–commit to working with SARA investigators

JHI Associates Inc. (JHI) and Mid Atlantic Oil & Gas Inc. (MOGI) have distanced themselves from being involved in illegitimacy in relation to the awarding of the Canje Block offshore Guyana.

In a joint press release on June 1, 2019, the companies also defended their experience in offshore petroleum exploration following word of an ongoing investigation in this regard by the local State Assets Recovery Agency (SARA).

SARA is currently conducting an investigation into how exploration rights were awarded to the Stabroek, Kaieteur, Canje and Orinduik blocks.

While neither Exxon nor Tullow, which operate in the blocks, have been singled out as targets, questions have been raised about awards being made to companies labelled as “inexperienced” in deep-water operations.

Furthermore, the Kaieteur and Canje Blocks were given out by the former People’s Progressive Party (PPP)’s Donald Ramotar-led Administration shortly before the 2015 General and Regional Elections.

Responding to recent reports in the media on the topic, JHI and MOGI have stated that the awarding of the Canje block, which took place on March 4, 2015 was completed using the standard Guyana Model Production Agreement.

“The Liza-1 well on the adjacent Stabroek Block was very high-risk, and did not begin drilling until after the Canje Block licence was signed. Prior to this, there were no discoveries anywhere offshore Guyana. JHI and MOGI followed all applicable laws and regulations in their application for the licence for the Canje Block,” the release said.

In the Canje Block, ExxonMobil holds 35 per cent; Total 35 per cent; JHI 17.5 per cent; and Mid-Atlantic Oil & Gas 12.5 per cent.

While the companies stated at the date of the release that neither had received requests for information or notification of a pending investigation from SARA, they are not opposed to discussions on the matter.

“Both companies welcome the opportunity to discuss this matter with duly authorised agencies of the Government of Guyana at any time. JHI and MOGI value our reputations as good corporate citizens, and are committed to operating all aspects of our businesses in an open, cooperative and transparent manner,” the release stated, adding:
“We recognise the importance of this resource to the people of Guyana, and take our responsibility to explore for oil and gas offshore Guyana very seriously.”

‘FRAUDULENT’

Speaking to the media recently, Oil and Gas Consultant, Dr. Jan Mangal had referred to the awarding of the Canje and Kaieteur Blocks as “fraudulent” as he questioned the track record of the companies involved.

“The award of these two blocks has all the signs of corrupt awards,” he said. “Deep-water oil blocks should never be awarded to unknown companies or individuals who have no assets or track record of producing oil in deep-water.”

“The former Minister, Robert Persaud, in effect hired contractors [such as] Mid-Atlantic, Ratio, JHI, Cataleye, etcetera who had zero assets or capacity to produce oil in the blocks. This type of fraud robs countries like Guyana of billions of USD and is seen time and again in West Africa,” Dr Mangal said.

He stands among numerous other persons who have questioned the awarding of the blocks, as well as the timing thereof by the former PPP administration.

With the heightened scrutiny being placed on the decisions, Ramotar has since denied having knowledge of the presence of oil in Guyana before the awarding of the blocks.

The release from the two companies has indicated that the founders of JHI and MOGI, John Cullen and Dr. Edris K. Dookie respectively, each have over 20 years’ experience exploring for oil offshore Guyana.

WORKED IN GUYANA

The document also states that Dookie and Cullen are the original co-founders of CGX Energy, and that they have worked in Guyana, having drilled several offshore wells and assisted with the Suriname maritime boundary dispute.

“For the Canje Block licence application, Cullen and Dookie brought a technical team with over 130 years of offshore petroleum exploration experience, and significant financial capabilities, based on prior successes in raising hundreds of millions US dollars for oil-and-gas exploration projects in Guyana and elsewhere,” the companies stated, adding:

“JHI’s and MOGI’s qualifications certainly met the Guyana Government’s requirement that licence applicants must demonstrate technical expertise and financial capabilities.”

Dr Mangal, nonetheless, has opined that the President should rescind the awards of the Kaieteur and Canje blocks as is his right to do, irrespective of the outcome of SARA’s investigation.

“I hope they can rescind these two awards so these blocks can be auctioned off properly so Guyana can earn 100s of millions or even billions of US dollars in signing bonus. The objective is to return the assets to the State, and to ensure that the companies involved cannot take part in any future auctions of these two blocks,” he stated.

Meanwhile, SARA’s head, Dr. Clive Thomas has indicated that the agency is still in an “investigatory stage,” but that there is currently enough evidence for SARA to want to continue its investigation.