Latest update May 13th, 2024 12:59 AM
May 29, 2022 News
By Davina Bagot
Kaieteur News – As Guyanese across the miles sit in suspense to hopefully rejoice over the news of better terms and financial arrangements, through a possible renegotiation of the present lopsided Production Sharing Agreement (PSA) with US oil major, ExxonMobil, Attorney-at-Law and Chartered Accountant, Christopher Ram has said that challenges to the document is a key option, rather than depend on results that may never yield from holding the Liza One Permit as an opportunity to haul the oil company to the table to secure better terms for the people of Guyana.
Ram, in an invited comment, on Friday told Kaieteur News that the best shot the country has at renegotiating the contract is by successfully challenging the 2016 PSA.
He explained, “The contract is already signed, unless it is renegotiated or some changes are made as a result of court action, the fiscal terms and conditions remain the same…unless this thing is successfully challenged, for the next 40 years we are stuck with the same terms and conditions so it is misleading the public to suggest that we will get better terms and conditions. You can get better terms and conditions either if the government renegotiates for such terms and conditions or if the court rules some of the conditions unlawful and they force a renegotiation.”
To this end, the attorney said he does not believe in using the renewal of the environmental permit to secure better financial gains from the contract. “No. That would be unreasonable. You can’t tie one to the other. You are bound by the agreement. You are bound by the fiscal terms of the agreement. You can’t use an environmental permit as an excuse for trying to get better terms and conditions.”
“Renegotiation requires mutual consent…Esso (Exxon’s subsidiary) has to agree to it and why would you agree to give away what you have? …It’s not going to work. It might be a good try but it’s not going to work,” Ram opined.
In this regard, he said that Guyanese should focus on not only filing legal challenges to the agreement, but channel their energies into succeeding. “The Minister may grant such permit or some extension and it might apply to the particular circumstances in the particular well, but it is subject to the same tax concessions. Don’t let anyone fool you and that is why the case (filed by Kaieteur News Publisher Glenn Lall) is so important.”
Ram holds the view that Guyana can undoubtedly bring ExxonMobil to the bargaining table after successful litigations, rather than use a method that may not be the best.
The Liza One Permit, which was the first to be approved, will expire on May 31, 2022. Several international experts have already advised Guyana to use the renewal of the licences as a means to secure a fairer arrangement for its people. In fact, more than 5000 people from across the world have given this call their support by signing on to a petition that seeks more for Guyana.
During an important Avaaz-hosted webinar on Tuesday last, representative, Martyna Dominiak said that organisation had launched a campaign 48 hours earlier asking its members globally to send in messages directly addressed to the Environmental Protection Agency (EPA’)s Executive Director, Kemraj Parsram, to ensure more benefits for Guyana through the bargaining of the Lisa 1 permit’s renewal. “We decided at Avaaz to launch it because it is very difficult for the people in Guyana to stand against Exxon alone. People are afraid of that and that’s why we want to support them with the power of our global movements.”
In the meantime, Guyana-born International Lawyer, Melinda Janki has reiterated that in the prevailing situation it is really important that people go to court to see that the laws of the country are enforced.
According to Janki, Guyanese must challenge the actions that they don’t like and it is only by publicly challenging Exxon in the courts and publicly coupled with political pressure, then the country can likely see a change. The Liza 1 is the first field to be developed by EEPGL in the Stabroek Block and saw first oil in December 2019. The Floating Production Storage and Offloading Vessel (FPSO)—the Liza Destiny—is fed by a 17 well field.
So far, Kaieteur New Publisher, Mr. Glenn Lall, who has been outspoken against the lopsided deal with the oil company, has filed a legal proceeding to reverse the “discriminatory tax concessions” being granted to the oil company and its partners Hess Corporation and CNOOC Petroleum Guyana Limited. The case, which was prepared and filed by his attorney-at-law, Mohamed R. Ali, outlines that many of the provisions listed under Article 15.1 of the Petroleum Agreement, dated June 27, 2016 between the Guyana Government and the oil companies, grant exemptions to persons other than the licensees, which violate the Petroleum Exploration and Production Act, the Financial Administration (and Audit) Act, the Prevention of Discrimination Act, and the Constitution.
The Auditor General, Deodat Sharma, in his 2020 report highlighted that Guyana lost a whopping $137 million in tax exemptions from the oil sector alone. Also, the Guyana Revenue Authority boss, Godfrey Statia, has already warned that these deductions will continue to increase, unless policy changes are made.
The matter, which ExxonMobil subsidiary, Esso Exploration and Production Guyana Limited (EEPGL) joined as a respondent, is set for continuation before Justice Nareshwar Harnanan at the High Court in Georgetown on August 12, 2022.
As such, Lall’s Attorney is expected to file submissions in response to the defence brought by the Government and EEPGL on or before June 3 while the respondents, Government of Guyana and EEPGL are expected to file their answers by July 1.
All final written arguments are scheduled to be filed by July 29 and August 12, 2022 is set for oral arguments.
On August 12, attorneys from all sides will be given at least 20 minutes to present their case before the court, after which the court is expected to rule on September 9, 2022.
Listen how to run an oil country
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