I have heard politicians give all manner of questionable and laughable explanations in defence of their positions, and some of this is unavoidable in political life with its notions of collective responsibility and collegiate destiny. But if reports are true, a conversation that took place at a meeting of the Parliamentary Committee on Natural Resources between the chairperson of the committee Odinga Lumumba and the Minister of Natural Resources Raphael Trotman has taken us to the heights of absurdity. (‘Trotman says award of 600 blocks to Exxon subsidiary was legal, vital to border security.’ SN:05/19/2018 & ExxonMobil concession should remain “intact” for strategic border security reasons. Demerara Waves: 18/5/2018)!
As reported, in response to Mr. Lumumba, the minister claimed that the government of Guyana does not want ExxonMobil to relinquish any of the 600 blocks awarded to it as the amount of blocks is the same as that which had been given to the company in 1999 by the PPP/C government. The minister told the committee that ExxonMobil was ‘picked by the then People’s Progressive Party-led government and continued to receive the support of the APNU+AFC coalition-led administration because of mainly security reasons in light of Venezuela’s border claim to the Essequibo Region.’ ‘Circumstances so existed in 1999 when the then [PPP/C] government saw it fit to give. Certainly, we believe that those circumstances have not diminished in 2016. We believe it continues to be strategically sound that the Exxon blocks remain intact as it was in 1999… It was not happenstance; it was deliberate to cover the sea space tip-to-tip and that company will be an American company.’ Almost boastfully, Mr. Trotman claimed that ‘Beal (Aerospace), did not make it through, Exxon did.’
Mr. Lumumba then turned to the US$18 million ‘signing bonus’, asking how the government arrived at that amount, and Mr. Trotman is reported as saying that ‘the government used the benchmark of US$12 million that Guyana had asked CGX Energy to fund the maritime boundary dispute case with Suriname at the United Nations Tribunal on the Law of the Sea. Using that figure, Trotman said ExxonMobil was asked to help with legal fees for the Guyana-Venezuela boundary controversy case at the International Court of Justice.’ Mr. Trotman claimed that the ‘government had the benefit of advisors’ but asked if there is written evidence to back up his position on this issue, he promptly claimed ‘you will not find that in any office’ and ‘no, I did not write Exxon! We asked Exxon for support.’
Having had no idea of what a signing bonus was, when I first heard of it, like any reasonable person I googled ‘what is a signing bonus?’ and ‘how is a signing bonus determined?’ I immediately received the following advice which, though relating to the continental USA, contains all the important elements which, if the government of Guyana had done the same, would have saved it much embarrassment and the country much loss. ‘An oil and gas lease bonus is a payment made to you for the right to drill on your property for the term of the lease. … One question we frequently get … relates to whether a lease bonus offer is fair. … You could search for hours trying to find out what a fair value is, but you would be wasting your time. … The fair value for a lease bonus will be affected by the following: timing, county, location within the county, surrounding production, who the operator is, state regulations, current oil and gas prices, and many more…Since there are so many factors that affect your lease bonus, … The best way to ensure you get the best oil and gas lease bonus is to work with experienced oil and gas professionals who can help negotiate the best possible price. … The lease bonus is just one component of your oil and gas lease. … Many mineral owners are so excited about the lease bonus they forget the most important part, the royalty percentage. … You want to negotiate the highest possible royalty percentage for your property’ (http://www.marcellusmineralowners.com/oil-and-gas-lease-bonus/)
On the general issue of the approach to border security, I had never before heard that the PPP/C gave Exxon 600 blocks for strategic reasons having to do with the border controversy, and so both government and the PPP/C may want to clarify this, but in any case, this government never fails to tell us how misguided the PPP/C were. What is worrisome is the appearance that because it knows that our territorial integrity is dear to us, the government believes that it can mute criticisms and relieve itself of its responsibility to indicate to the Guyanese people, for example, what other scenarios for securing the border were considered and what is the real cost of giving Exxon 600 instead of 60 blocks.
It is said that a country will best protect its interests if it understands that in international politics there are no permanent friends or enemies, only permanent interests and neighbours, and one needs to tread very carefully in this minefield. I have already voiced my concern about the government taking money from Exxon, a sworn enemy of the Venezuelan government, to fight our case. Once it was decided to go to court, the resources should have been taken from and be known to have been taken from the consolidated fund. Mr. Trotman was not above serving up red herrings, claiming that the US State Department refusal to give Beal Aerospace permission to transfer satellite technology to Guyana was based solely on Venezuela’s objection. However, my main concern is that we might be setting ourselves up for a rude awakening for the major problem with these kind of arrangements that depend upon multinational corporations is that they are founded on the false belief that Beal, or Exxon for that matter, have permanent interests in the location of borders.
Our government received US$18m for what Tarron Khemraj has said ‘could have been around US$238 million’ (SN: 07/01/2018), so one is left to wonder who were these advisors who even failed to convince the government to keep the most basic records of its dealings. But what irks me as much as the loss of significant resources is the submissiveness I detected in the government’s relationship with ExxonMobil and Mr. Trotman’s explanation of how the bonus was calculated. Imagine what Forbes Burnham must be doing in his grave when, notwithstanding the advantages the government has accorded it, one is told that ExxonMobil was ‘asked to help with legal fees’ and to give its ‘support’. What constitutes the height of absurdity is that Mr. Trotman presented us with what appears to me a classic case of conceptual conflation with severe practical consequences if what he confirmed was that the government and its advisors did not complete a comparative analysis of signing bonuses! Instead, all they did was a largely extraneous comparison between two border cases!
I have a feeling that Mr. Trotman, perhaps knowing the problems in which Minister George Norton found himself for lying to the National Assembly, was being honest, and for this we must thank him. However, as I understand it, this matter went to the Cabinet and thus he should also be thanked for shedding a quite troubling light upon how the present government conceives of and does business on behalf of the people of Guyana.