The belated issuance yesterday by the Department of Energy (DE) of the explanation for the method of its proposed sale of the first three lifts of Guyana’s oil does not dampen at all the very serious concerns about the opacity with which this government and the DoE have functioned as it relates to oil and gas (O&G).
One would have thought that President Granger – who has responsibility for O&G and who is functioning in a caretaker capacity – would have been acutely aware that his government has been found gravely wanting on its stewardship of this nascent sector since 2015 and would have ensured that all is above aboard in relation to the monetizing of every drop of Guyana’s patrimony.
It took a report from Bloomberg reported in Saturday’s edition of Stabroek News and other media to bestir the government and the DE into action. When did the government really plan to tell the people about the arrangements for this first sale of oil? After the fact as per the shocking 2016 Production Sharing Agreement with Exxon’s subsidiary? Does this government really subscribe to the notion that there must be an irrevocable commitment by it to transparency in governance and in particular O&G? Does it accept that furtive, unstructured dealings with individuals as per today’s supposedly face-to-face sessions with select brokers reeks…reeks of everything that signifies nontransparent management of the sector? Does it agree that there was sufficient time since 2015 for the fine-tuning of the various marketing platforms that would have obviated today’s shadowy engagement? Does it take seriously the country’s reporting requirements under the Extractive Industries Transparency Initiative (EITI) or is that just a plaything? The interrogatives can go on indefinitely.
Aside from its tardy disclosure, the government and the DE are yet to get to the nub of the matter. Who decided which brokers would be invited to today’s session and on what basis? Was it Dr Bynoe or someone else? Yesterday’s press release does not provide the answer. It stated: “Upon careful consideration of all advice and exigencies of this moment, the DE initiated a conversation with a selected group of companies for a potential placement of ONLY the first 3 cargoes of Guyana’s entitlement. This (then) allows Guyana to sell its crude directly to the selected Operators. While this may be considered by some to be a novel approach, it is a strategic one which brings the best value to the country and one which has been used in other places. It should also be noted that the DE employed its usual consultative apparatus with the Guyana Public Procurement Commission prior to taking action”.
The government and the DE must answer this question and provide the rationale for the selection of the brokers. Are these brokers above board and persons that the country would want to do business with? What assurances exist that there would be no untoward deal making between the two sides. Will the names of the brokers be made available and eventually the quantum of their bids?
Apart from the question of who decided on the brokers and the grounds, if the DE had issued this press release before Bloomberg got hold of the story, the average citizen might have accepted the explanation given. The virtual forcing of this release from the DE completely undermines its explanation.
Today’s supposed face-to-face session warrants urgent oversight from the Office of the Auditor General and/or the Public Procurement Commission.
The announcement on Friday by the United States Agency for International Development (USAID) of a US$500,000 ($100m) project to promote transparency and good governance in the extractive industries sector is a welcome development though cynics may point to Washington’s own intransigence towards EITI. No doubt influenced by big oil and other extractive industries, Washington announced on November 2, 2017 that it was discontinuing EITI implementation but remains a supporter of the initiative internationally.
That notwithstanding, any type of assistance in tracking payments to the Guyana Government and engendering openness in the sector will help the Guyanese people in getting a clearer picture of what is happening in oil and gas particularly as the APNU+AFC administration has done a poor job to date.
USAID said that the aim of the project is to build capacity for administration and governance of extractive resources and address gaps identified in Guyana-EITI’s first published report. Programme support will also tackle required changes in data gathering, monitoring and reporting systems that support attainment of the EITI standard. Activities will encompass streamlining systematic public disclosure of data from the oil, gas, mining, forestry and fishery sectors; and heightening awareness among citizens about the importance of transparency and accountability in the extractives sector.
Noting that the discovery of vast offshore oil deposits could rapidly propel the Guyana economy, USAID interestingly says: “During this transition period, transparency, accountability and good governance will determine Guyana’s ability to responsibly manage its extractive resources and ensure revenues benefit the Guyanese people, and this program supports attainment of these standards”.
That statement is a clear reflection of the angst that has been raised here and further afield that the country can easily veer along the path of the poorest examples in managing the oil and gas economy and revenues.
The Pan American Development Foundation, an Organisation of American States-created institution focusing on sustainable development, is implementing this programme which concludes in September 2020.
As useful as this project may be to transparency in the oil sector one can’t help but state that full disclosure is needed on a contemporaneous basis particularly given the newness of the sector to the economy here and the unfamiliarity of Guyanese with it. An annual report from GY-EITI even with this enhanced aid from the US will not cut it.
The disgraceful, secret invitation to oil brokers to bid for Guyana’s first oil signals an uphill struggle for the people of the country to be kept abreast of matters pertaining to their national patrimony.
