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Guyana should have say in all oil companies’ spending – TT expert, Anthony Paul
By Kiana Wilburg
When the Stabroek Block deal was released in 2017, several international experts cringed upon noting the alarming loopholes the Coalition Government left unaddressed.
In previous articles, Kaieteur News had quoted international energy lawyer, J. Jay Park, as saying that Guyana is supposed to have a say in the approval of the budgets these oil companies draft.
TT expert, Anthony Paul
It is the same as if a mother drafts a shopping list on how her daughter is supposed to spend $60,000 on groceries for the home. Naturally, the mother is supposed to have some say over what her daughter would purchase for the home, which supermarket she would go to so they can get the most value, and how many of the items she should get. The mother is supposed to have a say, after all, she is paying for it.
But this is not taking place in Guyana’s case. Park found that Guyana’s Production Sharing Agreement (PSA) with ExxonMobil gives the country no say over what the operator budgets to spend on the Stabroek Block.
This is in spite of the fact that Guyana will be footing the bill. The contract only gives the country the right to audit. One can also say that this is the same as the mother allowing her daughter to spend on whatever she wants, whether it is $60,000 or $1M and the daughter saying, “If you have a problem, you can check all my receipts. The cost for the items is on par with international prices.”
The lawyer noted that the absence of legal approval for ExxonMobil’s budgets is actually an odd feature in the Guyana-ExxonMobil PSA; He is not the only one who shares this view.
In agreement with him is Trinidadian expert, Anthony Paul.
During an interview on Kaieteur Radio’s show, Guyana’s Oil and You, Paul categorically stated that Guyana should have the power to influence how the oil companies spend the money and not only the power to audit what is already expended.
In fact, the petroleum consultant said that Guyana should be able to do this for all oil companies.
He noted that several opportunities still exists for this to happen.
“…Going forward, Guyana can say ‘We want to participate in every single contract’.” This means that any investor coming in, Guyana will present an entity that it owns which would operate as a partner with that investor. The company representing Guyana’s interest would be part of the approval process for work plans and budgets.”
The Trinidadian added, “It will also give Guyana the opportunity to influence many other things. Because the state company is involved, you will also have more information available to access which can be shared with the citizenry.”
HOW BADLY DO YOU WANT IT?
Paul said that the partnership arrangement he proposed is just one of the many ways Guyana could have a say on budgets and work programmes. But the million-dollar question remains: “How badly do your leaders want it?”
Paul said whether Guyana decides to increase its authority over oil companies’ budgets is dependent on how the leadership of the country feels.
He also noted that one of the challenges Guyana will face is the type of advice it will receive on these matters. Because of the lack of funding to get the required experts, Paul noted that Guyana would be in receipt of advice from non-governmental organisations and development associations, which focus on anti-corruption.
The Trinidadian expert said while this is important, the focus of these organisations tend to be, “Let’s avoid opportunities for corruption” rather than “let’s strengthen systems to prevent it.”
“So in recent times, governments like Guyana have been advised to not have state companies for oil because it is an avenue for corruption. That is true but countries that have done well in oil and gas, including Norway, have had state companies with an interest in every block. Why do they do that? Because they are not only able to oversee what is going to be spent and have a say, but they are also able to learn the business.”
The Trinidadian noted that Guyana could improve its position significantly. He said, however, that it is only doable to the extent that the government has the ability of understanding what the country deserves and the confidence to ask for it.
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