Every Man, Woman and Child in Guyana Must Become Oil-Minded – Part 83 – January 31, 2020
This Column has finally been able to put its hands on the Bridging Deed referred to in Article 30 of the Petroleum Agreement signed by the APNU+AFC Government and Esso, Hess and CNOOC/Nexen. The Deed, is frightening in its intent and far too clever in its execution, signed more than one year after the oil companies had hit gold. Key players in the Deed, other than the oil companies are the ubiquitous Raphael Trotman, then Minister responsible for Petroleum and Sir Shridath Ramphal, described as the Escrow Agent and keeper of what is described as the Escrow Letter.
According to the Bridging Deed, Sir Shridath agreed to hold the Documents – circuitously described to have the meaning assigned to it in the Escrow Letter, but which is itself a closely guarded secret! It is unclear whether Sir Shridath performed any other functions in connection with the Bridging Deed or the Petroleum Agreement and how he was compensated but if he was paid by the Government of Guyana, it is hoped that in the cause of transparency, particulars of that arrangement will be shared with the Guyanese public.
What the Bridging Deed sought to do
The Bridging Deed sought to give life to the expired 1999 Agreement signed by then President Janet Jagan under the authority of section 10 of the Petroleum Exploration and Production Act. Under that Agreement, Esso was granted a Prospecting Licence over some 26,806 SQ. KM, much more than normally permitted by law. The law allowed for a Prospecting Licence initially for four years plus six months and subject to two extensions of three years each. Unless during that time, there is an application for a production licence, the Agreement lapses, the oil blocks go back to the State.
During the ten year period however some things happened – there was the Surinamese incursion into Guyana’s territorial waters leading to a Force Majeure and the extension of the period of the licence by the duration of the Force Majeure. The information on when the 1999 Agreement expired is a bit blurred but what is known is that shortly after the APNU+AFC came to power in 2015. The other big thing was the late discovery of oil announced in 2015 and the realization by Exxon that its time was fast drawing to a close. It needed to come up with some trick, to do it fast and to hide it.
At the same time, it sought to put pressure on Trotman and the Government to treat the 1999 Agreement as if it never existed and to get a completely new Agreement.
That required legal gymnastics and some clever mind then came up with this idea of a Bridging Deed. Bear in mind that at this stage, the oil companies knew they were sitting on a gold mine but their time had expired or was soon to expire. Someone thereupon advised the oil companies to belatedly relinquish the extensive holdings but to replace it with a “new petroleum prospecting licence and to enter into a new petroleum agreement, in respect of the Contract Area.”
Audacity
Compounding the wickedness, the authors of the Bridging Deed audaciously including as one of the Recitals in the Deed, the following:
“Pursuant to section 10 of the Act, the Minister has entered into this Deed together with the Contractor Parties to set out the process whereby 1999 Licence and the 1999 Petroleum Agreement will be replaced by a new petroleum prospecting licence and petroleum agreement in respect of the Contract Area.”
Section 10 of the Production Exploration and Production Act gives the Minister no power to enter into any Deed and certainly not one to breathe life into an expiring Agreement. In fact, what the section does is grant the Minister the power to enter into an agreement not inconsistent with the Act, (emphasis mine), with respect to any or all of a four specified matters, namely, the granting of a licence, the conditions attaching thereto, the procedure to be followed in exercising any discretion granted to him under the Act and any matter incidental thereto. Perhaps Trotman or some legal luminary will explain how section 10 can be read to give Trotman the supernatural power to revive a dead Agreement via some artificial device.
Burnham weeps
It is hard to be diplomatic about any person who conspires to sell or who sells the national interest whether on the basis of grand incompetence or grand corruption but Trotman, his advisors and the APNU+AFC Government are guilty of the worst act against Guyanese and Guyana. Trotman had a duty to tell the oil companies that their proposal to employ Guyanese nationals as cleaners, drivers and security guards not only did not meet the test of satisfactory to him as Minister but was downright insulting to us as a nation.
Trotman had a glorious opportunity to correct the wrong inflicted by the 1999 Agreement in respect of the number of blocks awarded. At least Janet Jagan could plead that hers was a pre-discovery Agreement but what can Trotman plead? A person of average intelligence aware that oil was found would have insisted of Guyana’s right under section 22 of the Act to an interest in any venture for the production of petroleum in the blocks. Trotman did not.
Trotman could have told the oil companies that the 1999 Agreement had run the clock and that his powers were constrained by law and that relinquishment was not a choice or option open to them. Instead, Trotman allowed himself to be bullied or led into agreeing to relinquishment being conditional on his taking certain action and if he did not, the Notice of Relinquishment by the oil companies would be considered withdrawn and “the 1999 Agreement shall continue in full force and effect.” No, that is not how a sovereign country operates. That thing came to an end and that was it.
This spinelessness demonstrated by the APNU+AFC and Trotman is disgraceful and shameful to us as an independent, sovereign nation. This is as big a sellout of a country’s patrimony imaginable. That this embarrassment is being imposed on Guyana by a Government led by Forbes Burnham’s own Party and people for whom he no doubt had the greatest of respect, must make him weep.
By Chris Ram
Article originally published at: https://www.chrisram.net/?p=2147
