Given that the oil and gas sector in underdeveloped countries are generally characterised by mass corrupt practices, concerns abound that the present review of the 17-year-old contract between US oil giant ExxonMobil and Government could pave the path for Guyana to fall into this bracket.
A section of the gathering at the public forum on Wednesday
The lack of transparency regarding the review is only compounding the situation since unsuspecting parties can easily be induced to sign bad agreements that could potentially result in grave repercussions.
These sentiments were expressed by Opposition Leader Bharrat Jagdeo in response to a question posed by a concerned citizen during a public forum on corruption at the Sleepin Hotel, Brickdam on Wednesday evening.
Transparency International published that many countries rich in oil and gas are home to some of the world’s poorest people because too often, wealth stays in the hands of politicians and industry insiders because revenues don’t get published, payments made to governments to exploit resources remain secret, and bribery and embezzlement go unchecked.
During the event, Jagdeo questioned Government’s intention given the review and urged that these reasons be made public for scrutiny.
“What does a review mean: are you going to review it to give more benefits to ExxonMobil? Or are you going to review it to take more from ExxonMobil? Or are you going to review it to make the existing agreement more efficacious, effective, etc? …You have to come to the Parliament and say so people will know what you are seeking in the review,” he stated.
Upon the announcement of the contract review by Natural Resources Minister Raphael Trotman, Jagdeo raised suspicions that this move could lead to corruption and claims of “selling out of national interests”.
Additionally, he was concerned about the Minister’s involvement in negotiations with oil companies, pointing out that this is precisely one of the reasons why the world is pushing so hard for full implementation and adherence to the Extractive Industries Transparency Initiative (EITI), so as to ensure that politicians are somewhat barred from negotiations of terms with companies, thus preventing accusations of corruption or selling out of national interests.
But Finance Minister Winston Jordan had expressed that the review was natural and was in keeping with the fact that the circumstances have changed since the signing of the first agreement.
However, he did not elaborate on the nature of the review.
Sovereign Wealth Fund model
On the issue of the oil and gas sector, Jagdeo said it was the PPP/C’s intention to fight for a Sovereign Wealth Fund (SWF) model different to what is being used in Trinidad and Tobago.
According to him, the T&T model provides many loopholes for the executive arm of Government to create conditions through fraudulent forecasting of revenue to access the resources.
He explained that a model similar to Norway’s would be ideal since it outlines a multistage process of accessing resources from a SWF.
“So you have to have independent verification that the conditions are met, and the conditions must be real and objective, and then you have a parliamentary oversight. If we have such a model, oil can benefit the country in a way that doesn’t destroy the other sectors like in many other countries,” he explained.
