Opposition ready to support renegotiation of Exxon contract

Feb 04, 2022 News

– Govt says PSA is the worst crime committed against Guyanese

By Gary Eleazar

Kaieteur News – The Production Sharing Agreement (PSA) that was signed between the Government of Guyana and Esso Exploration and Production Guyana Limited (EEPGL)—ExxonMobil Guyana—and their partners to develop hydrocarbon resources in the Stabroek Block represents the worst crime committed against Guyana and the Guyanese people.

This declaration was made yesterday during the fourth day of Budget Debates in the National Assembly, by Natural Resources Minister, Vickram Bharrat. Although lamenting the PSA being the worst crime against Guyanese, there was no mention of a renegotiation—a proposal that was made to the House minutes earlier by the Shadow Oil and Gas Minister, David Patterson.
The Alliance for Change (AFC) Member of Parliament, in his presentation to the House on the oil and gas sector had offered the opposition’s support to the government with regard the renegotiation of the PSA, commonly referred to as the ExxonMobil Contract.
Patterson—who preceded Bharrat’s presentation to the Debates—had lambasted the administration over its mismanagement of the sector since taking Office.
Bharrat in defense of the People’s Progressive Party Civic’s (PPP/C) stewardship of the industry said when the party took office, the industry was floating adrift since there was no proper framework in place to effectively manage the industry. He contended it had been treated as a one man show, later shifting from Ministry to Ministry.

MISFEASANCE
Patterson accused the administration of not only aiding and abetting the fleecing of Guyana’s resources but also of misfeasance in office. Addressing some of the troubling aspects with regard the stewardship of the industry thus far, Patterson lamented the fact that Guyanese are being sold a product without being able to verify it -something which he said is akin to the colloquial saying, buying pig in a bag.
To this end, Patterson reported that in September 2020, the Commissioner of GRA reported that the audit of Exxon preproduction costs, reportedly some US$460M was completed and handed over to the government. The nation, he said, “was stunned to learn two weeks ago that this is not the case.”

Compounding the situation further, Patterson noted that 15 months later, after not making a single public comment, “the government now wants us to believe that the process undertaken by the international auditors and supervised by GRA was defective.”
As such, he suggested that “even if that was the case, why wait 15 months to inform the public? Why has this not been a matter of urgency for the government? After all, an audit of the claimed preproduction costs, would have provided an invaluable insight to the billing practices of the operator.”

According to Patterson, government’s continued failure to audit Exxon’s US$9.5B spending “is tantamount to the Government aiding and abetting the fleecing of Guyana’s resources.”
He continued further, saying the PPPC’s excuse that the process has been stymied because of the absence of strong local groups to do the audits, “is quite frankly unacceptable.”
The AFC Speaker with the Oil and Gas portfolio told members of the House, it is estimated that an audit of Exxon expense claims can garner savings of up to US$1B, “far more than the US$604M being removed from the Natural Resources Fund.”
He was adamant, “failure to do these audits is a commission of wrongdoing and misfeasance in office. No excuse or political grandstanding will absolve the Government of this grave sin against the nation.” According to Patterson, “no one buys a bottle of water that is not full, because you can see through the container; No one buys fruits from our local vendors if the product is visibly damaged.”

VERIFICATION
He noted however, if you buy a bottle of cooking gas, “you cannot see if you are getting value unless the bottle is weighed on a standard scale, or unless you believe the seal has been properly set and has not been tampered with.”
According to Patterson, “this is what the government is asking our nation to accept, a product from a supplier without verification.”
He said too, there have been repeated public requests for the Ministry of Natural Resources to provide the daily production information “for the oil, we are paying Exxon to explore for, to drill for, to store and mostly to sell for us.”
To date, Patterson said, there is still no information. “There are no figures to perform analysis on. No production data which can be tabulated with the corresponding oil prices to ensure that we are receiving value for our oil. So, the Guyanese citizen, the main stakeholder in all of this, remains in ignorance and cannot check what we are told.”
He concluded that “this lack of transparency dominates the PPPC’s activities in the Oil and Gas sector and quite frankly characterizes the PPC’s activities in general and should be concerning all stakeholders wherever they may be.”
To this end, the AFC Executive told members of the government, the opposition will support new systems of governance which would facilitate “world-class” management in all areas of our economy and society.
Guyana, he said, has been extraordinarily blessed, “let us use our blessings not just to calculate averages that look good on paper, while the standard of living of our people is declining, but rather, with wisdom to improve the lives of all our citizens, while positively impacting our region.”