US oil company ExxonMobil did pay a signing bonus following the new agreement it clinched with the government on June 27, 2016 and why this was kept secret will pile pressure on the Granger administration over its claims to transparency particularly given concerns over accounting for revenue from the petroleum sector.
Stabroek News has seen correspondence (reproduced on this page) dated September 20, 2016 from the Ministry of Finance to the Bank of Guyana (BoG) pertaining to arrangements for the signing bonus. The letter did not specify the quantum of the bonus but commentator Christopher Ram said in October that he was told that US$20M was paid. This
statement was not contradicted by the government. Pressed for answers, Minister of Natural Resources Raphael Trotman would only say that that Cabinet would deliberate on the question of making the June 27 contract available to the public. On November 30, Minister of State Joseph Harmon said that the contract and presumably any information on the signing bonus would be made available sometime this month.
Aside from the secrecy over the bonus, the depositing of the funds at the BoG and outside of the Consolidated Fund would raise grave concern as this government when in opposition had been critical of monies kept outside of the Consolidated Fund and the accountability framework.
In the correspondence seen by Stabroek News, Finance Secretary in the Ministry of Finance, Dr Hector Butts wrote to the Governor of the BoG, Dr Gobind Ganga with the reference line ‘Signing bonus granted by ExxonMobil – Request to open bank account’.
Butts said in the letter “I shall be grateful if you would arrange for the under-mentioned Foreign Currency Account to be opened at Bank of Guyana, in order to receive a deposit in the form of a signing bonus to be given by ExxonMobil. This account should not be treated as part of the Bank’s reserves. Instead, the proceeds should be held in the currency of the deposit, that is, United States dollars, and invested in secured interest-bearing securities”.
Butts went on to say that the authorized signatories to the account were himself, his deputy, Louise Bouyea, Accountant General Jawahar Persaud and his deputy Jennifer Chapman.
The letter was copied to the Minister of Natural Resources, Raphael Trotman.
Who negotiated the signing bonus, the terms of such a payment and what has since become of the money are questions the government will likely face pressure over.
In February of this year, Trotman informed that minor modifications to the original contract with ExxonMobil subsidiary Esso Exploration and Production Guyana Limited (EEGPL) were made and had justified the non-disclosure by saying that only “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.
The issue attracted additional public scrutiny when columnist Ram stated in October this year in Stabroek News that he understood that some US$20M was paid to the government as a signing bonus.
With Stabroek News consistently probing as to why the contract could not be made public, Trotman then said in October that he would take the issue of disclosure to Cabinet for discussion and guidance on the way forward.
“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,” he said when asked about whether government had collected a signature bonus from ExxonMobil when a new agreement was signed with it.
Following Trotman’s position, in early November, Government’s Petroleum Advisor, Jan Mangal, said that he had advised government to make the contract public but believed with public pressure the contract would be released quicker.
“My terms of reference with the President, I had transparency as the number one item. So I constantly push for transparency. I believe that all contracts should be made public. Not only petroleum, Diamonds gold, timber these are all resources of the people and all of these contracts should be made public. That is my objective. I am an advisor and I obviously can only advise. That is continually my advice that these contracts be made public because in the long term that is what would help Guyana,” he stated.
“Of course the signing bonus (if paid) needs to be made public. It needs to be auditable. People need to have confidence in their representatives and the way to do that is by having transparency,” he added.
Mangal said that heightened demand from citizens for the release of the contract and answers as to whether a US$20M signature bonus was paid here could see a faster release of information and felt that if the people believe it was important enough they should press the issue.
“I believe the civil society and the people have a large role to play and it would probably be quicker if civil society and the people believe it was important and voiced their beliefs,” Mangal posited.
Further, he added, “Ultimately they will publish it but it might be quicker if there is some pressure.”
On the same day Mangal spoke, Trotman, via a statement through the Ministry of the Presidency, reiterated his earlier position.
“The Government has taken a decision at this point in time not to release the full contract. We have released quite a few details in fact and if persons are wise enough, and many are, you can put pieces together to get a sense of what is the contract but there are a number of extenuating and external issues which are being attended to, some of them have foreign affairs implications, some of them have sovereignty implications, some have national security implications and Government has been advised by external advisors and lawyers that at this point in time, that we should not bare all,” the release quoted him as saying.
“It is perhaps not palatable to everyone to accept that and sometimes advice is not always what you want to hear but it is important that if you have retained experts and others to advise you that you abide by their advice. I am confident that in due course Cabinet will lift that injunction … and that everything will be opened. There is nothing in there that could sink anyone or sink a Government. As a matter of fact, I have said that often times, it is really a continuation of a 1999 contract and it was tweaked in just a few places and so there is nothing to hide”, the release added.
‘Greater Inclusiveness’
When Harmon was asked on November 30 if it was the government yielding to public pressure, he said that his government was one that listens to its people and in so doing reflects it by their actions.
“We have taken all of those issues into consideration. Cabinet has had a fulsome discussion on the matter and we also recognize that there is a need expressed by our population for greater inclusiveness, for more information to be provided and we take those into consideration as well,” he said.
“I said here at one of the press conferences that we listen to the people and we are not deaf to the concerns that have been expressed by various sections of our community, and we believe that it is important that we take the public into our confidence, with respect to not only this contract, but other contracts which might affect our dealings with other companies in relation to the natural resources, the national patrimony of Guyana,” he added.
He also pointed out that checks were made with Exxon before a decision to have the contract released publicly. “There are background checks which a government has to do when it is going to make certain decisions so I have given you a framework a timeline when the contract will be made available [ and that is in] the month of December,” Harmon said.
Ram had also questioned repeatedly why it was necessary for a new agreement to be signed by Trotman with EEGPL when only minor modifications were being made. It was surmised that a signing bonus from Exxon was the impetus towards a new agreement.
