Trotman’s 2016 re-negotiation of the PSA with ExxonMobil has put government in a serious predicament

Dear Editor,

King Midas, it was said, had only to touch something for it to turn to gold. The Minister in charge of Guyana’s oil has perfected this talent in reverse:

– The Minister’s 2016 re-negotiation of the PSA with ExxonMobil is a disgrace. It has put his government in a serious predicament and could prove a decisive factor in the 2020 elections.  The President is now in an invidious position: he has to show that he is getting a fair deal for the people and also reassure outsiders that Guyana is investor-friendly.

– In late 2016-early 2017, the Field Development Plan for the Liza Phase 1 production licence was due for review.  The Minister hired a company to review the plan. This company had never reviewed a similar plan before and was ill-equipped for the task.  The outcome?  Guyana missed the opportunity to influence how the oil will be extracted over the next 20 years and Guyana did not interrogate Exxon’s cost estimate of US$4.4 billion.

– The Minister has not recruited credible foreign O&G professionals to help the Government and Guyana.  His principal advisor was dismissed from the Liberian National Oil Company.

– The Minister resisted releasing the oil contracts.  Secrecy favours the politicians and the oil companies. It does not help the nation.

– The Minister continues to insist on opaque one-on-one negotiations for awarding our remaining oil blocks, when this method carries a high risk for corruption (that is, the government stealing from the people).  The excuse of geopolitics is without merit.

– The Minister has yet to initiate an audit or investigation of the suspicious awards which occurred under the last administration.  Some awards of oil blocks were made just days prior to the last election.  Many small companies, some of dubious provenance, were able to get interests in oil blocks, which they then sold to bigger companies. O&G professionals around the world are laughing at Guyana because they can see all the bad signs.  The Guyanese people already have been defrauded and this is continuing right now.

– Finally there was the Petroleum Commission Bill.  The Minister seems intent on making Guyana’s bill devoid of any recognised international best practices, and on making O&G a political fiefdom.  There is no indication that stakeholder input was incorporated into a new version.

The Minister has been quite consistent and single minded in his objective.

What more will the Minister do?

Yours faithfully,

(Name and address provided)

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