Global Witness report tells “corrupt” story of 2016 oil deal – Jagdeo
…Govt labels report as “baseless”
Natural Resources Minister Raphael Trotman continues to come under fire after a damning report by international corruption watchdog, Global Witness found that the 2016 oil deal he negotiated with US oil giant ExxonMobil could cause Guyana to lose billions.
During a rally on Monday evening at Enterprise on the East Coast of Demerara, Opposition Leader Bharrat Jagdeo commented on the report, alleging that corruption may have been afoot.
“It tells you the sordid story, the corrupt story, the incompetent story of how this country negotiated the contract. It speaks about Trotman being feted in Houston [Texas]…It speaks about them [the Government] refusing to accept the expert views about how much oil we had and where to order the declaration of Liza Two so that they could have been in a stronger negotiating position. It speaks about how they rushed through the contract. It speaks about every other thing – the $18 million signing bonus. That is why we are where we are today,” the former Head of State expressed.
Global Witness went on to report that Guyana’s team negotiated badly on the country’s behalf and ignored expert advice. As such, Jagdeo contended that with the current contract, Guyanese will see little benefits.
“They found oil under the PPP and then this Government came into office and struck us with that contract where very little comes to our people now. $55 billion US dollars we’re going to lose,” Jagdeo told the community meeting and was greeted with loud applause.
Commenting on adequate wages for Guyanese who work in the oil industry, he added, “No foreign company under the PPP will come and take advantage over us. This oil belongs to all of our people…. All of it can’t go to the foreign companies.”
The report titled “Signed away” was written by Global Witness, an international organisation with a long track record of exposing corruption and human rights abuses.
Among its recommendations was for Guyana’s Government to investigate the role played by the Natural Resources Minister in brokering the deal. It detailed the fact that Trotman arrived at the oil company’s headquarters in Texas in April 2016, whereupon he was put up first class in a nearby hotel and dined at an exclusive restaurant – all on ExxonMobil’s tab.
The company, according to Global Witness, had given Guyana 10 weeks to sign a new draft licence. When it comes to Trotman himself, the report noted that he did not spend much time negotiating at all.
The entire process, from when negotiations began in early April, concluded with a signed deal on June 27. According to Global Witness, they were able to confirm that at least three Guyanese officials; Trotman, GGMC Commissioner Newell Dennison and another GGMC staffer, Christopher Lynch, were part of the negotiations, although it admitted more could have been involved.
“For its part, Exxon had a large team involved in the negotiations, which included Oswald and then-Country Manager Jeff Simons,” the report states. “Despite Exxon’s demands earlier in the month, Trotman – responsible for signing Guyana’s oil licences – did not appear to spend his time in Texas negotiating.”
“According to a memo summarising his trip, the Minister instead toured Exxon’s new glass and steel offices. He and his colleagues were most impressed by the company’s facilities for keeping Guyana’s oil find samples: What was most striking was the very strong smell of oil that filled the room,” the report states.
This is despite coming up against a rigorous ExxonMobil team of negotiators. Global Witness noted that while Guyanese officials did seek an improved royalty, the oil giant was not very receptive to any substantial changes to the fiscal terms it got in the 1999 licence.
In addition, the report states Trotman was supposed to have had new information on the Stabroek Block that ought to have strengthened his hand during negotiations by capitalising on the fact that Guyana had something to offer on the table. But he did not make use of this opportunity.
“Trotman failed to capitalise on Guyana’s strong bargaining position. During negotiations, he knew that the company was analysing a new possible oil find. Trotman even thought the company would announce its results on a specific day: June 28 2016,” the report stated.
“But the Minister did not wait for these results, which would have allowed Guyana to assess Stabroek’s true value and which turned out to be one of the world’s largest recent finds. Instead, on June 27 (2016) Trotman signed Exxon’s licence.”
Meanwhile, in a statement issued late Tuesday evening, Government claimed that the report was “baseless” and rejected the report.
The Government claimed that the report is “agenda-driven and extraordinarily speculative”, adding that it appears as though it is seeking to influence the electoral outcome.
“Global Witness presented absolutely no evidence of corruption or malpractice on the part of the Government or its officials,” the Government of Guyana said.