Govt. refuses to have parliamentary scrutiny for oil blocks awarded through direct negotiations

Aug 13, 2023 ExxonMobil, News, Oil & Gas

Kaieteur News – In recent Parliamentary discussions surrounding Guyana’s Petroleum Activities Bill 2023, Opposition Member of Parliament, David Patterson, voiced critical concerns regarding the provision that would allow the government to issue oil blocks without a competitive tender. He also proposed an amendment that would add parliamentary scrutiny to this process, but it was rejected by the government’s side.

According to the provision, the process to grant a license under the act can be executed through direct negotiations, when “special circumstances exist, which, in the national interest or national security, justify the use of direct negotiation to grant a license.”

While he acknowledged that there may be cases where national interest necessitates direct negotiations, Patterson argued strongly that there is a need for oversight.

Patterson further accentuated his stance by revisiting a past incident from 2020. “I want this assembly to recall,” he began, “an [Arabian] prince arrived in Guyana… to look at agriculture, housing, and infrastructure projects. But he left after three days… with a US$50 million contract to supply COVID vaccines with the approval of the Cabinet…”

Patterson explained that the justification for the manner in which this transaction was handled, lack of transparency and all was not dissimilar to the ‘national interest’ provision that has been injected into Guyana’s oil law. The provision gives the People’s Progressive Party Civic (PPP/C) administration the power to award bypass the competitive process, award oil blocks however, and to whomever it wishes, then claim it is in the national interest.

The example of the COVID vaccine deal with the low-ranking royal from the United Arab Emirates, Sheikh Ahmed Dalmook al-Maktoum, serves as a cautionary example of the potential misuse of such provisions. While Guyana got the vaccines it needed, it significantly overpaid. Such transactions could be fronts for rampant corruption and theft.

Given this, Patterson emphasized the need for a legislative safeguard. “We’re saying, sir, if [someone] comes and you decide that you’re interested in him nationally, you have to come back to this parliament and tell the people the conditions under which you’ve awarded the contract, and, sir, that is transparency.”

Patterson wittily remarked that the opposition does not want another prince arriving for a visit to an eco resort and leaving with a petroleum license, all under cabinet approval for the national interest.

The PPP/C rejected this proposal, and the Bill was passed as is.

The awarding of the Canje and Kaieteur blocks stands as a significant point of contention, showing the potential pitfalls of direct negotiations for contract awards. These licenses, initially granted to distinct entities through direct negotiation, were subsequently acquired by ExxonMobil, prompting significant public and industry scrutiny. Such transactions shrouded in opacity, fuel suspicions of favouritism and misconduct, especially when vast economic interests are at stake. Critics argue that without rigorous oversight and transparency, direct negotiations can stifle competition, and allow undue concentration of power in the hands of a few corporations. In the context of Guyana’s oil industry, these concerns are amplified, with many fearing that the nation’s vast oil wealth may not be equitably leveraged for the collective good.

Arabian, Canje, negotiations, Sheikh Ahmed Dalmook al-Maktoum, United Arab Emirates

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Govt. refuses to have parliamentary scrutiny for oil blocks awarded through direct negotiations

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Govt. refuses to have parliamentary scrutiny for oil blocks awarded through direct negotiations

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