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Govt. in discussions with Exxon to reclaim 20 % of unexplored portions of Stabroek Block for remarketing next year – Reuters Report
Kaieteur News – Guyana’s Vice President Bharrat Jagdeo has revealed to Reuters that the People’s Progressive Party Civic (PPPC) Government plans to take back 20 percent of the Stabroek oil block this year and remarket it by 2024. Importantly, the relinquished portion would be that which ExxonMobil has not explored or made a discovery.
He reportedly told Reuters in a recent report that the ExxonMobil-led consortium “missed investment deadlines for portions of the block not under exploration or development.” He said too that it would be illegal for Exxon to sit on portions of the block which have not been utilized.
Chartered Accountant and Attorney-at-Law, Christopher Ram had previously pointed out that Exxon should actually be relinquishing 75 percent of the block instead of 20 percent. He said the company is able to hold onto a large part of the acreage due to a loophole in the law that was exploited by both the Coalition and the PPPC Governments.
Ram had explained that the initial period of a prospecting licence is four years. Such licence is subject to two renewals of three years each. Expounding further, the lawyer said, “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.
He was keen to note that the first person to utilise this loophole was Janet Jagan in the 1999 Pre-discovery Agreement. He said it was made worse under the 2012 model Agreement produced during the time of former President, Donald Ramotar and former Natural Resources Minister, Robert Persaud. The Chartered Accountant reserved his disgust with former Natural Resources Minister, Raphael Trotman, and former President David Granger, the key players in the 2016 post-discovery Agreement and its relinquishment provisions.
Ram expressed the fear that with little oversight and undisclosed arrangements between ExxonMobil and the Government, the blocks to be given up in 2023 can be subject to any form of machination via production licences.
ExxonMobil and its partners he said are pushing for more and more explorations licences so that by the time the first relinquishment is due in 2023, the 20% would be of a considerably reduced portion of the Stabroek Block.
To date, ExxonMobil has made 43 discoveries in the Stabroek Block. It is also rushing to find more oil discoveries before its relinquishment period is formally activated.
- Attorney-at-Law, Bharrat Jagdeo, Christopher Ram, People’s Progressive Party/Civic (PPPC), Vice President
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