Dear Editor,The response by the Department of Energy to grave concerns expressed about the invitation to select petroleum companies to Guyana for face-to-face meetings is disingenuous.There is no need to sell Guyana’s share of profit oil directly. The share should be sold by the operator and should fetch the same price as the operator’s share. The price garnered for ExxonMobil’s share will be declared publicly to its shareholders and is a transparent, trusted and audited process. ExxonMobil cannot and will not lie to its owners (shareholders) and is closely monitored by capable institutions such as the US Securities and Exchange Commission (SEC). The same cannot be said for the process outlined by David Granger’s Department of Energy (DE).The DE is being facetious when it suggested that “The short-term first phase beginning this week will focus on setting national benchmarks for selling Guyana’s portion of its crude in the future”. One, the benchmark will be set by the sale of the oil lifted before our turn comes and two, each batch of oil is quality tested and sold according to those results.The DE confirmed that “Selected companies are invited to bid to buy Guyana’s product in the very short term”. The obvious question is why? Oil is sold on the world market daily, there is no advantage to pre-selling oil of unknown (but expected to be very high) quality. Should we, for example, accept a price US$2 higher than Brent Crude per barrel, it would seem a good deal unless the quality is higher and the world market price would be Brent plus US$8. In such a scenario, Guyana would have lost US$18 million due to undue haste. Given the present ravaged state of the Treasury, it is a risk we can ill-afford to take.Then there is the issue of “selected companies”, the DE stated that “This strategy was employed upon serious consideration of advice given by an international team external to the DE”. The DE gave us titles of persons but significantly fails to name anyone. The DE gave us a lengthy three-point explanation of the ‘logic’ employed in reaching the decision to adopt a self-described “novel approach” – an examination of the three points is revealing.In point one, the DE said the quality of the crude is not yet known. This is patently false; ExxonMobil has signalled that the crude is expected to be higher than the benchmark Brent. However, each shipment of oil is graded onboard the FPSO rigorously, oil companies do not buy or sell ‘pig in bag’. Any sale before testing is going to be below real value as companies will claim ‘risk’. Absolute hogwash!Point two states “The DE has been advised, by the Crude Marketing Specialist, that in order to take Guyana through this limited short-term phase, a few high-quality IOCs with a global refining footprint and integrated oil value chains would be best given an opportunity to support the DE during this incubation and launching phase”. Guyana needs to get the best possible price for its share of profit oil, what it seems to have gotten is high-priced ‘con-sultants’. Keep it simple stupid should be a mantra over at the DE; it seems they are easily confused or misled. Is Kevin Granger an advisor on the ‘international team’? is it a team or a gathering of cronies?Point three of the DE’s response states “Guyana’s main incentive in taking this approach is to establish a norm in terms of quality standard and quantity availability so as to prevent any possible down-pricing”. Again, if or quality is low, it will be tested before lifting and priced according to world prices, same if it is high, every shipment will be tested and priced this way, in a very open and transparent process. That is unless we deviate from the norm during the ‘face-to-face’ meetings.The DE asserted that there is no untoward motive hidden in the request for face-to-face meetings and then, only with ‘selected’ companies, but I would suggest that when men with guns and masks are in our house, Guyanese do not have to wait to be robbed to know that they are bandits. We also know ‘salla-walla’ when we see it.Respectfully,Robin Singh
In what can be considered as bowing to public pressure after months of mounting concerns and speculation, the coalition Government has finally announced that it would be releasing the contract with US oil giant ExxonMobil this month.This was revealed by Minister of State, Joseph Harmon at the post-Cabinet press briefing on Thursday.According to Harmon, the issue was discussed at Tuesday’s Cabinet meeting during which an agreement was made to have the crucial document released within the next month.“The Exxon contract with the Government of Guyana would be made public in the month of December and, that is, the contract with all its terms and conditions,” he said.While the State Minister did not mention a specific date when the document would be made available for public scrutiny, he did note, however, that this decision was made after Cabinet’s “fulsome discussion” on the matter and after taking into consideration the many public calls.“We’ve taken all of the issues into consideration and we also recognised that there is a need expressed by our population for greater inclusiveness, for more information to be provided and we take those into consideration as well,” he said.The Minister continued that, “…we listen to the people and we are not deaf to the concerns that have been expressed by various sections of our community, and we believe that it is important that we take the public into our confidence with respect to not only this contract but other contracts which might affect our dealings with other companies in relation to the natural resources – the national patrimony.”Over recent months, several key stakeholders and civil society bodies have been pressuring Government to release details of the new contract signed with the US oil giant.Both Government and ExxonMobil had noted various concerns for keeping the document confidential.In the interest of Guyana: one of the reasons Government had given for the non-disclosure of the contract was the ongoing border controversy with neighbouring Venezuela. Natural Resources Minister Raphael Trotman had stated back in March that in the event of the controversy not being settled via the current Good Officer process, then the issue would be taken before the International Court of Justice (ICJ) and as such, Guyana needs to be cautious about the information it puts out.However, when asked about the implications that the impending contract release would have on the border controversy mediation process, Harmon told media operatives that this issue would be dealt with at the appropriate time.During a speech earlier this year, Trotman had stated that there was no need for Guyana to be making full disclosures about its contract with ExxonMobil, saying “full disclosure will not be to the national benefit or interest”.“We have no reason to go right now and expose all our business to the world when we don’t even have the resources actually in hand. Let’s get things in our hand, then we can go out and shout what we have,” the Natural Resources Minister had said in March when he revealed that Guyana was to receive two per cent royalty on gross earnings and 50 per cent of the profits of the oil proceeds when production starts in 2020.Meanwhile, when contacted, ExxonMobil Guyana’s Public and Government Affairs Senior Director, Kimberly Brasington could not say specifically whether the company was informed beforehand of Government’s intention to release the contract.In an invited comment following Government’s announcement, Brasington told Guyana Times : “ExxonMobil supports transparency initiatives wherever we operate around the world. We look forward to discussions with our partners and the Government with regard to Guyana.”Among those calling for the release of the contract between Government and ExxonMobil were the Opposition People’s Progressive Party (PPP) and its leader, former President Bharrat Jagdeo, who, on many occasions, had called out the coalition regime for backpedalling on reasons given for not disclosing the document.Other bodies such as Transparency Institute of Guyana Inc (TIGI) and the Working People’s Alliance – one of the parties that make up the majority party in the coalition Government, A Partnership for National Unity (APNU) – has also made calls for the contract to be made public.