Govt. accepting ‘black is red’ by failing to verify Exxon was impacted by pandemic – TIGI Pres.

Aug 23, 2023 ExxonMobil, News, Oil & Gas

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Kaieteur News – President of Transparency Institute Guyana Inc (TIGI), Frederick Collins is questioning the extension granted to ExxonMobil and its partners allowing the companies to continue exploring the 26,800 square kilometers Stabroek Block.

In keeping with the provisions of the 2016 Production Sharing Agreement (PSA) the Stabroek Block partners were expected to relinquish or give back the state a portion of the block that is equivalent to 20 percent in October this year. In June this year, Vice President Bharrat Jagdeo revealed that Exxon will keep the entire concession for an additional year, since the company’s operations were impacted by the Corona Virus (COVID-19) Pandemic.

Members of the former Coalition government has however denied this claim by the oil giant and shared proof that the company was allowed to operate uninterrupted during the pandemic. This includes regular travel for employees, despite the closure of the country’s airports and a Gazetted Order by the Ministry of Public Health granting petroleum operations to continue as an ‘essential service’.

The Order dated April 9, 2020 stated “all services shall remain closed except for the following essential services which may carry on operations for 24 hours each day…electricity and energy services including the oil and gas sector and those who provide services to the oil and gas sector; businesses that ensure global continuity of supply of mining and petroleum materials and products; mining and petroleum development operations, production and processing; mineral and petroleum exploration and development; mining and petroleum supply and services that support supply chains in the mining and petroleum industries.”

Weighing in on the subject, the TIGI President told Kaieteur News that the organization is not surprised by the government’s decision as it aligns with their tendency of siding with Exxon.

He said, “It is in line with how they have been not taking care of the interest of this country and more in line with their inclination to facilitate all things Exxon. It is obviously the case with the appeal against the judgment that required Exxon to provide full liability coverage for oil spills. It is in line with the way they behaved when my predecessor, Troy Thomas took action against them for the length of time they gave Exxon for a permit, which was against the law.”

Collins pointed out that while it has been the tendency by government to side with the oil companies, its recent decision is no surprise but more so a disappointment. He explained that the watchdog body previously penned a series of articles criticizing the provisions of the lopsided oil deal, adding that TIGI is now not only disappointed but curious as to the decisions being made in the management of the sector, specifically as it regards the Stabroek Block.

According to him, “Our disappointment has turned to curiosity given that the government has been claiming- and the opposition- about sanctity of contracts. It is the same sanctity of contract that requires 20 percent of the Stabroek Block to be handed back to the people of this country after a specific time. It raises curiosity now because the politicians have even suggested that it would be unsafe from a legal standpoint to challenge the contract…but here is a section of the contract which places a requirement for Exxon to hand back a portion of that award, and the government, it imposes a duty upon the government to ensure that that area has been secured and be put to auction to see what it is worth for the people of this country.”

He added, “Now that we have, according to the very contract, the opportunity to reclaim to ensure that the resources of this country are fairly treated, you are going to extend for another year. This is why I’m saying our disappointment should now raise to curiosity. Why would any government do that?”

Meanwhile, in pointing to the massive acreage held by Exxon, Collins pointed out that the 20 percent portion to be relinquished is equivalent to 5,360 square kilometers- almost four times the size of an oil block in neighbouring Brazil.

To this end, he reasoned, “You have the opportunity now to take that back, and mind you, Exxon can choose which part they can hand back. They must hand back the 20 percent but they can choose where and the government has decided to do what? It doesn’t make any sense. We should be curious to know what the hell is going on.”

He said that while the Opposition’s call for an evaluation to be made public regarding the merits of the extension is valid, it is important for Guyanese to also be apprised of the value of the 20 percent portion.

Collins is of the view that there is no basis for the extension to be granted since there is evidence that the company’s operations were un-impacted by the pandemic. He therefore concluded, “If this government is going to accept that as a basis, then you can tell me that black is red.”

He added, “As far as we (TIGI) are concerned, we are not disappointed, we are curious as to what is really the motivation for that extension…we don’t know if it’s legal to make such an exception, the law needs to be enquired into.”

The TIGI President added that even if the law allows for government to grant the extension, the administration should be jumping at the first available opportunity to gain more from the Stabroek Block since the deal is not only lopsided but “illegal” given its questionable size.

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• Government, PSA, relinquish, Stabroek, TIGI

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