Suriname law demands competitive transactions in oil sector - but Guyana open to abuse

Suriname law demands competitive transactions in oil sector – but Guyana open to abuse

Nov 24, 2020 News

President of Suriname, Chandrikapersad Santokhi.

Kaieteur News – Suriname’s Petroleum Laws demand that there be competitive transactions between contractors and sub-contractors in the oil and gas sector. In fact, the laws explicitly dictate that every transaction between a contractor and sub-contractor must be concluded on the basis of valid competitive international prices and other conditions which would be reasonable and fair.
This competiveness means that there would be higher levels of transparency between the contractors, sub-contractors and the government, which would be offered at the best prices.
This rigid rule is not only absent from any legislation in Guyana, nor the Production Sharing Agreement (PSA) between the government and ExxonMobil, but also the draft Local Content Policy that was finalized by United Kingdom consultant, Dr. Michael Warner.
Notably, Kaieteur News had exposed in a series of articles how Dr. Warner had ignored and removed key recommendations, meant to give Guyanese an advantage in the oil sector from a draft Local Content Policy written by Trinidadian expert Anthony Paul. In that series, it was exposed how ExxonMobil was a client of Dr. Warner.
International oil and gas consulting agency, Chatham House had indicated the importance of integrating procurement rules with local content efforts. This organization had stated that this would ensure that procurement rules, guidelines and strategies be employed in the sector, to which a significant portion of local services and products are utilized by foreign companies in the oil sector.
Several PSAs around the world have embedded in them, strict procurement rules, which must be followed by oil operators. This is the case with African nation, Ghana, for example.
Guyana’s contract however, mentions nothing about procurement laws that ExxonMobil must follow. Further to this, Guyana has no legal provision in place which dictates that competitive pricing must be used between contractor and subcontractors. This leaves the country open to abuse from oil companies.