Opposition sees potential delay in knowing beneficial owners of oil blocks – Opposition Economist

Mar 14, 2023 News

---

Guyana’s suspension from EITI…

Kaieteur News – With Guyana being temporarily suspended from the Extractive Industries Transparency Initiative (EITI), the Opposition believes there is little hope for citizens to ever know the true beneficiaries of the Oil Blocks that have so far been awarded, as well as the 14 that are to be auctioned.

When Guyana signed on to the global EITI body in 2019, it agreed, among other things, to publish a register of the beneficial owners that are involved in exploration or production of oil, gas or mining activities. Requirement 2.5 (a) of the EITI standards state, “It is recommended that implementing countries maintain a publicly available register of the beneficial owners of the corporate entity(ies) that apply for or hold a participating interest in an exploration or production oil, gas or mining license or contract, including the identity(ies) of their beneficial owner(s), the level of ownership and details about how ownership or control is exerted.”

It goes on to point out that “where possible, beneficial ownership information should be incorporated in existing filings by companies to corporate regulators, stock exchanges or agencies regulating extractive industry licensing. Where this information is already publicly available, the EITI Report should include guidance on how to access this information.”

Section 2.5 (c) explains that as of January 1, 2020, implementing countries are “required” to request, and companies publicly disclose, beneficial ownership information.  More importantly, Section 2.5 (d) points out that information on the identity of the beneficial owners should include names, nationality, country of residence and identify “politically exposed persons”. It is even recommended that the national identity number, date of birth, residential or service address, and means of contact are disclosed.

The EITI standard defines a beneficial owner as the person(s) who directly or indirectly ultimately owns or controls the corporate entity. Given the heavy requirements of the Extractive Industries Transparency Initiative, the Opposition says Guyana’s suspension will further bury these details from ever reaching its citizens.

Economic Advisor to the Leader of the Opposition, Elson Low explained recently, “Guyana’s suspension from the EITI will mean that for the upcoming oil block auction, the country will have no idea as to the beneficial owners of any company awardees. This means that the People’s Progressive Party could award the oil blocks to themselves and Guyanese would be left in the dark. The government must commit to releasing all beneficial owner information for any awardees.”

He said the government has a prolonged history of secretly managing the oil and gas sector as is evident in what the Opposition believes is its refusal to release the audit findings of ExxonMobil’s multibillion US-dollars expenses.

In addition to this, he reminded that the administration is yet to release the new model Production Sharing Agreement (PSA) that will govern future production activities in the other prospective oil blocks.

More alarmingly however, Low said the government has refused to release the agreements it signed with the oil giant to facilitate the US$2 billion Gas-to-Energy project, the single largest financial venture ever pursued by the nation.

To this end, he said, “The PPP has demonstrated a clear pattern of unnecessary and malicious secrecy in the management of the petroleum sector. If Guyanese are not careful, we are faced with the real possibility of the government awarding the oil blocks to themselves in the upcoming auction.”

On February 23, it was reported that Guyana was suspended from the EITI body after it failed to submit a report documenting revenues received by the state from the extractive sector for the period 2020. EITI on its website said that Guyana is not eligible for an extension of the reporting deadline for fiscal year January 2020-December 2020. It said too that the deadline for the publication of the outstanding report remains December 31, 2022.

President Irfaan Ali in a video statement however explained that the country has an extension for submission in May 2023 from the EITI Secretariat. He pledged that this would be met. The Head-of-State also shared his understanding of the root cause for the suspension. Ali said: “I have made it clear that it is unacceptable to have a delay in the submission of the report. Notwithstanding, the fact that an extension was given by the EITI secretariat for it to be completed by May this year, we still should have been in a position to have the report submitted.” He vowed to expose and hold accountable, those individuals who are responsible for the country’s temporary suspension from the body.

---

• Auction, beneficial owners, EITI, Oil blocks, suspension

---