Days after receiving certificate Exxon extends Ramps Logistics contract

Nov 18, 2022 News

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(TRINIDAD EXPRESS) – ONE DAY after Ramps Logistics Guyana received its local content certificate from the country’s Local Content Secretariat its logistics contract with ExxonMobil was extended until September 30, 2023.

Ramps Logistics Guyana’s current five year-contract with the American multinational was supposed to end this month and it was uncertain whether would continue to provide services for the company. Chief Executive Shaun Rampersad confirmed to Express Business yesterday that the contract was extended until Sept 30, 2023. “We expect Requests For Information to come out later this year,” he said.

Last month, ExxonMobil, one of the world’s largest publicly traded oil and gas companies, announced two additional discoveries at the Sailfin-1 and Yarrow-1 wells in the Stabroek block offshore Guyana. Despite this, ExxonMobil had not announced who will handle logistics operations from next month, even though it issued an international tender in November 2021 for the next five years.

The submission deadline was January 6, 2022.

Ramps Logistics Guyana was first awarded a five-year logistics contract by ExxonMobil in 2017.

In a statement last month, ExxonMobil said it has made more than 30 discoveries on the block since 2015, and it has ramped up offshore development and production at a pace that far exceeds the industry average. ExxonMobil’s first two sanctioned offshore Guyana projects, Liza Phase 1 and Liza Phase 2, are now producing above design capacity and achieved an average of nearly 360,000 barrels of oil per day in the third quarter. A third project, Payara, is expected to start-up by the end of 2023, and a fourth project, Yellowtail, is expected to start-up in 2025. The company said that it is currently pursuing environmental authorisation for a fifth project, Uaru.

By the end of the decade, the company said it expects Guyana’s oil production capacity to be more than 1 million barrels a day. The coveted multi-million dollar logistics contract prompted Ramps Guyana to seek judicial review after it was denied a local content certificate by the Local Content Committee which compromised its ability to provide services for its clients. Last Friday, Chief Justice Roxane George, SC ruled that Ramps Guyana be awarded its local content certificate.

AG responds

In her ruling, the Chief Justice said that Minister of Natural Resources and/or the Local Content Secretariat breached Section 6 of the Act when Ramps Logistics was refused the Certificate of Registration and that the Minister of Natural Resources and/or the Local Content Secretariat have misconstrued and/or misapplied Section 2 (a) (i) and 2 (a) (ii) of the Act which defines what constitutes a “Guyanese company”.

She held that the decision of the Minister of Natural Resources and/or the Local Content Secretariat to refuse to grant Ramps Logistics the certificate is unlawful, illegal, null, void, and have no effect. The Chief Justice had noted that the Minister of Natural Resources has no authority under the Act to make a decision whether to grant or refuse an application for a Certificate of Registration under the Act and that the Local Content Act “clearly needs” regulations to prevent arbitrary decision-making. In a statement following the issuance of the certificate, Guyana’s Attorney General and Minister of Legal Affairs, Anil Nandlall SC, said that the written judgment of the Honourable Chief Justice “would be scrupulously examined for the purpose of determining, inter alia, whether there will be further proceedings.”

He said, “From the inception we indicated that the Local Content Act, No. 18 of 2021 was an initial attempt to create a novel statutory framework in respect of a new undertaking, indeed without compare in the region. As a result, we promised that it will remain under constant review and will be modified and refined with time and experience. We are satisfied that the Act provides a solid foundation which has guided the sector thus far and enabled a protective network for the interest of Guyanese and Guyanese companies operating in the sector.”

He said that Regulations and Guidelines are already in draft and will now benefit from the Chief Justice’s ruling and experience garnered in the sector. “These Regulations and Guidelines will further enhance the legislative framework, as well as set out criteria which will inform the exercise of discretion and guide the decision-making processes enshrined in the legislation. These measures will also address the conduct of operators in the sector, including their compliance levels with related legislative and administrative requirements, as we strive to achieve the legislation’s core intent, that is, to protect and promote Guyana’s best interest,” he said.

Ahead, Ramps Guyana chairman Shaun Rampersad still has a legal matter with the Guyana Revenue Authority (GRA) which has been adjourned to November 25. In October, the GRA instituted ten charges in the Georgetown Magistrate’s Court against Ramps Logistics (Guyana) Inc for false declarations to the Authority. Rampersad paid bail of GY$500,000 (about TT$15,000) to Guyana’s Supreme Court and entered a plea of not guilty.

In an affidavit in the High Court, Guyana’s director of its Local Content Secretariat, Martin Pertab had said that the Ramps Logistics’ Guyana second application for a local content certificate has been halted pending the outcome of the company’s matter with the Guyana Revenue Authority (GRA). “The Secretariat in consideration of the criminal charges has decided to halt the application pending the hearing and determination of the criminal charges against the Applicant. In the circumstances, the applicant’s application has been put on hold until either the hearing and determination of the criminal charges or a resolution of the matters as was previously done,” Pertab had said.

Background

A local content certificate is essential for the company to operate in the energy business in Guyana. The Local Content Act was passed in Guyana in December 2021 to encourage development and greater participation for Guyanese nationals in the petroleum industry. Among the requirements for certification was that the company had to be registered in Guyana, have 90 per cent of its employees from Guyana, 75 per cent of its management team to be Guyanese nationals and that it must be 51 per cent owned by a Guyanese national.

Rampersad sold 51 percent of Ramps Guyana to Deepak Lall, a friend and businessman, a Trinidad-born, now naturalised Guyanese citizen this year. Lall’s birth was registered in Guyana in June 2021. His Guyanese passport was issued on September 9, 2021. Lall, a mechanical engineer, is the managing director of the Point Lisas-based Qualitech Machining Services Limited, a machining services, engineering sales and service and project delivery provider in the Caribbean. He became a shareholder at Ramps Logistics Guyana on March 9, 2022, acquiring 51 per cent of the company in newly issued shares, for US$1 million. Lall told the Sunday Express that as part of the wider diaspora, it was an entry to contribute to the country. Ramps Logistics, a family-owned business from Cunupia, expanded into Guyana into 2013, and set up a subsidiary company, Ramps Logistics Guyana. As a pioneer investor in Guyana, Ramps was “in the right place at the right time” to quote Rampersad, when ExxonMobil started drilling in Guyana in 2015.

In 2017, Ramps Logistics Guyana was awarded a five-year logistics contract for ExxonMobil to coordinate its operations in Guyana.

Timeline of Ramps Guyana’s legal matters

1. June 9:

Ramps Guyana is denied Local Content Certificate by the Guyana Local Content Secretariat.

2. July 14:

Ramps Guyana re-applies for Local Content Certificate.

3. July 12:

The Guyana Revenue Authority (GRA) wrote to Ramps Guyana informing them of an investigation into alleged false declarations.

4. July 25:

Ramps lawyers wrote the GRA responding on why the allegations raised by the GRA had no basis in law and clearly outlined the sections of the Guyana Customs Act that they relied on to form this opinion.

5. September 30:

Ramps Guyana files for Judicial Review against the Local Content Secretariat.

 

6. October 5:

GRA issues a Press Release to say they are filing charges against RLG for False Declarations.

7. October 20:

Ramps first hearing on Judicial Review Matter

8. October 21:

Ramps hearing on the GRA matter. Rampersad is fined $500,000 Guyanese.

9. November 11:

Guyana’s High Court orders the Local Content Committee to award Ramps their local content certificate.

10. November 14:

Ramps receives its Local Content Certificate.

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