Govt. and Opposition should urgently agree on national negotiation team for oil blocks - Dr. Vincent Adams

Govt. and Opposition should urgently agree on national negotiation team for oil blocks – Dr. Vincent Adams

Nov 29, 2023 ExxonMobil, News, Oil & Gas

In absence of Petroleum Commission…

Kaieteur News – As Guyana prepares for negotiations with petroleum companies that successfully participated in the country’s inaugural bid round, former Executive Director of the Environmental Protection Agency (EPA), Dr. Vincent Adams is calling for a national negotiation team to be urgently set up.

Former Executive Director of the Environmental Protection Agency (EPA), Dr. Vincent Adams

Ideally, a competent Petroleum Commission would have executed the functions of the negotiation team to ensure the nation’s interests are protected during the process, however, the delayed establishment of this body warrants the need for skilled negotiators to engage with the petroleum companies.

Former Minister of Natural Resources, Raphael Trotman who inked the 2016 Production Sharing Agreement (PSA) with American oil major, ExxonMobil had revealed in his recent book that the company pressured the administration into signing the contract. In fact, this was emphasized by British law firm Clyde and Co, that was hired by the former government to probe the circumstances that led to the agreement being signed.

Stakeholders have often questioned the capacity of elected members of government to engage in contract negotiations. Prominent International Attorney-at-Law, Melinda Janki had previously argued that government should not be participating in any such activity but rather, competent negotiators.

While there remains to be controversy surrounding the lopsided agreement with Exxon, Dr. Adams said measures should be taken to avoid a recurrence of this.

The former EPA Head believes there must be consensus between the government and opposition members on the negotiation panel that would engage the petroleum companies.

He explained, “There is no question we do not have the capacity; what I can tell you is we have the skills in the diaspora and for every single job I can get members of the diaspora because of that brain drain that we have. If we were sensible and had any concern for this country, we should be turning that brain drain into a brain gain.”

He continued, “We have no capacity to do it in Guyana so what we should be doing is say well okay both parties get together and decide on a team.”

Dr. Adams, a Petroleum and Environmental Engineer, was keen to note that this could limit corruption in government and moreover produce fruitful engagements with petroleum companies to benefit the country.

Beyond contract negotiations, Dr. Adams pointed out that this team could draft a strategic plan for the country and ensure that priorities are funded and implemented in Guyana. This strategic plan, he pointed out could be amended from time to time, however it would avoid the misuse of funds by randomly “pulling projects from the sky”.

With negotiations set to commence soon with the successful participants of Guyana’s maiden bid round, the former EPA Head called for government and opposition to urgently agree to setup a competent negotiation team, as the Petroleum Commission is yet to be established.

“Absolutely, it wouldn’t have the same powers but what it would have is enable us to get better for our resources and we would be able to hold those people accountable. We should be doing this right now because these government officials are running from the questions, especially in this petroleum sector, they don’t want to address the difficult questions and they are going to move forward and they don’t care a damn about Guyanese and what we want,” he said.

Guyana’s oil blocks auction

President Irfaan Ali, on December 9, 2022, announced the commencement of Guyana’s inaugural bid round for 14 of its offshore oil blocks, estimated to hold more than 10 billion barrels of oil.

It was only in September this year that it was revealed eight of the 14 areas received bids from six bidders.

Government has said the new blocks would be subjected to a more stringent fiscal regime that demands the payment of a 10 percent royalty, 10 percent corporate tax and signing bonuses, to name a few.

ExxonMobil, though it expressed interest in auction said it was not comfortable with those terms. Vice President Bharrat Jagdeo had however indicated there will be no negotiations on the fiscal terms but will allow minor amendments that does not weaken the accountability and transparency clauses.

Commission, negotiation, oil, petroleum, team

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