Relinquishment provision in 2016 Stabroek Block deal reckless and irresponsible

Relinquishment provision in 2016 Stabroek Block deal reckless and irresponsible – Ram

Oct 12, 2021 News

Kaieteur News – Chartered Accountant and Attorney-at-Law, Christopher Ram is of the firm conviction that the arrangement for relinquishment in the 2016 Stabroek Block Production Sharing Agreement (PSA) is not only “reckless” but “absolutely irresponsible.”
Expounding on his perspective, Ram explained that the initial period of a prospecting licence is four years. Such licence is subject to two renewals of three years each.

Chartered Accountant, Chris Ram

The lawyer further noted that the standard provision in the Petroleum Act is that on an application for first renewal at the end of the four years, the company is required to give up 50 percent of the block granted and on an application for the second renewal, which is at the end of seven years, it is required to give up 25 percent of the remaining concession.
He added, “At the end of the 10 years, which brings you to the end of the third renewal period, the company has to give up all portions of the block not subject to a production licence…”
He noted that under normal circumstances, ExxonMobil would have been expected to follow the foregoing process. “Instead, through the reckless abuse of the loophole in the law which obliges that the subject Minister can vary the relinquishment arrangements, no relinquishment is required after four years and only 20 percent after the end of seven years, compared with 75 percent in normal situations,” expressed Ram.
He was keen to note that the first person to utilise this loophole was Janet Jagan in the 1999 Pre-discovery Agreement and made worse under the 2012 model Agreement produced during the time of former President, Donald Ramotar, and former Natural Resources Minister, Robert Persaud. But, the Chartered Accountant reserved his disgust with former Natural Resources Minister, Raphael Trotman, former Foreign Affairs Minister, Carl Greenidge, and former President, David Granger, the key players in the 2016 post-discovery Agreement and its relinquishment provisions.
The lawyer in concluding his viewpoint stated, “It is therefore completely reckless that we would give ExxonMobil such an arrangement after oil has been discovered and it is the reason why you are seeing this mad rush to explore for more oil regardless of the country’s capacity to manage the development and provide proper oversight.”
To date, ExxonMobil has made over 20 discoveries in the Stabroek Block. It is also rushing to find more oil discoveries before the end of the year and no doubt before 2023.

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