Opposition Leader Bharrat Jagdeo yesterday warned that if his party returns to government it will exclude the company which concludes an agreement with the current administration to buy Guyana’s first oil from “any and all open tenders”.
“They are knowingly entering into a contract with a government that has had its power reduced and should not be tying up any arrangements,” Jagdeo said at his weekly press conference at his Church Street, Georgetown office.
According to Jagdeo, the Department of Energy (DE) should allow ExxonMobil to sell Guyana’s first oil cargoes.
“[ExxonMobil] is a publicly-traded company. They can’t tamper with the price and we can verify the price they receive. Allow them to sell the first shipment and then put in a proper system through open public tender for the sale of our oil,” Jagdeo advised, while stressing that a new fully empowered government will then be able to determine whether to tender every three months or enter into a long term contract
The country learned via a report from financial news service Bloomberg that government had sent a letter to refiners around the globe inviting them to bid for three million barrels of Liza Blend crude, the light-sweet oil it will start exporting next year.
“The catch is that the buyer must take the unusual role of handling ‘all operating and back office responsibilities’ related to exporting the crude,” the Bloomberg report said, citing a document it had seen. Oil traders from Houston, Geneva and London, numbering about half a dozen, were expected to begin bidding on Monday, the report said.
There was no prior announcement of the planned bidding, resulting in the DE on Sunday issuing a statement to explain that it was undertaking a two-step process: an initial direct sale in the short term to selected bidders to set national benchmarks for selling Guyana’s portion of its crude in the future, followed by a public request for proposals for marketing services for Guyana’s crude.
Director of the DE Dr. Mark Bynoe has attempted to defend the action as an attempt at protecting government’s negotiating position.
Observers, however have noted that this is not a credible defence for not notifying the public, particularly given the well-established expectation of transparency in all aspects of the oil sector.
Yesterday Jagdeo reiterated these concerns, while declaring that the method used by the DE “smacks of corruption”.
He stressed that to limit the companies which can bid and then request that they appear face to face leaves room for an enormous amount of corruption. “It betrayed the deep-seated approached of the government. Its proclivity to operate in the dark for corrupt purposes… had the Bloomberg story not been posted I don’t think we would have formally known. We would’ve suspected in the absence of verification,” he lamented.
