No signing bonus from Canje owners

Oct 18, 2020 News

Horrifying provisions of Canje block agreement…

Kaieteur News – Mid-Atlantic Oil & Gas Inc., the company awarded the Canje block by former President Donald Ramotar weeks before the 2015 elections, paid no signing bonus.
This is because the government of the day moved forward with the award of the block without first taking the time to study Guyana’s offshore patrimony so it could understand and market Guyana’s value. It is also because the company in question had only popped up for the purpose of owning the Canje Block, and likely didn’t even have the finances to pay the government. The two directors who incorporated the company and received the block had no prior experience in oil and gas exploration.
Signing bonuses are generally paid to governments upon granting an exploration or production agreement.
Brazil, like many other nations, has licensing rounds characterized by competitive bidding, during which it sets minimum signing bonuses for interested companies to meet.
Many governments conduct seismic surveys which give them the information they need to demand more from oil companies.
“Seismic data,” Dr. Jan Mangal had told Kaieteur Radio, “is what oil companies need to decide whether they will invest in a particular area in a block, in a country. By acquiring ownership of that data – and not only for Exxon, for any other company that has done seismic in Guyana – Guyana can take that data and better understand what is actually out there in its own waters.”
Before Exxon’s discovery in 2016, there were no proven reserves offshore Guyana. However, the US Geological Survey (USGS) published a report in the year 2000, which estimated the Guyana-Suriname basin to hold 13.6 billion barrels of oil and 32 trillion cubic feet of natural gas.
This would not have been the only tool to the government’s disposal, had it waited and studied its offshore area. It would have had valuable data, as well as ExxonMobil’s first discovery which was announced in May, 2015 only a few weeks after the Canje Block was awarded.
Ramotar acted on the advice of the Minister of Natural Resources at the time, Robert Persaud, to grant a contract to Mid-Atlantic without demanding a bonus for the people of Guyana.
This is the first in a series on the Canje Block contract provisions granted to Mid-Atlantic Oil & Gas Inc. in March 2015. Kaieteur News will continue to explore various provisions of the contract, which fall well below industry standards.
More to come tomorrow…

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