Oct 24, 2020 News
“The fleecing of Guyana ” Series…
Kaieteur News – On March 4, 2015, former President and Minister of Petroleum, Donald Ramotar, signed away the Canje block to Mid-Atlantic Oil and Gas, agreeing that if the owners of the block were ever to make donations or contributions to organizations in country, they can request Guyana to repay every cent.
In Annex C of the Contract, which speaks to Accounting Procedure, it states that “donations and contributions to organizations in Guyana” are “cost recoverable only with Approval of the Minister”.
In effect, for any donation the oil companies make, Guyana is footing the bill.
Such donations would fall under a company’s Corporate Social Responsibility (CSR), constituted by any charitable and philanthropic giveaways. In this regard, any material donated to an orphanage or school, or funding for local sporting events, such as cricket matches, could be recovered by the companies owning the Canje block.
When Ramotar signed the contract, the award went only to Mid-Atlantic. Since then, ExxonMobil, JHI Associates and Total SA have also farmed in.
All four of these companies sponsored the Guyana International Petroleum Business Summit and Exhibition (GIPEX) at the Marriott Hotel in Kingston last year. That sponsorship is recoverable.
ExxonMobil and JHI Associates both sponsored the Guyana Amazon Warriors for the Hero Caribbean Premier League cricket last year, and are sponsors this year as well. They can request that money be repaid to them by the Government.
The Queen’s College 2019 Math Institute Summer Camp that Mid-Atlantic sponsored could appear as a line-item for the company to be repaid for, as well.
These mentions make up only fragments of what oil companies spend on CSR.ExxonMobil alone had said mid-2019 that its total donations under CSR in Guyana since 2015 had reached US$3.6M. All of that is recoverable. Every other line item that oil companies recover under their agreement lessens Guyana’s share of the revenues from the sale of its oil.
This adds to the list of poor provisions in the Canje contract which result in severe revenue losses for Guyana. Kaieteur News’ coverage in the past week has found that Ramotar agreed that the Canje owners would pay no taxes.
He specifically also agreed to charge them no capital gains tax. So even though 87.5 percent of the block was sold by the original owner, Guyana did not benefit. Despite Mid-Atlantic making a lot of money off its sale of the block, Guyana got no signing bonus when it signed the block away to Mid-Atlantic.
Ramotar gave Mid-Atlantic the right to explore despite the company having no insurance to foot the disasters which occur in this industry. He also agreed to indebt Guyana GY$100M in pre-contract costs to the company, with no explanation of what the money is for. He also agreed that Guyana would repay every cent of the one percent royalty rate in the contract.
There are many more lopsided provisions in this award, signed away by Ramotar and advised by former Minister of Natural Resources, Robert Persaud. Just weeks before the 2015 General and Regional Elections, Ramotar handed the Canje block to an inexperienced company with no capability to acquire and develop the ultra deepwater block. The award and its subsequent farm-ins are wrought with red flags, but the government remains silent on the matter, for which its numerous red flags warrant investigation.
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