–Financial analyst says new AFC Leader, Hughes, must terminate contracts with ExxonMobil, other oil companies

NEWLY-elected Leader of the Alliance for Change (AFC) Nigel Hughes has found himself in a dilemma since he made it public that ExxonMobil Guyana (EMGL) and several of the oil companies are clients of his law firm.
While the political opposition has been vocal about renegotiating the oil contract, the new AFC Leader has refrained from commenting on this.

Financial Analyst, Joel Bhagwandin highlighted this glaring conflict of interest in a letter carried by this publication.
In an invited comment to the Sunday Chronicle, he said, “Now that he’s [Nigel] elected, [you think] he would come out and publicly say that, ‘I’m terminating all my contracts with all the oil companies, because I can’t be the leader of a political party contesting a national election, regional and general election to be President and I’m working for the oil companies.’ “Then, whose interests are you representing? Are you representing Exxon’s interest or are you representing the people of Guyana? And that is a general rule of conflict of interest.”

Further, Bhagwandin highlighted that with Hughes’ recent election to the post, EMGL will be forced to terminate its contractual arrangement with his firm.
EMGL is bound by its internal Anti-Corruption policy, which is in accordance with the US “Foreign Corrupt Practices Act” thereunder, EMGL is prohibited from conducting business with government officials, which is equally applied to candidates of political parties, according to the Financial Analyst.

He related, “So now that Nigel Hughes has been elected, one of two things ought to happen a) If he is really a person of the highest integrity, then he has to immediately terminate his contract with ExxonMobil. Now, that is, if he has real genuine integrity. If he doesn’t, then ExxonMobil has no choice but to terminate it, because they are bound by their internal policy, which is in accordance with the US anti-corruption law.”

Hughes recently appeared on “Politics 101”, hosted by opposition Working People’s Alliance (WPA) Executive Member Dr. David Hinds. Hughes was asked whether he supported a renegotiation of the oil contract, to which he responded by stating, “Several of the oil companies are clients of our firm; I cannot comment on that.”
Adding to this, former AFC Leader and newly-elected General Secretary Raphael Trotman, who, as Natural Resource Minister, signed the deal, is now advocating for the renegotiation of the oil contract.

Through a recent statement issued by the Ministry of Natural Resources, the government reminded that when it assumed office in 2020, it audited the management infrastructure for the country’s multi-billion-dollar petroleum sector, only to discover a deplorable state of affairs, given the abysmal five-year leadership of the APNU+AFC coalition.
According to the ministry, because basic legislative and regulatory duties were neglected for years, the nation was not ready to handle the industry.
The government also emphasised how its predecessor prioritised questionable transactions, disregarded transparency norms, and failed to put the interests of the Guyanese people first.

LOPSIDED CONTRACT
Key among the criticisms levelled by the current administration is the lack of transparency in the negotiation of the country’s oil contract. The government repeated that the contract was signed and negotiated in secret, and is armed with a stabilisation clause that prevents Guyana from making any changes to the Guyanese people’s share. The APNU+AFC government also hid the PSA and the fact that it received a US$18M signing bonus from the public for two years.

While the PPP/C administration acknowledged that the contract would not be renegotiated, due to respect for the sanctity of contracts and the devastating impacts such a course of action would have on the investment climate, to ensure maximisation of benefits, the government has strengthened the legislative and regulatory framework for the sector, which it said it continues to do.
In this regard, Guyana saw the Local Content Act being passed in December 2021. Since this law’s enactment, to date, over US$1 billion has been invested in the use and expansion of Guyanese goods, services, and skills in support of the petroleum sector.

Furthermore, the ‘Coalition’ failed to overhaul the Petroleum Act, which was 34 years old by the time the PPP/C reassumed office in 2020, as well as failed to get the Gas-to-Energy project off the ground, despite continuous increases in national power demand.

The Petroleum Activities Act was passed in August 2023, thereby positioning Guyana on the path of responsible, transparent and modern petroleum management, the statement noted.
Importantly, the government noted that contracts have been awarded for the Gas-to-Energy project, with significant works already underway. The project, it said, will slash energy costs by 50 per cent, while delivering clean and reliable energy by 2025.