Govt. finally responds to Glenn Lall’s court challenge over oil tax waivers

Aug 04, 2022 News

After seeking expert advice…

Kaieteur News – Weeks after it requested more time to seek expert advice to respond to the court case by Kaieteur News Publisher, Glenn Lall over its decision to grant excessive tax waiver to the oil companies, the Government of Guyana (GoG) has finally put in its submission.

Kaieteur News Publisher, Glenn Lall.

The document filed through the office of the Attorney General, Anil Nandlall outlined a number of contentions raised in Lall’s application. In January, the Kaieteur News Publisher filed an action to challenge the Petroleum Agreement, dated June 27, 2016 between the Guyana Government and the oil companies.

According to Lall the agreement between the oil company and the government grants exemptions to persons other than licensees, which violate the Petroleum Exploration and Production Act, the Financial Administration (and Audit) Act and the Constitution.

Lall’s application raises several contentions for the court’s consideration including whether the agreement between the Government of Guyana and ExxonMobil are subject to the principles of private law or public law; whether the acts of the Minister of Natural Resources and certain sub-articles of the Petroleum Agreement were ultra vires and in breach of sections 10 and 51 of Petroleum Exploration and Production Act (PEPA), sub-sections 1A and 1B of section 6 of the Financial Administration (and Audit) FAA; and Whether upon its proper interpretation the PEPA permits the payment of taxes due on behalf of licensees.

In its response, the government has noted that the Minister responsible for petroleum may enter into an agreement with the oil company as it relates to any matter related to development and exploration in Guyana.

“It is clear… that the Minister had a power both at common law and in statute to enter into the Petroleum Agreement,” the government said in its submission. Further, it contended that the Minister assigned responsibility for Finance, by order, which shall be subject to affirmative resolution of the National Assembly, be able to direct any or all written law shall not apply to or in relation to a licensee where the licensee has entered into a production sharing agreement with the GoG.

Among other things, the Government contends that Lall exercised undue delay in filing the court action. Further the government noted that Lall provided no reason for the six years hiatus in bringing these proceedings before the Courts.

“…The lapse of five years in seeking such redress amounted to inordinate delay in the absence of any cogent explanation. It is in the public interest that claims do not become stale..,” the Government said in the document.

It is further submitted that third parties, who are not before the court and have not been given any opportunity to be heard in this regard, entered into contracts of varying value with Exxon; the Added Respondent,.

The government’s response outlined that “Any declaratory orders made by this court will substantially affect the interest of those third parties CNOOC, Nexen Petroleum Guyana Limited and Hess Guyana Exploration Limited for the purposes of the Petroleum Agreement who, at minimum, would have a legitimate expectation requiring protection of the law.”

“These third parties would have already been granted certain tax concession by the Guyana Revenue Authority which would now be stopped by denying them that concession,” the GoG said in the legal document.