Jagdeo demands Govt come clean on Exxon’s US$20M bonus

…asks “where did the money go?”

One week after making a promise to enquire of ExxonMobil whether a multimillion-dollar signing bonus was indeed paid to the Government, Opposition Leader Bharrat Jagdeo has said that he has information that would suggest that the Government has indeed collected the bonus.

The Opposition Leader on Wednesday told the media that he could ‘reasonably confirm’ that it was true, especially since members of Government have neither confirmed nor denied the allegation when confronted.
“They received this money it seems, almost a year ago. If this turns out to be true, then I believe that the entire Government should resign because this is if you cannot be transparent about receipts from a company or from any company in Guyana, particularly a company in the extractive sector…”
Jagdeo said that may be the most appropriate thing to do, especially since Guyana was now seeking membership from the Extractive Industries Transparency Initiative (EITI), an organisation that promotes open and accountable management of oil, gas and mineral resources.
He also queried the whereabouts of the money. “If this turns out to be true and the Government received the money and (Finance Minister) Winston Jordan did not know about this, then where did the money go? And if he does know about it and he lied to the country saying he did not know about it, then that is just as bad.”
The Opposition Leader said he still planned on asking ExxonMobil about the bonus when he met with its representatives. However, he noted that the matter was of grave concern if it turned out that Government did in fact receive money from ExxonMobil and did not tell the nation.
Jagdeo promised to place this issue on the front burner until the truth was revealed. He said the issue has languished in the media, because no one felt that any Government would take such a move.
The allegation about Government receiving this bonus was first made by Chartered Accountant and Attorney Christopher Ram. Ram had said that this payment may be one of the reasons why Government was not disclosing the new contract between itself and the US oil giant.
Government’s Petroleum Advisor, Dr Jan Mangal has said he had told the Government to release the contract in the interest of transparency, but there have not been any comments from Government.
Natural Resources Minister Raphael Trotman has been tight-lipped in regard to receipt of this alleged bonus. Repeatedly avowing that releasing the contract could have national security ramifications, and that the Government has been “advised” against such, Trotman has said the release of the contract is not his decision, but Cabinet’s.
The Stabroek Block is 6.6 million acres. Esso Exploration and Production Guyana Limited (Exxon’s subsidiary) is the operator, and holds a 45 per cent interest in the Stabroek Block. Hess Guyana Exploration Ltd holds a 30 per cent interest, and CNOOC Nexen Petroleum Guyana Limited holds a 25 per cent interest.
In June 2017, ExxonMobil was granted its formal production licence. Before that, reviews were done of the technical and environmental aspects of the Liza Project Development Plan submitted by Esso Exploration and Production (Guyana) Ltd.
As per the agreement the coalition Government made with Exxon, it will be two per cent royalty per barrel of oil and a 50/50 share of profits. This two per cent is, however, below the global average.
The Government has justified the two per cent royalty by contrasting it with the 50/50 share of the profits, an arrangement that the Government has said is a reasonable one, arrived at through the advice of experts. Some had opined that a revenue-sharing arrangement would be a better option than a profit-sharing one.
There has been a flurry of activities in the Stabroek Block, since ExxonMobil’s 2015 oil find in Guyana. In May of that year, Exxon confirmed that more than 295 feet of high-quality oil-bearing sandstone reservoirs had been encountered at its Liza 1 exploration well.
In late June 2016, Exxon’s drilling results at Liza 2 revealed more than 58 metres of oil-bearing sandstone reservoirs in Upper Cretaceous formations. The company has announced that it had made its third significant discovery (Liza 3) in its drilling explorations offshore Guyana.
Drilling on Payara well began on November 12, 2016, with initial total depth reached on December 2, 2016. In January of this year, the oil giant had announced it had struck oil in its Payara-1 well.