Money in whose pockets?

Feb 16, 2020 Features / Columnists, Peeping Tom

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When it comes to the oil agreement which Guyana signed, the more that is said, the least is known. The more answers that are provided, the more questions arise.
There are quite a few persons who have been belabouring, and quite rightly so, the approval which was granted for Guyana to issue a petroleum production licence and the renewal of a prospecting licence to Exxon and her partners. My main concern is not so much the issuance of the licences, as to the terms on which they were granted.
It now seems safe to assume that Cabinet received a memorandum which addressed the urgency of issuing the licences. What is not clear is whether Cabinet actually approved of the terms of the signing of the contract with Exxon.
Once again, I have to refer to something, which a former advisor to the President wrote. He said that when he told the President that the oil contract had been signed, he (the President) seemed surprised. So, even if we assume that Cabinet gave its consent to the renewal of the petroleum prospecting licence and the issuance of a petroleum licence, the issue remains as to whether the President and Cabinet consented to the 2% royalties, 50% share of profit oil, the 75% cap on cost recovery, the lack of ring-fencing, the government paying the oil companies’ taxes and the generous tax concessions offered.
And so I am asking again: Did the contract go before the President and Cabinet? This has implications for the contract’s legality.
It is now being reported that Exxon actually assisted in drafting the Cabinet memorandum for the renewal of the prospecting licence and the issuance of the production licence. What a thing!
I have said it before: we have a lot of pretenders in government. Some of them are being paid fat salaries, but they lack the ability to do certain things, which are expected of persons in their position. Now tell me, why is it that Guyana has to face the ignominy of having a foreign firm draft a Cabinet memorandum, when we are paying persons super salaries to do the same level of work?
I have seen persons in public fawning over government officials. They look up to these persons as if they are gods. Yet, many of these officials are clueless about their work. Many of them are being put to do work beyond their competence. What the public needs to do is not become stupefied by those who hold power, but to hold them accountable. And if they cannot do the job which they are put there to do, they should be asked to leave.
Guyana has to have strong institutions and controls in place if it is going to prevent the squandering and stealing of its oil wealth. To ensure this, it has to have the best and brightest persons occupying positions in the management and regulation of the oil and gas sector, and the management of the economy. There is also a need for greater transparency to replace the culture of secrecy, which exists in government.
This past week, a French Court imposed a fine of US$33M and instated a three-year jail sentence on the son of the President of Equatorial Guinea for embezzling public funds. Switzerland prosecutors had dropped charges of financial wrongdoing against the same individual, but had decided to auction some of his luxury vehicles. Last year, Brazil had seized some luxury watches from a delegation from Equatorial Guinea who were passing through that country.
As was reported in yesterday’s edition of the Kaieteur News, the International Monetary Fund is calling for greater transparency in that country as the basis for further assistance. The IMF has laid down conditionalities for assisting that country, which registered a 5.9% decline in growth last year. The IMF has called for the adoption of an anti-corruption law covering conflicts of interest and which requires senior public officials to declare their assets.
Despite producing more than 3 times the amount of oil, which Guyana will soon be producing, Equatorial Guinea, which has a small population, still has high levels of poverty – less than half the population having access to clean drinking water.
Guyana has to be wary that it does not go down this route. Already, Global Witness is claiming that the oil agreement has robbed you and me of G$15M each.
Transparency rather than secrecy is needed to ensure that people benefit from oil revenues. No amount of three-card tricks about cash transfers are going to guarantee that the oil monies end up in the people’s pockets rather than the politicians’ pockets.

(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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