Every Man, Woman and Child in Guyana Must Become Oil-Minded – Part 84 – February 4, 2020
This Column regards the Bridging Deed conceived by some artful legal mind as going to the heart of the 2016 Petroleum Agreement – one of the first major economic acts of the Granger Administration. The handmaiden for the transaction was Mr. Raphael Trotman in his capacity as Minister of Natural Resources while its custodian or guarantor was Sir Shridath Ramphal. In an article in the Kaieteur News of February 1, 2018 seeking to justify the Administration’s refusal to make the Deed public, Trotman claimed that he needed to consult Sir Shridath Ramphal on the release of the document. He volunteered that there was nothing sinister about the Deed (with a capital “D”) and that Ramphal was selected as its guardian because the Government and Esso had confidence in him as a good person. In the subsequent two years, Trotman has been eloquently silent.
Column # 83 published last Friday revealed things about the Deed that challenge Trotman’s language. Because of my assessment of the Deed’s fundamental importance to the country, I sought and obtained the agreement of the senior editorial management of the Stabroek News to carry three columns this week – Tuesday, Thursday and the concluding piece on the usual Friday. This first part is descriptive not judgmental, objective rather than subjective, narrative rather than critical. That was also the approach I took when in the earlier segments of this series of columns I dealt with the Agreement proper.
Here are some of the key elements of the Deed.
It was made on 29th. June 2016 and had four parties: the Government of Guyana and three oil companies – Esso Exploration and Production Guyana Limited (Esso), Hess Guyana Exploration Limited and CNOOC Nexen Petroleum Guyana Limited. They listed as their countries of incorporation Bahamas (Esso), Cayman Islands (Hess) and Barbados (CNOOC Nexen) and their registered office 62 Hadfield and Cross Streets, Georgetown, Guyana.
The Contract area is described as the Stabroek Block, “being the area covered by the 1999 Agreement”.
The Deed appoints as Escrow Agent Sir Shridath Ramphal of a Barbados address. It refers to an Escrow Letter dated the same date as the Deed sent from the Escrow Agent to the four Parties. The letter sets out the terms of the Escrow Arrangement whereby the Escrow Agent holds the Documents on behalf of the parties “subject to the satisfaction of certain conditions”. The terms “documents” and “Escrow Conditions” are defined only as having the meaning set out in the Escrow Letter.
The Deed is signed by Minister Raphael Trotman for the Government while the same persons who signed the 2016 Petroleum Agreement signed the Deed for the oil companies. There were two witnesses to each signature to the Deed while a single and different person signed as witnessing the execution of the Petroleum Agreement. The Agreement was made on the 27th of June 2016 and the Deed was made on the 29th of June 2016.
In terms of contents, there is the Deed proper which runs to twelve pages. The Deed has the following attachments: Schedule 1 – Form of Notice of Intent to Relinquish; Schedule 2 – Form of Relinquishment Notice; Schedule 3 – Form of Regulation 28 Application; Schedule 4 – Section 51 (1) Modification (by Minister of Finance); Schedule 5 – Form of New Licence Application; Attachment “A” – Application for Petroleum Licence concerning the expired Stabroek Licence Area; and Part B – Form of section 14 (2) (a) Notice acceptance of conditions for the grant of a licence.
Action/Decisions required under the Deed
A – On the signing of the Deed
- Parties to procure that the Escrow Agent sign Escrow Letter and Parties to countersign the Escrow Letter.
- Parties to sign and deliver six copies of New Petroleum Agreement to the Escrow Agent for Registration at Deeds Registry. Minister was required to retain one of the Originals, a copy of which was to be provided to the National Assembly as part of the section 51 of the Petroleum Act with respect to taxation.
- Oil companies to sign but leave undated two originals to the Relinquishment Notice and New Licence Application and deliver the signed originals to the Escrow Agent.
- The Minister to sign and deliver to the Escrow Agent two undated originals of the section 14 (2) (a) Notice. Section 14 (1) deals with the notification of the granting of a licence while 14 (2) (a) deals with the acceptance of that licence; and
- Esso on behalf of the Contractor Parties to sign and deliver to the Escrow Agent two undated originals of the Section 14(2)(a) Notice.
B. Within five business days from the date of the Deed
- Oil Companies to sign and deliver to the Minister a Notice of Intent to Relinquish with intended Relinquishment conditional on the following:
- The receipt of dispensation form Minister pursuant to Regulation 28 application. This regulation deals with modification of requirements in relation to the keeping of records, the surrender of records, and the maintenance of accounts.
- The National Assembly to approve an Order under s51 (1) of the Petroleum Exploration and Production Act, modifying certain specified tax laws to the Oil Companies, and the gazetting of the Order.
- Esso on behalf of the Contractor Parties as well as the Minister to deliver Confirmation Notices pursuant to clause 4.2 of the Escrow Letter before the Escrow Termination Date. In the absence of the Escrow Letter it is not possible to ascertain other than by speculation what clause 4.2 is all about.
- Following which the Minister to deliver to them, within thirty Business days, confirmation note that Regulation 26 will be dispensed.
- Before delivering the Confirmation Notice to the Escrow Agent, the Minister to give Oil Companies no less than five Business Days’ notice of his intention to do so.
- Parties to coordinate with Escrow Agent to arrange a suitable Completion Date following satisfaction of the Escrow Conditions. The Deed defines the Completion Date to have the meaning given in the Escrow Letter.
Column 85 to be published this coming Thursday will discuss some of the contents of the Deed.
By Chris Ram
Article originally published at: https://www.chrisram.net/?p=2149
