Eco oil deal a dangerous ‘flipping’ development

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…I know profiteering when I see it – Economic Advisor

By Gary Eleazar

With word that a Petroleum Exploration Licence is being sold off – at least in part – within months of it being issued, Natural Resources Minister Raphael Trotman now has no choice but to come clean with the Guyanese public on what exactly are the transactions being made with respect to the nation’s Exclusive Economic Zone (EEZ).
Dr Peter Ramsaroop, the economic advisor to the Opposition Leader, in a recent

Peter Ramsaroop, economic advisor to the Opposition Leader

interview with Guyana Times weighed in and is demanding that Minister Trotman “immediately divulge the extent of the Petroleum Oil fields in Guyana’s EEZ, offshore, available and impaired and to also make public those who are applying for concessions now.”
He reminded that only recently, Opposition Leader Bharrat Jagdeo cautioned there might be corruption afoot. Jagdeo on Wednesday in reference to the shareholding sale had told media operatives, “I saw an agreement that (Minister Raphael) Trotman gave being ‘flipped’ now in just a matter of a year.”
Speaking during the press engagement, the former President was adamant that Minister David Patterson is yet to respond to the claims that persons with shared links to the Administration have been making applications for petroleum concessions in order to flip the licences for a profit.
Jagdeo remains adamant that the lies emanating from the Administration have been overshadowing the core issues surrounding his allegation of likely corruption.
He had earlier alleged that persons close to Ministers, including relatives, have been applying for Petroleum Exploration Licences and with no means to develop those concessions.
“Why else would they want to take control of something they cannot develop,” Dr Ramsaroop quipped, rhetorically adding that “as a businessman, I know profiteering when I see it.”
Jagdeo had also warned of foreign companies with some ‘unhealthy’ local contacts looking to cash in with some Ministers and their surrogates.
“These local companies aligned to Ministers, their families and their cronies have no means of finding hundreds of millions of US dollars to do the exploration work. Ramsaroop reiterated that, it would seem that their intention is to get these blocks and weeks later sell them on, to ‘sleeping clients’ who will again sell them on without any competitive process being followed.”
Speaking to the news at the beginning of this week that Total E&P Activities Petrolieres, a French owned oil exploration giant, had purchased a sizeable shareholding in one of the companies that are already operating in Guyana EEZ, Dr Ramsaroop said this happened literally a few months after this company got its licence.
“Who gave that licence out? It was the partnership… it was APNU and AFC (A Partnership for National Unity/Alliance For Change) that handed out petroleum blocks to operators Tullow and Eco when it took office.”
Ramsaroop was adamant that while he is not making any accusations against Eco – which sold a sizeable portion of its shares to Total – this is precisely the reason why the transactions being had and with whom should be done in a transparent manner.”
The economic advisor told Guyana Times “companies buy and sell shares all the time when they are publicly listed in order to raise capital among other reasons”.
According to Ramsaroop, “in this case we know who they and their practices are and we can gauge on whether anti-trust issues are being compromised. For the others, we don’t know who Trotman is doing business with when it comes to our national patrimony. These actions are a blatant disregard for transparency and open government. Don’t hide behind commercial confidentiality. It is important for the public to be kept abreast of actions which could damage Guyana’s economic prosperity and saddle the country and a new Government with a host of what is increasingly looking like dodgy deals which will have to be sorted out”.
He noted at the time too that, “I reference Minister Trotman not because I want to be picking on him, it is because of how the laws are set up.”
Ramsaroop pointed to the Petroleum Act which governs the sector at present and said all “of the powers lie with the Minister, not the President… I don’t even see a provision giving the President some sort of veto in the matter.”
The businessman and political author said too the situation at present, with little or no information in the public domain with regard to what is transpiring, is urgent enough for the Minister with responsibility for the sector to step up and face the music. “He must come out publicly and say what is going on,” Ramsaroop declared.
He continued “oil is a serious matter and these players out there doing business in the sector for years and years are not jokers and they don’t exactly fork out millions of US dollars for any transaction.”
Referring to an adage, Ramsaroop told this publication, “old people say, don’t take fire-stick to look night time, to see what you can’t see in the daylight.”
In calling for President David Granger to “take a more assertive stance over the matter given his penchant for publicly exalting transparency and accountability,” Ramsaroop said “for too long we have been in the dark on these backroom dealings with private luxury trips.”
He said the laws governing this sector have already been abused by this Administration during its two and a half years in power; maybe all this has to be known to the President.”
“We are at a critical time in this nation’s history; believe it or not the management and stewardship of that industry will determine the fate of this country for the next 100 years… they have already broken the petroleum laws, they have abused the Constitution, Guyanese need to get serious and wake up and realise that this is serious business.”
Speaking to visible signs of the mismanagement of the oil sector which is still only in its embryonic stage, Ramsaroop pointed to the fact that the Petroleum Act demands that every licensee be audited.

“Has this ever been done, no… We can find no evidence that this Administration has ever asked for an audit on the finances of these companies.”
According to the experienced business executive, “we must never forget, while these companies are investing money upfront, we will have to repay every dollar they tell us they spent, with interest.”
According to Ramsaroop, “any company can now tell us they spent any amount for anything and we have never asked for an audit so when they hand us the bill we will have to simply pay it without ever knowing what we are paying for.”
He explained that since “we are entering into profit sharing arrangements with these companies, it means that they will have to deduct their repayments first from any oil that is sold and whatever remains we split the profit, only thing is, if we never do an audit of what they are spending they can stick us with any bill.”
Ramsaroop said, “this is but one aspect of managing the industry that is already showing signs of weak leadership… how can we expect that these people are serious about national development into a first world country with clear trajectories… what we have seen is a Government that is only interested in itself, rewarding itself and is now treating the oil industry as if it was their personal piggy banks.”
He concluded, “Guyanese need to wake up and demand the right to know what Trotman and the others are doing with our natural resource especially with the reckless mismanagement we have already seen taking place… We are yet to hear anyone in Government speak comprehensively on a long-term national development plan. Do we even have a plan?”