Feb 05, 2020 News
Minister of Natural Resources, Raphael Trotman, is at the centre of controversy surrounding Guyana’s poorly negotiated deal with ExxonMobil, Hess and CNOOC for the re-ignition of the expired Stabroek license.
A widely discussed Global Witness report levels sharp criticisms at him, but he has told the New York-based publication, Bloomberg, that he is preparing to release a report about the signing of the unpopular deal.
It was during a recent press conference that Opposition Leader, Bharrat Jagdeo, told reporters that he received information of the Government’s hiring of the firm to purportedly discredit the Global Witness report. This suggests that the Government started to prepare early on and anticipated that Global Witness would not compliment its handling of the negotiation process, as it hired a firm to prepare the report since September last year.
In a statement, the British law firm, Clyde and Co reported that it was retained by the Government of Guyana to conduct an independent investigation, and prepare a detailed assessment of the process which led to the signing of the new agreement in June 2016. Clyde and Co said that it completed the investigation and subsequently submitted a report to the Government on January 30, 2020.
Kaieteur News has seen the report’s executive summary and key conclusions, which paint Trotman in a much less critical light than the globally respected anti-corruption watchdog, Global Witness, did.
For instance, the Clyde and Co report states that the Government saw a strategic relationship with Exxon and its partners as important for the development of the sector. It states that Exxon’s local subsidiary, Esso
Exploration and Production Guyana Limited (EEPGL) and its Chinese partner, CNOOC, acted as deterrents to Venezuela. On the other hand, Global Witness said that the dispute with Venezuela cannot be used as adequate justification for the exploitative nature of the Stabroek deal.
The Clyde and Co report, authored by partners Philip Mace and David Hesse, found no evidence that the steps taken by Trotman were inconsistent with the Petroleum (Exploration and Production) Act and the regulations. But Attorney-at-Law Christopher Ram has already brought the legality of the Bridging Deed, which seeks to give life to the new agreement, into question. Ram said that the Act gives Trotman no legal authority to enter into such an agreement. The previous agreement had already reached its end, and the relinquishment of some of the acreage was supposed to be executed in accordance with the Act.
The Clyde and Co report states that both the Ministry of Natural Resources (MoNR) and the Geology and Mines Commission (GGMC) made several attempts to negotiate improved terms for Guyana, and that the Exxon-led consortium was “not receptive” to the proposed amendments.
“It objected to most of the MoNR’s and GGMC’s [proposals,” the Clyde and Co report said.
It also said that it is likely ExxonMobil strongly advocated for the new agreement to be signed before the Government could get details which would reveal to them, the “world class” nature of Exxon’s second discovery in the Liza field. This is because the Government would have had a stronger negotiating position if it knew.
But Global Witness stated that Trotman, by not waiting a few days, failed to capitalise on Guyana’s strong bargaining position. It said that he knew the country was analysing a new oil find, and that he thought it would announce its results on a specific day.
“But the Minister did not wait for these results, which would have allowed Guyana to assess Stabroek’s true value and which turned out to be one of the world’s largest recent finds,” Global Witness revealed.
The Clyde and Co report’s key conclusions section states that its “understanding” is that all the relevant documentation was filed with the Deeds and Commercial Registries Authority. However, the section did not say whether those documents were filed immediately, or whether they were filed at all. What is known to the public, is that the Stabroek Block Production Sharing Agreement (PSA) took a year to be released to the public, and the Bridging Deed took four years before it was leaked to the media. The ‘escrow letter’ mentioned in the deed remains elusive.
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