APNU+AFC never had any intention of getting the best value for Guyana’s oil resources

APNU+AFC never had any intention of getting the best value for Guyana’s oil resources

When the APNU+AFC administration had buckled under pressure in December 2018 and released the Production Sharing Agreement (PSA) it signed with ExxonMobil, international and local stakeholders were thrown into a state of bewilderment.

They asked, perhaps more than a million times over, how former Minister of Natural Resources, Raphael Trotman, could give away Guyana’s prime oil assets for crumbs.
Kaieteur News and other media entities had asked the former Minister to provide the names of the experts who advised him to accept, for example, a mere two percent royalty, a US$300,000 annual payment for local content, and a deal which overall, is filled from page to page with gaping loopholes for significant revenue leakage.
He never provided those names. But more queries followed.

Importantly, Guyanese wanted to know why the official it elected to protect its interest, not only failed to do so, but gave ExxonMobil and its partners, an oil deal so unfair to the nation, that another of its kind cannot be found in any other part of the world.

While the full truth to these questions may not be known at this point, what this newspaper has been able to ascertain via parliamentary records, takes transparency advocates a bit closer to understanding the modus operandi of the APNU+AFC regime during negotiations with ExxonMobil back in 2016.
Those documents made it clear that neither Trotman nor the APNU+AFC administration ever intended to get the best deal for Guyana, even though they were fully aware of the quality of the resource at stake.
During a meeting of the Parliamentary Sectoral Committee on Natural Resources held on May 18, 2018,

Trotman had appeared to make a presentation on the oil industry and other matters. Many questions were asked, one of which was proffered by the then Chairman, Mr. Odinga Lumumba, who sought to ascertain which party initiated the changes to the terms of the agreement and whether this was done in the nation’s economic interest.

Trotman noted in response to the first part of the query that it was the Government that initiated the changes. To the second aspect he said: “No, Sir. We are already going to earn 50% of 3.2 billion barrels. If we are to multiply that figure, if you have calculator any member may multiply 3.2 billion by 50%; it would be in the realms of US$300 billion and half of that is already coming into Guyana. We are already going to be wealthy. We wanted to anchor ExxonMobil into our waters and to let them know that we are a serious Government and that we are serious in developing the resource, if they were serious in doing so.”

Trotman also demonstrated to the committee that he had at the very least, a fundamental understanding of the resources offshore Guyana. The former Minister had said: “I should add that as of December 2017, the known reserves are in Guyana, as discovered to date. Let me rephrase that, the known reserves as of December 2017, stood at 3.2 billion barrels of recoverable petroleum. I should add that that figure is going to increase because there were two subsequent discoveries, which are still being analyzed in terms of quality and quantity, but as of December 2017, it was 3.2 billion barrels. I believe at this point in time that Trinidad has reserves of 86 or 85 million barrels of oil. That should give you a context of the volume and value of what we have.”

Trotman said that the reason behind the Government giving ExxonMobil all that it wanted and more, and particularly, not negotiating in Guyana’s best economic interest, was due to the spurious claims being made by Venezuela regarding Guyana’s territorial waters.

Trotman argued that the Government of Guyana had two pre-eminent objectives in 2015 and 2016. “The first was to bring production at the earliest possible time. Why? We needed to assert our sovereignty over our resources, given the 2015 decree by Venezuela and the utterings that were coming from there, hence the reason why we are going to production in what is considered relatively record times,” the former Minister stated.

Secondly, he posited that the APNU+AFC regime saw a need to protect the nation’s resources by saying, “this is ours.”
In this regard, he added, “To use an analogy, imagine having a mango tree in your yard but someone says that that mango tree is his or hers and it starts to bear. What you would want to do is start picking the fruits as quickly as you can before the other person gets to them, or before the matter becomes bound up in court.”

The former Minister told the committee that the APNU+AFC regime had no pretence to make about the foregoing matters for in its perspective, nothing else was more important.

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