For the foreseeable future, Guyana and its people will be inextricably bound to the vagaries and pulsations of the oil and gas industry. The sharply increasing dominance of the country’s GDP by hydrocarbons and the employment of its revenues to try to reorient the economy make this evident. It is nothing short of bewildering that even though hundreds of thousands of barrels of oil are being sucked each day from beneath Guyana’s seabed that the people of this country have no organic connection with this process either by palpable material gain, awareness of the global impact of this extraction or engagement in decision-making on the industry.
Decisions about oil and gas have been and are being made by a tiny coterie of mandarins and power brokers who have little accountability to the people of this country or to its legislature and who invariably are seeking only to improve their personal positions. Both sides of the political equation are heavily compromised and could be declared to be in bed with ExxonMobil and its partners. In 2016, APNU+AFC secretly signed a new post-oil Production Sharing Agreement (PSA) which yoked this country to the most unjust deal it could have been subjected to and encouraging ExxonMobil to utilize it as a paean to `contract sanctity’.
By the time APNU+AFC reluctantly left office in August of 2020, oil had begun to be pumped for roughly seven months. Under the PPP/C administration which succeeded it, oil has been extracted for around 42 months and in ever increasing quantities. Over this extended period, even if the original transgression had been committed by the APNU+AFC, the PPP/C government has compounded many times over the mass giveaway of Guyana’s resources for a pittance 2% royalty while ExxonMobil and its partners – as evidenced from their recent financials – are creaming off billions in revenues and profit oil.
The PPP/C government is now the main and continuing defaulter. Its calculus – and that of ExxonMobil – is to rip out all of the oil in the ground at this reprehensible 2% deal, completely uncaring that it is depriving future generations of Guyanese of wealth that is truly theirs from this non-renewable resource. The PPP/C government is conveniently deaf to calls to force ExxonMobil back to the negotiating table to improve the terms of this travesty. There are any number of ways that this can be accomplished. ExxonMobil has apparently found a way to neutralize the PPP/C’s interest in a renegotiated deal. The regulatory environment is weak to non-existent. Veering towards five years of production there is still no petroleum commission in place.
Enter, the Alliance For Change (AFC). Even though presently divorced for all intents and purposes, the AFC is in Parliament as part of its 2015 coalition with A Partnership for National Unity (APNU) and therefore what it does has significance. At its congress on June 29th, attorney at law Nigel Hughes was elected as the Leader of the party. Mr Hughes had not been associated recently with the AFC after having pulled back from the centre of decision-making in the party in 2016. His sudden return has now placed the focus squarely on what it means for any input he might have on the oil and gas sector whether in opposition or government.
It is a very relevant question as after he stepped away from top flight politics with the AFC he moved to establish a legal office in Houston, Texas, USA – where ExxonMobil is headquartered – with the express intention of mobilizing business.
“Hughes, Fields & Stoby, in partnership with Access Point, becomes the first legal and business protocol firm locally to establish a Houston, Texas presence in recognition of the emerging importance between the American energy capital and Guyana, as an emerging energy powerhouse,” his firm had said in a statement in September 2018.
Mr Hughes himself had likened the new office to “the opening of a bridge between the oil capital of the world, Houston, Texas and one of the emerging oil giants of the region, Guyana.”
The law firm’s statement had added that long before a potential investor even arrives in Guyana, the law offices of Hughes, Fields and Stoby would be on hand in Houston, Texas to guide clients through what could be a complex process of establishing business relationships in Guyana.
“From legal representation right through to assistance with the appropriate business protocols and linkage to a network of officials in the public and private sector, a client’s every need is attended to in ensuring the doors to doing business in Guyana are easily and readily open,” the statement had added. This was an unvarnished pitch for oil business that had no declared nexus with the interests of the country and its people.
Aside from the legal office to earnestly service those interested in the oil industry, Mr Hughes’ law firm has also represented ExxonMobil in important legal cases. These two attachments therefore put Mr Hughes and now, the Alliance For Change, in the invidious position of being seen to be beholden to oil industry interests. How such contamination can be ringfenced or walled off has probably not been invented as yet. That will be the burden of Mr Hughes and the AFC to bear as they move ahead with their varied projects.
What Guyana and its people desperately need at this point are representatives in the political and other spheres who are free of attachments to the oil industry and, importantly, appear to be so. The country has been done a thorough disservice by APNU+AFC and the PPP/C. Increasingly, in the public space, the degree of separation from the influence of ExxonMobil and its partners will be a vital tool in establishing credibility.