft versions exchanged between… Homer and… Harris during the period…”
Trotman and Homer received “daily phone calls” from the Exxon-led consortium, Clyde & Co stated.
ExxonMobil wrote the first draft, and then steered its development throughout the entire process leading up to June 3, 2016 when Trotman placed the document before Cabinet.
Why it was necessary for ExxonMobil to draft a Cabinet document on behalf of Trotman’s ministry is unclear.
The memorandum was titled, “Proposal for Cabinet’s consideration and approval of the process required for the issuance of a new Production Sharing Agreement with Esso Exploration & Production Guyana Limited and its joint venture participants Hess Guyana Exploration Limited and CNOOC Nexen Petroleum Limited”.
It provided background information and set out Minister Trotman’s concrete proposal regarding the agreement. The Clyde and Co report shows that the proposal was actually more of ExxonMobil’s proposal than Trotman’s.
Cabinet considered the Memorandum on June 7, 2016 and “approved for the process to commence,” Clyde and Co wrote.
Speaking to Kaieteur News, Ram said that Trotman would go to an internationally respected firm (Clyde & Co) to salvage his reputation, but when it came to protecting Guyana’s national interest, the Minister relied on ExxonMobil to produce the draft on May 25, 2016 “exactly fifty years to the day since Independence, while we were celebrating 50.”
The Memorandum ExxonMobil steered states “the most appropriate approach to provide [the Contractor Consortium] with additional time to conduct exploration operations would be to issue a new Petroleum Prospecting Licence and to sign a new Production Sharing Agreement along the same general terms as the previous one.”
The Memorandum lays out the process Government would go on to use to give effect to the new agreement, including the recently leaked “legally questionable” Bridging Deed, as well as the elusive escrow letter, held by Sir Shridath Ramphal.
Ram said, “If ever Guyanese should be offended at… the arrogance and disrespect for us Guyanese, it is being told this by Clyde [& Co],” as the report buttresses assertions that ExxonMobil strong-armed Guyana into agreeing to an overwhelmingly lopsided deal.
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