US$20M Exxon signing bonus: If intel provided proves true entire Govt should resign- Opposition leader

0

One week after making a commitment to enquire from ExxonMobil whether a multi-million-dollar signing bonus was indeed paid to the Government, Opposition Leader, Dr Bharrat Jagdeo says he has information that can reasonably confirm the allegation despite several Government Ministers having pleaded ignorance to this particular issue.

Jagdeo noted that while he does not have any documents to support his claims, he has enough information to confirm that the Government received the money.

Opposition Leader, Dr Bharrat Jagdeo

“They received this money it seems almost a year ago. Now if this turns out to be true then I believe that the entire Government should resign,” he said during a press conference on Wednesday.

The Opposition Leader asserted that Government resigning would be the most appropriate thing to do since they would not be deemed transparent, especially when Guyana is seeking membership from the Extractive Industries Transparency Initiative (EITI).

“So if this turns out to be true and the Government has received the money and Winston Jordan did not know about this then where did the money go? If Winston Jordan, who is the finance Minister doesn’t know about it?”

In another scenario, Jagdeo said if Finance Minister Winston Jordan claims he is not aware of it and it turns out that he was lying, then that is just as bad as hiding the truth. “…And how many other persons in the Government know of this? Definitely the Minister of Natural Resources should know about this payment” the Opposition leader remarked.

The Parliamentarian promised to place this issue on the front burner until the truth is revealed, noting that the issue has languished in the media because no one felt that any Government official would make such a deceptive move.

The allegation about Government receiving this bonus was first made by prominent Chartered Accountant and Attorney Christopher Ram.

Ram had said that this payment may be one of the reasons why Government was not disclosing the new contract between itself and the US-oil giant.

“The Government of Guyana used the excuse of a new licence to extract a signature bonus — a payment made by a contractor on the signing of an agreement to take up any given number of blocks. The figure I have been told is twenty million United States dollars,” Ram had said in a column.

Government’s Petroleum Advisor Dr Jan Mangal has said he had told the coalition Government to release the contract in the interest of transparency.

Finance Minister Winston Jordan

Asked by the media, the Finance Minister declined to confirm or deny whether Government was paid the sum of US$20 million by ExxonMobil when it granted the oil giant a production licence.

“I cannot confirm anything. Somebody said we have received US$20 million,” Jordan said. “I will check and see whether we did receive US$20 million. I will check and see whether we received any bonus of any kind, signature or otherwise; and how much it was, if at all.”

In June 2017, Exxon was granted its formal production licence. Before that, reviews were done of the technical and environmental aspects of the Liza Project Development Plan submitted by Esso Exploration and Production (Guyana) Ltd in December 2017.

As per the agreement the coalition Government made with Exxon, there will be a two per cent royalty per barrel of oil and a 50/50 share of profits. This 2 per cent is, however, below the global average.

The Government has justified the two per cent royalty by contrasting it with the 50/50 share of the profits; an arrangement that the Government has said is a reasonable one, arrived at through the advice of experts. Some had opined that a revenue-sharing arrangement would be a better option than a profit-sharing one.

There has been a flurry of activities in the Stabroek Block, since ExxonMobil’s 2015 oil find in Guyana. In May of that year, Exxon confirmed that more than 295 feet of high-quality oil-bearing sandstone reservoirs had been encountered at its Liza 1 exploration well.

In late June 2016, Exxon’s drilling results at Liza 2 revealed more than 58 metres of oil-bearing sandstone reservoirs in Upper Cretaceous formations. The well was drilled to a depth of 5,475 metres at 1,692 metres water depth. Drilling results confirmed recoverable resources to be between 800 million and 1.4 billion barrels of oil equivalent. Data from the Liza 2 well test is being assessed.

Stena Carron harsh environment drillship

The company has announced that it had made its third significant discovery in its drilling explorations offshore Guyana. Its partner, Hess Corporation, had noted that the Liza 3 exploratory well’s net value could be US$6.2 billion based on calculations from the Bank of Montreal (BMO) Capital Markets.

Drilling on Payara well began on November 12, 2016, with initial total depth reached on December 2, 2016. In January of this year, the oil giant had announced it had struck oil in its Payara-1 well, targeting the same type of reservoirs as the well’s Liza counterpart.

The Stabroek Block is 6.6 million acres. Esso Exploration and Production Guyana Limited (Exxon’s subsidiary) is the operator, and holds a 45 per cent interest in the Stabroek Block. Hess Guyana Exploration Ltd. holds a 30 per cent interest, and CNOOC Nexen Petroleum Guyana Limited holds a 25 per cent interest.

LEAVE A REPLY

This site uses Akismet to reduce spam. Learn how your comment data is processed.