Initial focus in oil sector was preparation, not investigation

-Trotman on PPP/C’s 2015 oil block awards

When the APNU+AFC administration took office in 2015, its focus in the oil and gas sector was making preparations for production and not investigating the award of oil blocks by the previous government shortly before the elections, Minister of Natural Resources Raphael Trotman says.

“On coming into government, there was a general statement that we respected contracts entered into previously. In the meantime, SARA [the State Assets Recovery Agency] was established to probe instances of past misdeeds and so my focus was on preparations for production and getting the regulatory and legal framework in place,” Trotman, who previously had responsibility for the oil and gas sector, told Sunday Stabroek.

“I never received an instruction or guidance from the Cabinet or elsewhere to delve into any past agreements,” he added.

His comments come in the wake of calls from former Government Petroleum Advisor Jan Mangal for an investigation to be launched into the awards of oil blocks near to ExxonMobil’s Stabroek Block shortly before the 2015 polls as he believes persons had knowledge of the company’s yet to be announced oil find and acted to capitalise on it by securing nearby blocks.

The companies that were awarded concessions were Ratio Oil, JHI and Mid-Atlantic Oil and Gas Inc.

Mid-Atlantic signed a contract with the then government for an area that was originally Exxon’s but was relinquished according to agreements under 1999 contract that Exxon had signed.

Mangal believes that after striking oil, ExxonMobil was strategic in getting the other nearby blocks off the market at a cheap cost, thereby resulting in the awards. He has said that the matter requires an investigation as this country may have possibly lost billions of US dollars by what he called “secret awards” and he has said that he is at a loss as to why the current APNU+AFC government has not taken up the issue.

“Another much more important issue for Guyanese people is the highly anomalous awards of the Kaieteur and Canje oil blocks by the former Minister of Natural Resources, Mr. Robert Persaud…,” Mangal recently wrote on his Facebook page.

“These blocks should never have been awarded just prior to Exxon announcing its Liza 1 discovery,” he added. “Exxon knew it had a good well weeks before making its announcement in May-2015, hence it was in Exxon’s interests for those blocks (adjacent to Stabroek) to be taken off the market for peanuts. And it seems our politicians at the time were quite happy to… so as to benefit Exxon,” he added.

‘Not me’

Former Commissioner of the Guyana Geology and Mines Commission (GGMC) Rickford Vieira, who led the agency which dealt with petroleum matters at the time, told this newspaper that he never met with oil and gas companies and was not part of any negotiations. He explained that then PPP/C Minister of Natural Resources Robert Persaud led that cause and got technical assistance from the GGMC through now acting Commissioner Newell Dennison, who was then responsible for petroleum at the agency. “Anything petroleum was dealt with between Robert [Persaud] and the President, never me. From our end was Dennison because you know he is the petroleum person in Guyana from long… My role was more for documentation purposes; that is, if they needed something to be signed by the Commissioner, they would send it to me and I would sign and so on. But to say I had any part in meeting with any interested companies and negotiating, no,” he said.

Former president Donald Ramotar, who held ministerial responsibility for petroleum, maintains that he had no knowledge of ExxonMobil’s oil find in the Stabroek Block before the 2015 general elections that saw the fall of his government and therefore his award of contracts to private companies shortly before should not be seen as questionable.

Ramotar has previously acknowledged that oil exploration agreements he signed with two start-up private operators within the two week-period in the run up to the last general elections did look “suspicious,” but he maintained that there was nothing sinister in the deals.

“I was not given any other information, just a vague response about a week before the election, from Exxon. The impression I got was they were not ready to make the announcement because they were not clear but that it just looks good. They were not very explicit with me,” he recently told Sunday Stabroek when asked again.

He maintains that he acted on the technical advice of Persaud and that Exxon never confirmed that it had a “definite find” as the company used ambiguous language in informing of the Liza discovery.

In addition, he said that Exxon’s announcement to him came about a week before the elections and the contracts awarding the other blocks were already signed. “Just about a week before elections, they told me but even then they were not ready to confirm with me that they had this big find. They used ambiguous language. They were saying they had found something but they did not know what it was,” Ramotar said.

“I know it looks suspicious but I thought we would have won the elections anyhow and that it was just the continuation of an already started process from 2013,” he had told this newspaper last year. Ramotar said that while he understands that “the buck stops with me,” Persaud had made a case for JHI and Mid-Atlantic Oil and Gas Inc.

Days before the polls, which saw his party voted out after over two decades in power, Ramotar signed a contract with JHI and Associates (Guyana) Inc., which was only registered here on May 4th, 2015.

Another agreement between the government of Guyana and Ratio Energy Limited and Ratio Guyana Limited, the former incorporated in Gibraltar and the latter in Guyana, was signed on April 28th, 2015.

‘Sufficiently advanced’

Asked if he has since spoken to Persaud, who resigned from politics when Ramotar lost those elections or if he felt that Persaud should explain the rationale behind the advice given, Ramotar has said that “the buck stopped with me.”

He said that this newspaper should reach out to Persaud for comment as he could not speak for him.

This newspaper has been reaching out to Persaud since last year to no avail. While he would read messages, he has not responded to any and one time he had said that he was out of town but would speak on his return. He never did.

Dennison’s recollection of the events is that by 2013 Ratio had long been in discussions with this country. “The matters concerning Ratio’s contract were sufficiently advanced and the signing could have occurred at that time. However, that transaction was interrupted by the Venezuelan incursion of the RV Teknik Perdana incident,” he said.

He explained JHI never went into negotiations as a company but was brought in by Mid-Atlantic and it was the latter company that was the principal in all the transactions. He said that Mid Atlantic’s approach was sometime before May, 2015, but noted that he had to ascertain from the records when exactly and will provide that information this week.

Mid-Atlantic Oil & Gas Inc. (25%) and ExxonMobil (35%), which is Block Operator, also have participating interests in the Canje Block.

In February of last year, French oil major Total announced that it had bought a 35% working interest in the Canje Block, in an agreement it signed with both JHI Mid-Atlantic Oil & Gas Inc. The two companies, it said, will retain a shared 30% interest alongside operator ExxonMobil.

According to documents from the Deeds Registry, when JHI was incorporated, it had one director—ousted CGX executive John Cullen, of Lot 37 Amelia Street, Barrie, Ontario Canada, L4M 1M5. Cullen, who is described as a financial executive, is also the Secretary of the company.

The address of the local office was given as Lot A 16-17 Shamrock Gardens, Ogle, East Coast Demerara, the same address as his former CGX co-executive Edris Kamal Dookie, who was also director of the Mid-Atlantic Oil and Gas Inc. This newspaper understands that Cullen and Dookie were both ousted from CGX but that company never explained why.

Another executive of the CGX Team, Dennis Peiters, of Karankawa Trail, Kathy, Texas, replaced current Deputy Director of the Ministry of Natural Resources’ Petroleum Directorate Nicholas Chuck-A-Sang in November, 2015, as one of Mid-Atlantic’s directors.

Mid-Atlantic was incorporated here on April 8th, 2013, with Fazal Hosein of 1124 Paria Avenue, Chaguanas, Trinidad and Tobago, listed as a director. Chuck-A-Sang and the Marriott Hotel’s Chairman Hewley Alphonso Nelson were also listed as directors. On October 2nd, 2015, Dookie bought all of the company’s 5,000 shares at $100 each. Chuck-A-Sang ceased being an executive of the company on October 1st, 2015 and was replaced by Glenn Roland Low-A-Chee.

 

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