A lot of attention is focused on the oil sector, as has been the case ever since President David Granger released the oil contract. For starters, the nation was made aware of the earlier contract signed by the PPP administration.
At the time, the nation was in the dark, because the trend was not to release contracts. The public would ask till they got blue in the face, but the government would talk about confidentiality clauses. The public did not accept the excuse, but there was nothing that the people could do.
I remember the numerous press conferences at which the media would seek answers to the contract, but none would be forthcoming.
I remember the smirk on the face of Winston Brassington whenever the question arose about the contracts. Granger was not secretive; he always spoke of transparency and he kept his word.
Suddenly the critics came out. And not surprisingly, the new government became a target. It had been able to get modifications to the existing contract, even though ExxonMobil would say that it could have ignored the request because the contract was in force.
The critics said that the government should have sought the cancellation of the contract – something that everyone, including the international community, said was a no-no. They all insist that contracts are sacrosanct; that people should respect the sanctity of contracts.
But things are heading in another direction. Transparency International Guyana Inc. (TIGI) said in its report the agreement with Exxon Mobil is illegal at its very root, irretrievably flawed, i.e. incapable of being salvaged.
The flaws in the contract seem to be the award of a large number of oil blocks to ExxonMobil. The laws suggest that an oil exploration company should be awarded no more than sixty oil blocks. However, President Janet Jagan awarded ExxonMobil 600 oil blocks.
I spoke with many people in the PPP administration and found out that in the first instance there was not much hope of anyone finding oil in Guyana. There have been explorations for decades. I remember in 1973, at least I believe it was in 1973, that Home Oil made a discovery inland Guyana.
Guyana became excited, but within days the well dried.
The oil companies surmised that with oil in Venezuela, Brazil, and in Suriname, there must be oil in Guyana. So the search continued.
There were many companies, including Shell. CGX was exploring all the time as was Shell’s partner, ExxonMobil. Things must have seemed hopeless, because Shell sold out its share in the Exxon block for one dollar. That company must be kicking itself.
That is why the people who signed the original contract contended that the contract was just a case of going through the motions. No one in Guyana expected to find oil. Notwithstanding that TIGI is insisting that the contract is illegal. It is arguing that regardless of the situation, there should not have been the excessive award of the oil blocks.
“There can be no sanctity of an illegal contract,” says TIGI.
What is of interest is that no one paid any attention to what was going on in the past. The illegality occurred way back in 1999. We said nothing because we knew nothing. We were oblivious to what was going on. Today there is a lot of hindsight. We all talk about what should be done.
There is another aspect of the drive for Guyana to capitalize on the opportunities created by the discovery for oil. Trinidadians are coming to Guyana and not only setting up enterprises to capitalize on the opportunities, they are also buying up property.
Guyanese businessmen should have been doing this. In the first instance, when Exxon announced its oil discovery, the local business community should have been approaching people in the know to ascertain the areas in which they could invest.
For example, one local businessman with foresight set up a waterfront establishment, because he knew that the foreign oil company would need onshore facilities. He is only one. Others simply sold out their waterfront property to whomever would pay.
Perhaps the time has come for the government to institute legislation that would prevent foreigners from buying property in Guyana.
In China, no foreigner can own property, regardless how long the foreigner lives in that country. But in Guyana where the aim is to attract foreign investment, I suppose the intention is to create favourable conditions for the foreign investor.
The Trinidadians are coming in droves. They have knowledge of the needs of an oil industry – that country having been involved in that sector for more than one hundred years. And as an aside, Trinidad’s oil contract remains a secret, at least undisclosed to the public.
It is true that these companies create employment for Guyanese, but it is much better when such companies are in Guyanese hands. Not only would they employ Guyanese, but all their earnings would remain in this country.
Of interest is the position being adopted by former President Bharrat Jagdeo, who was in the thick of things when the oil blocks were being handed out. He now wants a private investigation of what he and his party did.
It is as though he was a passive bystander, a stranger to all that went on before. But at the same time he talks about honouring the sanctity of contracts. So he wants to look at what went on before, but insists that nothing should be changed.
The one saving grace is that all contracts could be renegotiated. Trinidad’s Keith Rowley recently successfully renegotiated the Liquid Natural Gas contracts. This was a gas that was actually given away. Trinidad got little or nothing, because the focus was on oil.
It took a long time for the renegotiation but this has been done. Guyana is still new to all this, but it has been made aware of what if should get. The contract with Exxon does talk about renegotiation. This should be done sooner rather than later.
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