A day after the announcement of first oil and hailing what it said was visionary leadership by the late President Janet Jagan in engaging ExxonMobil, the opposition PPP yesterday flayed the government’s handling of the petroleum sector and pledged to have the necessary legislative framework installed in six months were it to win the March 2 general elections.
In a statement, the PPP also excoriated Natural Resources Minister Raphael Trotman for his role in the severely criticized Production Sharing Agreement (PSA) which was negotiated in 2016 with ExxonMobil subsidiary, Esso Exploration and Production and Guyana Limited.
“Under the former People’s Progressive Party/Civic (PPP/C) government, it was Janet Jagan who moved to engage the oil company and signed the initial contract in 1999…Despite the naysayers, the result of visionary leadership is clear. Our nation owes a debt of gratitude to Janet Jagan”, the party said.
Having done nothing that resulted in ExxonMobil’s work in Guyana, the PPP said that President David Granger’s four-plus years of being in charge of the oil and gas sector has proven to be an abysmal failure.
“These failures range from the indefensible re-negotiation of the ExxonMobil contract in 2016, where Guyana was in a position of strength, having confirmed a find of three (billion) barrels of oil, to the fact that Guyana is still without the necessary architecture that would guarantee management of the oil and gas sector, where global best practices, transparency and accountability are the order of the day”, the PPP said.
Freedom House said that the re-negotiation of the ExxonMobil PSA involving “compromised APNU+AFC Coalition officials” resulted in losses for Guyana and tops the list of the Coalition’s indefensible failures in the oil and gas sector.
The searing criticism of the PSA will raise questions as to whether renegotiation of the PSA would form a key demand of the PPP in the upcoming election campaign.
The PPP noted that Trotman had blamed the technical staffers of the Guyana Geology and Mines Commission (GGMC) in relation to the PSA when he said in July 2019 that, “At all material times, I acted on the advice and direction of the GGMC…I relied on the officers at GGMC at all times and was advised when the agreement was ready for signature.”
As the then official with responsibility for the oil and gas sector, how could Trotman expect Guyanese to accept the fact that all he did was act on advice and sign the agreement when it was ready, the PPP queried.
“If this is the best excuse he could offer, the question that must be asked is how could the renegotiation of the ExxonMobil contract be approached in such a laissez-faire manner and with such indifference?” the party asked
The secrecy by the government over the US$18M signing bonus was also flagged by the PPP.
“… on this matter, the Coalition’s proclivity for operating in the dark was exposed, yet again”, the opposition party said.
Citing denials by government officials in 2017 of a signing bonus, the PPP noted that “US$18M was, in fact, received a year earlier, since September 2016. The Guyanese people were only made aware of this fact in December 2017. Guyana’s national budget estimates for 2017, 2018 and 2019 did not reflect receipt of the US$18M, which is what should have been done. How then can Granger be trusted when he claims that the Coalition will “manage petroleum revenues prudently to ensure fiscal discipline” when Guyanese are aware of the evidenced failures with the first receipt of oil monies?”
On the architecture for the management of the sector, the PPP lamented that Guyana is nowhere close to where it should have been five years since the oil find was confirmed in May 2015.
“First, Guyana has a Sovereign Wealth Fund that was not only hurriedly passed by the APNU+AFC Coalition in the National Assembly, at a time when its authority was diminished as a caretaker government, but is lax in several areas. The political influence that dominates this piece of legislation is far removed from what is global best practice. The Minister of Finance is overall in charge of the fund. The operational management of the Fund will be done by the Central Bank, which reports to the Minister of Finance. The Macro-Economic Committee is appointed by the Minister of Finance and chaired by the Ministry of Finance. The Investment Committee is appointed by the Minister of Finance and chaired by the Ministry of Finance”, the party declared.
Second, it said that the Petroleum Commission, which was supposed to be the regulatory body, is non- existent. It said that the APNU+AFC Coalition seems to have replaced that body with the Department of Energy, which reports to the President.
Third, after five years, the PPP said that there is still no Local Content Policy, noting that this is one of the key means of ensuring that Guyanese benefit in a direct way from the operations in the oil and gas sector.
The statement said that the PPP/C has made it clear that the entire architecture for proper and transparent management of the oil resources will be completed in six months if it won the March 2 2020 General and Regional Elections.
“What is clear is that the Granger-led APNU+AFC Coalition has not worked to ensure Guyanese benefit fully from ‘first oil’ or the oil and gas sector for that matter. Instead, he is attempting to lull Guyanese into the belief that with ‘first oil’ here today, we are going to be prosperous tomorrow”, the PPP said.
It also rapped the government over its secret move to sell Guyana’s share of ‘first oil’.
“It should be a source of shame that it was the international media house, Bloomberg, which exposed the APNU+AFC Coalition’s plans to approach traders directly, ‘face-to-face’, to conclude deals for them to buy Guyana’s oil and sell it”, the PPP said.
The PPP added that while ‘first oil’ should have fueled the hopes and aspirations of Guyanese across the country it has subsided into a cause for greater apprehension about our future, due to the incompetence and corruption that the APNU+AFC Coalition has demonstrated in the developing sector over the past four-plus years.
There can only be advances if the oil monies are well managed and the APNU+AFC Coalition has demonstrated its inability in this regard, the PPP charged.
