…Gov’t insists full release of Exxon contract has wide implications

MINISTER of Natural Resources, Raphael Trotman said government has been advised by external advisors and lawyers that it should not release the full contract with United States (U.S.) oil giant, Exxon Mobil, noting that a number of extenuating and external issues are being attended to, some of which have foreign affairs, sovereignty and national security implications.

Trotman made the comments even as Petroleum Advisor to the President Dr Jan Mangal said that as an emerging oil and gas country, Guyana needs to place significant emphasis on transparency. Speaking with reporters on Wednesday, the expert who has over 18 years’ experience in the sector noted that Guyana is on the verge of an economic transformation and though success cannot be guaranteed, he believes transparency will aid in success. “Oil and gas, or any resource…we cannot assume that it will work for the benefit of the people; it doesn’t just happen by chance,” he said citing the example of West Africa. He believes the key ingredients to Guyana’s success, though there is no guarantee is transparency and capacity. “It has been proven over and over again that in a resource sector, the exploitation of resources, transparency is paramount and it is ultimately the people’s resource so they need to be confident and to trust their government, trust that their government is acting on their behalf,” Dr Mangal told the media.

Building capacity
Guyana he reminded is starting from base and understandably does not have much capacity within the oil and gas sector therefore building capacity rapidly is critical. That capacity however, has to come from further afield. As a result of the overarching need for transparency, Dr Mangal posited that all contracts, not just oil and gas contracts ought to be made public. “I believe all contracts, resource contracts should be made public not only petroleum, diamond, gold and timber…these are all resources of the people. All of these contracts should be made public; that is my objective,” noting that in the long term, it is the people of Guyana who will be affected.

His statement came in response to the non-disclosure of the government of Guyana’s contract with Exxon Mobil, as well as the reported US$20M signature bonus. In fact, Dr Mangal believes that in the case of the signature bonus, it needs to be made public as it needs to be auditable. “…people need to have confidence in their representatives and the way to do that is via transparency,” he stated.

Government has been called upon to make the contract available by civil society, Transparency International Guyana, the opposition People’s Progressive Party (PPP), as well as the Working People’s Alliance (WPA), of the parties forming the APNU+AFC coalition government.

Not at this time
However, Trotman said that it is not advisable to release the contract with Exxon at this time, stressing that it would not be to the nation’s benefit. On Wednesday, Trotman said that his government has taken a decision at this point in time not to release the full contract. “We have released quite a few details in fact and if persons are wise enough, and many are, you can put pieces together to get a sense of what is the contract but there are a number of extenuating and external issues which are being attended to, some of them have foreign affairs implications, some of them have sovereignty implications, some have national security implications and Government has been advised by external advisors and lawyers that at this point in time, that we should not bear all. It is perhaps not palatable to everyone to accept that and sometimes advice is not always what you want to hear but it is important that if you have retained experts and others to advise you that you abide by their advice,” said the Minister of Natural Resources. He believes that in due course, Cabinet will lift what he deems to be an injunction so that “everything will be opened.”

“There is nothing in there that could sink anyone or sink a Government. As a matter of fact, I have said that often times, it is really a continuation of a 1999 contract and it was tweaked in just a few places and so there is nothing to hide.” “It is just for different reasons, some of which I have just explained we have been advised that at this part in our juncture, as a country, we ought not to lay our contracts bare and one has to understand as well that there is a contract with ExxonMobil but there are a number of other contracts with other operators that this Government inherited and so it is not a matter of just releasing one contract,” he continued, noting that government will have to release all contracts eventually.

He said government will have to approach all operators and work out with them when and what they would wish to be exposed making reference to confidentiality clauses. “It is a matter of working with your partners and operators to ensure that we are at one,” said Trotman.

Pressure
Dr Mangal feels that if pressure is placed on the government the documents will be released. “I believe ultimately it will happen, it may take some time and you look around the world and people are usually reluctant to give out information because they feel they’d be criticised. It will take some time but it will happen. But it will only happen if people keep requesting it. If people believe it is important and they keep requesting it, then it will happen,” he stated. The Petroleum advisor was quick to point out that while government may have an intention to release the documents, the process would probably be faster if civil society demands same. “Ultimately the government will publish it but it might be quicker if put under some pressure,” he declared.

Trotman said he has no doubt that citizens will feel there is nothing to hide. He agreed with Dr Mangal that it is normal for suspicion to linger, not only here but globally, especially where natural resources are concerned. “We have not yet started production and so there is no revenue that is being hidden or siphoned away but we have been working very closely with the IDB, with the World Bank and with the IMF to develop a framework,” said Trotman.

Changes to bill
The minister pointed to the Commonwealth Secretariat which assisted in the crafting of a regulatory commission for the sector. That legislation, the Petroleum Commission Bill has been publicly criticised as giving the minister too much power; something Trotman said he is not surprised by.

“…but when one looks at the manner in which semi-autonomous agencies are established in Guyana… they all are the same. That is, that the Minister directs policy and so forth. However, I believe that because we are dealing with oil and its ability to corrupt, its ability to change and transform societies, there is a push for wider powers and as I said before, we want a nationally accepted Bill.”

Government he said will continue to pay full attention to comments and criticisms on the subject and disclosed that efforts will be made to re-engage the Commonwealth Secretariat later this month to work on the legislation. “So we expect that the Bill as currently put together, will go through several different changes and people can feel confident that they will not see things as they are… it as oil, people want to see a greater civil society engagement and involvement. We are going to allow that. We are going to allow greater participation of the Parliamentary opposition and we are going to see reduced powers of the Ministers.”

Guyana was recently accepted as the 53rd member of the Extractive Industry’s Transparency Initiative.