ExxonMobil and the other major oil companies operating offshore Guyana will heavily influence the result of the March 2, 2020 General and Regional Elections. They may even definitively be the ones to decide who assumes the presidency.
This was the view shared by Activist, Ramon Gaskin, when he appeared on a special segment of Kaieteur Radio’s Guyana’s Oil & You, last Monday.
Due to the incidents following the No Confidence Motion of December 21, 2018, Guyana faced months of political uncertainty about when elections will be held and about Government’s respect for the Constitution. Though elections will be held in March, the International Monetary Fund (IMF) has assessed that Guyana is likely to receive its 1,000,000 barrels of oil a month earlier.
But the Activist also said that Guyana is just not ready for Production. That has been echoed by several other commentators.
Asked whether he believes that the political uncertainty has affected preparations for First Oil, Gaskin said that the real question that should be asked is whether preparations for First Oil have affected the political system; and he believes that it does.
He explained that the political situation has not affected ExxonMobil at all. The company will push forward with production. And it can’t be stopped. A provision of Government’s agreement with the oil major would require Guyana to compensate it for any losses caused by a suspension of its operations by Government.
Gaskin pointed to other oil producing nations that have done business with ExxonMobil and other oil majors. He believes that, because Petroleum operations tends to amount to a significant portion of a country’s yearly revenues, they tend to use their influence to ensure that the country’s politics play out in their favour.
“And it wouldn’t be any different in Guyana.” He said.
He added that Guyana will become “Exxon country” in the same way that Angola and Equatorial Guinea are “Exxon country”.
According to the Central Intelligence Agency (CIA)’s World Factbook, Angola’s oil sector accounts for about 50% of Gross Domestic Product (GDP), more than 70% of government revenue, and more than 90% of the country’s exports. The source also states that exploitation of oil and gas deposits, beginning in the 1990s, has driven economic growth in Equatorial Guinea; resulting in an upward revision of the size of the economy by approximately 30%.
In Guyana’s case, the IMF has determined that about 40 percent of Guyana’s GDP will come from Petroleum operations, but noting that most of that wealth will not impact on the domestic economy.
“It cannot be different here. Why would it be different here? They will dominate the economy. They will be close to the politicians, and they will influence the elections and the results… They will influence everything in this country. They may even have a strong say in deciding who wins what at what election.” Gaskin said.
He posited that Guyana just doesn’t have skilled, experienced and aggressive enough persons to “deal” with International Oil Companies (IOCs).
The activist made specific reference to the Production Sharing Agreement (PSA) governing the Stabroek Block. The agreement has provisions that have drawn the ire of several international experts on Petroleum-related matters, civil society and the general public.
Some of those provisions, Gaskin said, should be attributed to ignorance and incompetence.
Other provisions, Gaskin said, are inconsistent with Guyana’s Petroleum Law. He posited that there are 12 inconsistencies between the contract and the law, which will form the basis of a challenge he intends to file in Court, via a Judicial Review. That challenge, he said, will be filed before the end of this month.
There is also another challenge in the Court, which involves Gaskin. He had argued that Government was wrong to give two out of three operators on the Stabroek Block the permission to operate, without getting environmental permits from the Environmental Protection Agency (EPA). ExxonMobil’s subsidiary and the lead operator on the block, Esso Exploration and Production Guyana Limited (EEPGL), is the only operator that got a permit from the agency.
“I could deal with them… I’m not a weakling,” Gaskin said.
The litigant is now awaiting a ruling.
He said that actions of Government officials from 2015 to now have already set the precedent for the IOCs’ influence to take hold, with specific reference to Minister of Natural Resources, Raphael Trotman.
He was responding to an incident during which the Minister had been questioned about why he signed an agreement with Tullow Guyana B.V. for the Orinduik Block, allowing the company to recover the one percent royalty. Trotman had responded, saying that he was instructed to sign the contract; a response that met much disapproval as he is the subject Minister for Petroleum.
“But they can’t put things in front of me for signature. That could never happen.” Gaskin said.
He said that Trotman has to answer for his actions, but he still believes that, at this point, Guyana’s road to becoming “Exxon country” is extremely unlikely to be stopped.
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