Cabinet not briefed about SARA’s oil blocks probe – Harmon

– but does not foresee independent body investigating same

Weeks after reports surfaced that State Assets Recovery Agency (SARA) has launched an investigation into the award of oil blocks to various companies, Cabinet is yet to be briefed on the matter.
The probe is being conducted into the award of oil blocks under the previous Administration. In light of this development, Opposition Leader Bharrat Jagdeo had called for a reputable international and independent firm to conduct these investigations, if the Government believes it is needed.
However, when contacted on Monday, Director General of the Ministry of the Presidency, Joseph Harmon was unable to say if the request will be considered.
“I won’t be able to say. As you know, SARA is an independent agency and they operate their own entity…The matter has not been dealt with at the level of Cabinet to determine how they will proceed with what they are doing,” Harmon explained.
“So, I can’t say whether, in fact, that is something they are pursuing, but I think they would be in a better position to advise on what course of action,” he further added.
On May 22, an article appeared in New York-based Bloomberg website, in which SARA Director Professor Clive Thomas is quoted as saying that there is a pending probe into the award of oil blocks and licenses to various companies.
“We’re investigating the issuance of the licenses, for example, and the various blocks. We’re building up a case. This is an area of investigation into how the blocks were allocated and the decisions that were made.”
“We’re at an investigatory stage so we can’t libel persons by saying that we found proof of anything. There’s enough evidence for us to want to continue the investigation,” Professor Thomas is quoted as saying in the article.
The Georgetown Chamber of Commerce and Industry (GCCI) has already warned that reports of such an investigation have the potential to harm the investment climate in Guyana.
“It’s dangerous for our investment climate, destroys investor confidence and it creates that level of uncertainty that we don’t need right now. We haven’t produced a drop as yet. And you already want to send bad signals to the international community? It’s highly improper, irregular and totally disturbing,” Charles Ramson Jr – the Chamber’s point-person on the petroleum industry – had expressed during a recent press conference.
The issue about reexamining oil contracts signed under the previous Administration comes at a time when there is a huge visiting Ghana delegation, led by their President Nana Akufo-Addo to Guyana.
Ghana is currently going through a similar situation where its Government has undertaken to review and possibly revoke 12 petroleum agreements. Reports are that the reason for this exercise is because of the inadequate compliance of the firms with their obligations.
In Guyana’s case, SARA is said to be investigating the award of concessions in the Canje Block offshore Guyana to JHI, Mid-Atlantic Oil and Gas, and Ratio Energy in March 2015, a few months before the national elections.
JHI Associates Inc (JHI) and Mid-Atlantic Oil and Gas Inc (MOGI), in a joint statement issued recently, made it clear that when they acquired the Canje Block, it was very much a high-risk investment on their part.
According to the companies, negotiations for the Canje Block began in March 2013, with the Canje Block licence itself being awarded on March 4, 2015 – before it was announced that explorer ExxonMobil struck oil.
“On May 20, 2015, the Liza-1 well was announced as a ‘significant discovery’. Over 40 wells had been drilled offshore in the Guyana-Suriname Basin prior to Liza-1, and none encountered commercial quantities of oil or gas,” the joint statement had said.
The companies also confirmed that despite the fact that they are in the centre of SARA’s investigation, they have not been contacted by the agency. In addition, SARA has not contacted them to request any information.
“Neither company has been notified of any pending investigations into the award of the licence for the Canje Block. Both companies welcome the opportunity to discuss this matter with duly authorised agencies of the Government of Guyana at any time,” the joint statement had added.
Opposition Leader Bharrat Jagdeo had also welcomed the probe but contended that it cannot be independently and impartially carried out by SARA.
“…if the Government wants to do that, the Government should hire a solid international firm with a reputation and not have Clive Thomas do this, who is a member of their party,” Jagdeo had posited.

Head of SARA, Professor
Clive Thomas
Director General of the
Ministry of the Presidency
Joseph Harmon

Former President
Donald Ramotar