It was a one sided affair on Wednesday, as Finance Minister Winston Jordan moved a motion in the National Assembly confirming tax waivers for British oil company subsidiary Tullow Guyana.
The Parliamentary Opposition – Peoples Progressive Party – was not in the National Assembly on Wednesday, having announced they are boycotting while the very legal status of the Government depends on how the Caribbean Court of Justice (CCJ) rules in the No Confidence Motion cases.
Section 15.1 of Tullow’s contract states that “subject to Article 32 and except as provided in Article 15.2, 15.8 and… Article 15.1, no tax, value added tax, excise tax, duty, fee, charge or other impost shall be levied at the date hereof or from time to time thereafter on the contractor or affiliated companies in respect of income derived from petroleum operations or in respect of any property held, transactions undertaken or activities performed for any purpose authorized or contemplated hereunder.”
There are exceptions, such as import duties at rates set out in the Customs Act and subject to Article 21 of the contract; income unrelated to what is derived under the agreement and rent due to the government for any land rights granted or assigned.
Opposition Leader Bharrat Jagdeo on several occasion had warned that all contracts/agreements/concessions granted by Government after December 21, 2018 would be reviewed if the PPP wins the next General and Regional Elections. On December 21, 2018 a no-confidence motion was passed in the National Assembly and brought the Government tumbling. The Government has since moved to the court to determine the validity of the motion, which was already certified by the Speaker of the National Assembly.
Tullow first became involved in oil exploration in Guyana in 2008, when the company obtained equity in the Georgetown block and participated in the exploration Guyana essay, operated Jaguar one well in 2012.
Then in 2016, Tullow and Eco signed a petroleum agreement with Guyana, to explore the offshore Orinduik block.
The company now plans to drill three wells this year in the Orinduik Block.