Minister of Natural Resources Raphael Trotman says he will not be speaking on any matters pertaining to contractual arrangements on oil and gas matters and will let Cabinet guide what should be made public.
“Nothing on the contract I am discussing. I would like to take this whole issue of the publication of the contract to cabinet for guidance because it is not a Trotman issue it is a government position and I won’t be able to discuss it,” Trotman told Stabroek News last week when asked about whether government collected a signature bonus from oil company ExxonMobil when a new agreement was signed with it.
“I am not giving any comment at all until I get guidance from cabinet on anything to do with the contractual relationship,” he added.
It is unclear if ExxonMobil has paid or committed to the payment of signature, discovery or production bonuses as per their contract agreement.
This is because government has refused to make the contract public and would only say there were minor changes to the old 1999 contract agreement, reached between then PPP/C government and Exxon and signed by the late President Janet Jagan.
Earlier this year, Trotman had justified the move saying that only the “salient points” of the contract agreement will be made public for security and other reasons.
“In so far as full disclosure at this point in time, I think government is of the view that full disclosure would not be to the best of the national benefit or national interest,” Trotman had told a media breakfast where his ministry and ExxonMobil provided updates on the nascent oil and gas sector.
“Right now we are prepared to share the salient features of the contract, it is a 50/50 production share agreement…that means that Exxon and its partners will share 50 percent between themselves and Guyana will (have) 50 percent,” he added.
The Minister said that while he was not speaking for government as to a reason why the full disclosure should not be made as yet, he will weigh in and advise President David Granger of the myriad reasons, including the security of the nation.
Trotman reminded that the contract signed with ExxonMobil and government predates the APNU+AFC government’s accession to office as it was signed in 1999 with the People’s Progressive Party/Civic (PPP/C) administration.
The APNU+AFC Government preserved the contract, only tweaking certain elements but continues to review it given the changes since its signing. The Minister said, “As you know we inherited the contract from the former government in 1999. Government made a decision to look at it but avoid opening the contract in its entirety for negotiations.”
“We didn’t want [it] to go abroad as Guyana is a place where it doesn’t respect the sanctity of contracts and we thought it best [to leave] what we had found. It was not altogether a bad contract… of course 1999 to the date of discovery in 2015 things would have changed,” he added.
The contract for the 6.6 million acres of the Stabroek Block is split with government and operator ExxonMobil down the middle, after cost recovery.
Esso Exploration and Production Guyana Limited is the operator and holds a 45 percent interest in the Stabroek Block. Hess Guyana Exploration Ltd. holds a 30 percent interest and CNOOC Nexen Petroleum Guyana Limited holds a 25 percent interest.
Trotman pointed out that even after cost recovery, Guyana would still have a sizeable sum to use towards its development, given the current oil prices.
Exxon Mobil recently announced that it had made a fifth new oil discovery after drilling the Turbot-1 well offshore Guyana.
This latest discovery adds to the previous finds at Liza, Payara, Snoek and Liza Deep, a release from the company said. Following completion of the Turbot-1 well, the Stena Carron drillship will move to the Ranger prospect. An additional well on the Turbot discovery is being planned for 2018, the release added.
The public will have to wait on Cabinet’s decision to know if any monies were already paid to government on any of the discoveries, the granting of Exxon’s petroleum licence which was given in June of this year, or if there are any slated future payments from Exxon or any of the other oil companies granted blocks here.
Trotman assured that he will “soon” be taking the issue to Cabinet for a decision.
