Kaieteur News – Vice President, Bharrat Jagdeo, should cease the blow-blow politics. The people of Guyana are not interested in any monthly or daily reports of oil production; they are interested in knowing what measures the government will put in place to ensure that what is being declared is what is actually being produced.
What possible benefit can citizens obtain from information about how many barrels of oil Exxon says it is producing? What the people want to know is whether more oil is being produced than what the oil companies are declaring.
At present, Guyana has no way of independently verifying what is being produced. The country has to take the word of the oil companies.
And this is a woefully unsatisfactory state of affairs, which is compounded by the fact that Guyana has to give Exxon one week’s notice in order to observe the petroleum operations and is not allowed to interfere with the operations. With such oppressive provisions, it is not sure how Jagdeo intends to verify the production data provided by Exxon.
Jagdeo himself has expressed reservations about the long notice which is required to be given. He is reported to have said during a discussion on Kaieteur Radio, “I do have problems with making it seem as though Exxon has sovereignty within a sovereign nation. I do have problems with that kind of configuration. He went on to state that “some parts, wording of the contract confers or creates that impression that they have sovereignty over the country.”
The notice which Guyana has to give to the oil companies has been described as being restrictive. Jagdeo, however, said that it was only reasonable that companies be notified of the intent to audit or inspect. He said any business would expect to be provided with notice. However, he went on to state, “I have issues with the long-term notice, because we are a sovereign country and companies that operate here must comply with our law.”
But if he was as concerned as he claims he was about long-term notice, he needs to tell the Guyanese people what he did about it during the negotiations over the permit for the Payara Field Development Plan. As far as reports go, the nation has not been told that the country is now free to assert its sovereignty over local oil operations. Jagdeo should state why he did not revise the prior-notification period.
The Production Sharing Agreement does not only require advance notice in order to observe operations. To add insult to injury, if the government wants to observe the operations, it has to bear the cost associated with doing so. This too is an affront to Guyana’s sovereignty.
Jagdeo should explain whether during the negotiations over Payara, if he attempted to change those conditions. The nation wants to know whether the Minister is still required to bear the cost of inspecting the petroleum operations.
In making this commitment to make public production data, Jagdeo appears to be overlooking the confidentiality terms of the contract. The Production Sharing Agreement specifies that all production data is considered confidential. It insists that before any data is published, reproduced or disclosed in any way whatsoever, that both parties have to agree to this. Jagdeo therefore does not have the authority to release any production data unless Exxon gives his permission.
Not only are there limitations on observing petroleum operations but these also extend to audits. As was reported earlier this year by this newspaper, the Production Sharing Agreement states that the Minister may audit, examine and verify, “at reasonable times during normal business hours but not more than once per Calendar Year, all charges and credits relating to the Contractor’s activities under the Agreement and all books of accounts, accounting entries, material records and inventories, vouchers, payrolls, invoices and any other documents, correspondence and records necessary to audit and verify the charges and credits.”
Yes, no more than once per year! Can the Vice President therefore inform this nation whether there have been any changes to this arrangement since his government came into office and if no, why not? Is the once a year restriction not a further affront on our sovereignty?
What Guyana needs is a nerve centre linked directly to the production operations. Such a centre would allow for real time monitoring of production and real time auditing.
Such a system exists in Saudi Arabia. Should such a system be brought to Guyana, there would be no need for the Vice President to be getting excited about revealing unverified production data to the public. And while he is in his transparency mode, perhaps he can make public the review which was undertaken by the Canadian expert.
(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper.)
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