Dear Editor
AS one who traverse this dear land of Guyana, grounding with my brethren, my sisteren and, generally, Guyanese people of all walks of life, many questions are asked, especially from our young people regarding Guyana’s impending oil and Gas industry and its only fitting that same is addressed publicly to clear up any misconceptions about the industry that have been peddled by the doom and gloom preachers, such as former President Jagdeo, Christopher Ram, young Charles Ramson, and some clearly biased sections of the media.

In this letter, I wish to address a few major issues so that our youth can get the necessary clarity. Firstly, it is imperative to reiterate that the original contract between the government of Guyana and Esso Exploration, ExxonMobile’s affiliate company, was signed by Mrs. Janet Jagan, former President of Guyana and [then] Leader of the PPP in 1999.

At the time of signing, Mrs. Janet Jagan consented to giving ExxonMobil 600 Oil Blocks instead of the 60 which was stipulated by law. She contended that her reason for doing such was to occupy the area as a safeguard from Venezuelan aggression and claim to Guyana’s oil-rich territory. Minister of Natural Resources Raphael Trotman stated that he did not change this because he was in agreement with Mrs. Jagan’s reasoning and he also pointed out the fact that in Article 13 of the Oil and Gas legislation, it states that the minister can give more than 60 Oil Blocks based on application by the exploration company and by his discretion.

The oil contract was reviewed in 2016 where a few minor changes were made and it was released in 2017. It is interestingly important to note that the PPP demanded the David Granger-led government to release the oil contract/ production sharing agreement with ExxonMobile that they hid from the Guyanese people for over sixteen years. It was when the David Granger-led Administration came into power and the contract had to [be] reviewed, it was released to the Guyanese people.

Our Guyanese citizens must understand that although the oil contract was reviewed and some “fiscal changes” were made, the contract could not be renegotiated. The contract, which was inherited by the PPP, could not be renegotiated because the Guyana government was obligated to honour the conditions of the contract as it was signed by the Government of Guyana, and it did not matter whether that government was APNU/AFC or PPP. When asked by Stabroek News why Jagdeo did not review the Oil Contract when he discovered that Mrs. Jagan had given 600 Oil Blocks to ExonMobile instead of 60, to this breach of the law which was committed by the PPPC, Jagdeo simply stated, “I do not have any explanation because I was not in Janet’s mind to know whether this was a recommendation from a technical staff that dealt with it….I actually found [out] about the size later”. One might ask if this is the same Jagdeo that criticised the Oil Contract which was exposed to the Guyanese people and the world in 2017?

In an attempt to spread falsehoods, April 04, 2018, PPP’s MP, Ms. Gail Teixeira, denied that the previous government signed the original Oil Contract with Esso Exploration. Minister of Business, Dominic Gaskin, immediately corrected her by stating that it was her government that had, in fact, signed a production sharing agreement (PSA) with ExxonMobil and partners in 1999. Minister Gaskin also stated, “We were bound by the agreement signed by your government. If you look, if you had read the agreement, you’ll see the term of that agreement [says] it expires not when you find oil, it expires after you have finished producing oil,” Minister Gaskin said.

It is important to remember that even though the Granger-led administration reviewed the contract from a standpoint of strength, since the oil belongs to the Guyanese people, it must also be emphasised that the Guyana government did not, during Janet Jagan’s tenure and the present government’s tenure, possess the capital, expertise, experience, apparatus or machinery to consider oil exploration; all of the aforementioned belongs to ExxonMobile, therefore, the APNU/AFC government could not hold the Esso Exploration at ransom as some would have desired.

The contract is a hybrid contract, meaning that it involves royalties and a profit-sharing arrangement. The word “royalty” comes from the Middle Ages, when kings (royals) had rights because they owned land on which there were minerals. The person who wanted the minerals would pay for the right to take these minerals out of the land. A licence is right to use something that is owned by someone else, while royalties are the payments for that use. At its simplest, you have a licence to drive a car or a licence to own a business. The payments you make to the state agency are in effect like royalties.

Guyana will enjoy a 2% royalty and 50% of all of Exxon’s profits. Firstly, royalty is never anything huge. In most cases, they don’t usually go beyond 5 %. Mischief makers and self- proclaimed Oil and Gas experts peddled the 2% royalty to the masses without fully explaining that most Royalties are usually 5 % or below. In this case, the 2% royalty cannot, and I repeat cannot, be viewed in isolation. It simply means that Guyana gets 2% of the gross oil revenues and 50% of the net oil revenues. In other cases where the royalty is higher, for example Ghana whose royalty is 10%, one must consider that their oil is onshore unlike ours which is hundreds of kilometers offshore, therefore our production costs would be higher.

Former American Ambassador Perry Holloway has declared Guyana’s Oil deal to be a good one as Guyana will get money from day one of oil production. I must ask the question, where were all of the critics such as Raymond Gaskin and Christopher Ram in 1999? Or was the contract so secretive that they were unaware of its existence? If one reads the letters and was present at the opinion-sharing sessions by the commentators, Gaskin and Ram, one would have gotten the impression that ExxonMobil could have been bullied or coerced into meeting all of the demands of the Guyana government or any other government. Charles Ramson Jr. who holds a masters degree in Oil and Gas management but who has absolutely no experience in the field, has been a sharp critic of the Oil contract. [He] expressed these criticisms via Kaieteur news article Oct 02, 2018, [and] is fully aware that the PPP signed the first Oil contract with Exxon in 1999. Yet, in hypocrisy, he chose to criticize the APNU/AFC government over a contract that we are all bound by that was signed by his party.

Instead, Ramson should have turned his attention to his own party and Bharat Jagdeo who give Bai shanlin 960,000 hectares of forested land to complete logging; 20 km of river gold mining concessions and 400 acres of land for real estate. It is likely he, like most of Guyana, would be ignorant to this like many other unconscionable things the PPP did to the people of this country.

The party who weakened controls and caused Guyana to lose revenue on 15000 ounces of gold on a weekly basis, by allowing private individuals to buy gold instead of as previously done only through the gold board. Through these weakened controls 15000 ounces of gold are smuggled out of the country on a weekly basis and the gold board gets no revenue. It was this government that worked assiduously with several agencies to correct this tremendous loss of our patrimony. We heard nothing from Ramson when his party’s Youth Arm (PYO) head was found with $20 billion in his bank account and we also heard nothing from Jagdeo when Roger Luncheon gave the Ajeenkya Patil group Inc 64,488 hectares of land in Canje for $292.00 per hectare, per year for 99 years.

The US$18 Million signing bonus did not escape any of the Oil Contract critics radar but they failed to highlight that the information was released regarding same when Production Sharing Agreement was made public. The failed to mention that the signing bonus was in an interest-bearing account right in the Bank of Guyana. The signing bonus saga was just another attempt by the opposition and the selective critics of the government to create sensationalism. Guyana’s Minister of Finance, Winston Jordan, declared what was and what is that “none of the US$18M—received as a signing bonus from US oil major ExxonMobil—has been spent.”

Upon her exit and completion of duties in Guyana Ms. Kimberly Brassington, ExonMobile’s former Senior Director of Government and Public Affairs, has stated that the PPP Administration was given money to complete capacity-building training. We all know where the signing bonus is but we are still waiting for Mr. Jagdeo and the PPP to advise what was done with those monies.

Guyana, under the David Granger-Led Coalition Government, is better equipped to continue serving this nation for the benefit of all Guyanese. We must never allow ourselves to forget that most evil, wicked and corrupt PPP administration.
Forward ever, backward never.
Jermaine Figueira
Member of Parliament
Region Ten