Oil sale agreements remain shrouded in secrecy

Jul 21, 2020 News

– Despite GY-EITI, Energy Dept.’s commitment to transparency

Almost two months ago, global watchdog Extractive Industries Transparency Initiative (EITI) sought to remind Guyana of the importance of making oil sale agreements public, especially when one takes into consideration, the commitment given by the APNU+AFC government to be transparent in all dealings for the oil industry.

GY-EITI’s Head, Dr. Rudy Jadoopat

Even after this appeal was made, neither the local chapter of the EITI nor the Energy Department has made these agreements public. Since producing oil from the Stabroek Block in December 2019, Guyana would have pre-sold three cargoes of sweet, light crude to Shell Western Supply and Trading Limited. The oil giant has already received two cargoes. For the first lift, Guyana received US$55M and for the second, US$35M was paid to the government. That money has been transferred to the Natural Resources Fund (NRF), which is being held in the Federal Reserve Bank of New York.
Kaieteur News recently contacted the Head of GY-EITI, Dr. Rudy Jadoopat and informed him that the agreements in question were not available on the agency’s website to allow for public scrutiny. Dr. Jadoopat acknowledged that the documents are not there but noted nonetheless that when they become available to the local chapter, they will be released in keeping with the EITI Standard on public disclosure.
Importantly, the Director of the Energy Department, Dr. Mark Bynoe, had given a commitment in January to be completely transparent regarding the sale of Guyana’s crude public. However, the Director and his department are yet to make good on this promise.

Energy Dept. Director, Dr. Mark Bynoe

As a result of the inaction of both parties, the international body whose standards Guyana pledged to uphold, has called on the authorities to
correct their actions. EITI reminded that implementing countries are expected to disclose sale agreements related to the State’s share of production or other revenues collected in kind.
The international corruption watchdog also said that the public disclosure of information on the sale agreements such as the identity of the buyer, committed annual and monthly oil volumes to be bought and sold, the price to be paid and mechanisms for price adjustment, are critical to public oversight.
Additionally, EITI said that open data is crucial to monitor revenues and how they are spent. Especially in times like these, when sharp declines in oil prices upend entire economies, the body said that the need for transparency is as salient as ever. EITI said too that transparency on commodity trading agreements will enable the citizens of Guyana to hold companies and its government accountable as they execute important transactions that significantly impact public revenues.
Further, EITI noted that Guyana’s authorities should ensure the country’s revenues are managed responsibly and sustainably while adding that it should remain high on the political agenda.
“The country’s economic prosperity and the livelihood of its present and future citizens depend on it,” the group noted.

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