‘Guyana received a bad deal’

…Gaskin says of Exxon contract

As part of the new agreement signed with U.S. oil giant ExxonMobil, the Natural Resources Minister will have to file the company’s tax returns with the Guyana Revenue Authority (GRA), something outspoken political analyst and economist Ramon Gaskin has described as “foolish!”
According to Gaskin, this agreement which the Government signed on to makes the Government look silly in the eyes of many, and only puts the Minister (Raphael Trotman) in a bad situation, where he has now become the oil company’s “water boy”, who has to provide a receipt of payment to the company at the end.
“The tax return to the GRA must be filed by the Minister because he is the ‘water boy’ and ‘messenger boy.’ And he has to show a receipt from the Commissioner General that the taxes have been paid in full…he takes to Exxon and says, ‘boss, here is the receipt; I paid it’,” the political analyst said.

The new contract states that ExxonMobil and its partners shall provide the Minister with its income tax returns, to be submitted by the Minister to the Commissioner General of the GRA, so the Minister can pay income tax on behalf of ExxonMobil and its partners, as provided for under Article 15.4.
Another contention raised by Gaskin is that Government has not named the individuals who negotiated both the 1999 and 2016 oil contracts on behalf of the Government. While they have said that a team from the Guyana Geology and Mines Commission was responsible, no one has been named.
But, more importantly, Gaskin, a trained lawyer, told Guyana Times International last Sunday that both ExxonMobil and the Government are in breach of the laws governing this sector. He noted that the Petroleum (Exploration and Production) Act sets out the provisions for companies operating in this sector.
He has said that while it is noted that a prospecting licence for exploration in Guyana allows the oil company to get more than 60 blocks, in the case of ExxonMobil, that company has more than 600 blocks.
“This is ten times the amount allowed by the laws of Guyana. ExxonMobil has 60,000 square kilometres of territory — 12 times the size of Trinidad and 40 times the size of Barbados,” Gaskin claimed.
And he pointed out that while this same law stipulates that each company is allowed only 10 years maximum to explore for oil before they have to leave, Exxon has been here for close to 17 years now.
Gaskin maintained that Exxon’s “prospecting licence was up since 2009, and according to the Petroleum Act, they should have left already. Both the old 1999 and new agreement signed with ExxonMobil violates the laws of Guyana in many areas, and that should be noted.” He contends.
Having read the entire agreement, Gaskin says he is now of the opinion that Guyana received a bad deal, one even worse than some African countries, including Angola, had received.
“When you read the agreement…Who is going to pay compensation for damage to the environment in cases of a spill?” he questioned.
“There is nothing in the oil contract about insurance, expect that ExxonMobil is self-insured. “So if they destroy the (fishes, marine life) out there, you will have to go to him and make your claim (the same guy who just did it). However, in the African agreements, the oil company is required to hire an independent international company to do the assessment, and not to self-insure.
“While it should be a legal requirement to provide a performance bond and guarantees, we allow them to provide themselves (Exxon), rather than from an independent financial institution or bank,” Gaskin pointed out.
Another issue raised by Gaskin is the provision for site visits. “The Minister has to give a seven-day notice, and also pay for his own expense and transportation. We should have people out there on the rig every day, seeing what’s taking place to guarantee that what we are getting is fair.”
The Commonwealth Secretariat has been advising the Ministry of Natural Resources since 2013 on the legislative and institutional reforms required to regulate Guyana’s emerging oil and gas industry.