Oil money has begun to flow

Nothing said by the government and its senior functionaries over the last week has succeeded in convincing the discerning public that there was good reason to keep secret the US$18m received as a signing bonus from ExxonMobil.  Indeed, the series of statements from President Granger and Ministers Trotman, Jordan and Greenidge have served to underline that citizens must be healthily sceptical of what their elected leaders do or say that they have done in their name. The channelling of the money to the Bank of Guyana, outside of the Consolidated Fund is flagrantly illegal and must be rectified immediately if the government expects to be apprehended as a committed adherent to the rule of law.

The sacred thread that should be woven through all modern governments is transparency and openness. The APNU+AFC government has professed such an inclination though it has fallen woefully short of enabling this by failing over 30 months to legislate its long promised code of conduct for senior public officials within an amended integrity commission law.

Trust in this government has been rent asunder by the damning and ultimately doomed decision to keep the bonus secret. Any government that conspires with a company as powerful as ExxonMobil to hide from the public, revenues that have been gained on the strength of this country’s patrimony, to wit, long sought after petroleum resources, is unfit to engage in such negotiations.

ExxonMobil is not an exemplar of good corporate governance. In its own home country and elsewhere it is under serious investigation and scrutiny for attempting to deny the anthropogenic nature of climate change and more particularly the role of carbon fuel consumption. Guyana on the other hand is an aspirant to a  green economy though one would have to search far and wide for evidence of a cohesive framework for such. The country is now flirting with an oil economy but without reconciling this with its green energy ambitions. ExxonMobil has annual revenues of US$218b. Our 2018 budget is but a mere US$1.3b. ExxonMobil has the undoubted guile and corporate ruthlessness acquired over many decades of dealing with minnows like Guyana. It has accrued impressive influence and power through varied means; its immediate past Chief Executive Officer is now the US Secretary of State. Yet, the Guyana Government had the gumption to enter into “negotiations” with this company without negotiators equal to the task and concluded a new agreement which not only led to the agreement being declared by government mandarins as one to be kept secret because of putative “security and territorial risks” but one that also apparently referred to a bonus which the government decided to hide from the people. The only thing one can say is that the same level of legal representation that Guyana is hoping to deploy in its border controversy with Venezuela is exactly the same kind that should have guided the government in its negotiations with ExxonMobil.

On Thursday, Minister Greenidge was the official who did most of the speaking on the arrangements but the questions remain. His contention was that the bonus was in the main earmarked for legal fees from the expected assigning of the border controversy to the International Court of Justice.

Delivering a statement to the National Assembly and later holding a press conference, Mr Greenidge said that “During the course of 2015 and 2016, after discussions with ExxonMobil, the Minister of Natural Resources (Trotman) proposed to Cabinet that the payment of a bonus on the extension of an agreement by the company be undertaken. Cabinet agreed and in June 2016 the Minister duly reported that the negotiation had been completed. The full Cabinet approved the terms negotiated and the arrangements to receive the funds.”

What was the reason for the decision to seek a new agreement with ExxonMobil? Was it only to get money upfront or was there something in the new agreement that would more substantially entrench Guyana’s interest and ownership of its natural resources? This is still to be answered.

Was this the point at which the government decided that any such bonus extracted would be used to fund the border controversy legal fees? This would be interesting as a decision had not yet been made at this point by the UN to consider sending the case to the International Court of Justice. Moreover, the Granger administration had been of the view since its accession to office in May 2015 that a juridical settlement would be the way forward for the settlement of the controversy. This was no doubt heightened by the sabre rattling from Caracas that greeted the Granger administration in May 2015. What preparations and provisions did the government begin to make then for managing anticipated legal fees?

Minister Greenidge’s  lamentations on Thursday about fiscal tightness and the inability to pay legal fees on time as reasons for the secrecy about the bonus ring hollow and are probably more reflective of bureaucratic inefficiencies in the government. There could hardly be circumstances where reputable law firms would not accept a Government of Guyana guarantee for payment and permit time for payment to be made. There are also well established ways within the fiscal framework for accessing funds for unexpected expenditures such as the contingency fund and via supplementary funding which the government routinely utilises. The argument that the exposure of the bonus would alert Venezuela as to the quantum of money in Guyana’s legal fund is risible.

By its injudicious decision to hide the bonus, the APNU+AFC administration has now tainted the expected source of money for the border controversy fees with Exxon’s own feuding with Venezuela going back to the Chavez government.

There is also the not so minor point that the government now says that US$3m of the bonus is to be allocated for urgent training of Guyanese in skills such as engineering and petroleum geology. If this training is urgent should it not have already been proceeded with and how was the news about the source of funding going to be broken to the jubilant winners of these scholarships? What would have been the pathway from the Bank of Guyana bonus account to the scholarships?

As the person who first publicly raised the question of the signing bonus, the country owes a debt of gratitude  to Mr Christopher Ram for continuing to fearlessly pursue probity in public life no matter who is in charge of government.

Oil money has begun to flow and already the dreaded curse of opacity and deception is shadowing it. The government has been left thoroughly exposed by its imprudent decision and now has much to do to ensure that its decisions in the oil sector can stand up to scrutiny.

It is still to answer several key questions:

1) What was the rationale for an entirely new agreement with ExxonMobil’s subsidiary, EEPGL?

2) What are the conditions attached to the bonus and what has ExxonMobil gotten in return?

3)  What factors were employed in the calculation of the bonus?

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