Guyana only has 24-day fuel storage capacity – Jagdeo
Oil exportation licence scrapping
…says cancellation of contract unwise
Opposition Leader, Bharrat Jagdeo said that Guyana only has a mere 24 days fuel reserve capacity, pointing that the decision to revoke an oil exportation licence granted to China Zhonghao Inc is not a wise move for the country.
Jagdeo made this comment at a Wednesday afternoon news conference at his Party’s Robb Street, Georgetown headquarters.
According to the Opposition Leader it is odd the Government would want to deny a company which wants to invest in Guyana’s bulk fuel storage capacity, noting that the State oil company, Guyana Oil Company (Guyoil) having a measly 14 days storage capacity, which simply means, if the country is unable to import fuel for more than three weeks it will be out of supply.
“Some countries try to encourage people to build more storage… we have 24 days of storage capacity. We should encourage people to invest and build more storage capacity. The Chinese can’t fetch away the tanks when they build them there, they can’t fetch them back to China, they are investing in our country,” he argued.
The former President rhetorically questioned why the Government would go after a legitimate company, which was intended to boost Guyana’s low bulk fuel storage capacity.
Jagdeo also lambasted the APNU Administration for what he described as a duplicitous approach, pointing to a recent statement by Foreign Affairs Minister Carl Greenidge, who said that the Governments of Guyana and Brazil were holding discussions to approach the Chinese Government to fund the Linden to Lethem Highway contraction and other infrastructural projects here.
“So on one hand there is this big assault on the Chinese companies … and then on the other hand they are looking for money from the Chinese Government to build the road from Brazil to Guyana and the other infrastructure… looking for money from the Chinese Government and on the other hand chasing away all the Chinese investors,” Jagdeo highlighted.
Jagdeo urged the Chinese Ambassador to Guyana to intervene and say clearly to the Guyana Government that the harassment of Chinese investors must cease.
Abide by the laws
Jagdeo also made it clear that if any company, Chinese or otherwise, break the laws of Guyana in anyway, then they must be sanction; however, the Government must not target these companies because of a hidden agenda.
“I must point out that the Chinese and any foreign investor must comply with all our laws. If they sign agreements, like BaiShanLin and the others, they must comply, if they don’t comply then there must be penalties, but they must not be treated unfairly,” he reasoned.
Possible litigation costs
Earlier a legal expert told Guyana Times that the State faces the possibility of humongous litigation costs if the Chinese take legal action over a breach of contract without any solid justification.
“Contracts can only be terminated for just cause in accordance with the terms of the contract, since many contracts provide grounds upon which they can be terminated,” the expert, who practises civil law… In other words said “a contract cannot be whimsically and arbitrarily terminated. If that happens, the affected party can launch legal proceedings for damages and compensation for wrongful and/or unlawful termination of the contract and that can run into hundreds of millions of dollars depending on the subject matter of the contract,” the civil lawyer outlined.
The expert said while not being fully privy to the terms of the contract, based on the trend in recent months, said that there seems to be some misperception by the Government that contracts signed prior to their assumption to office could be arbitrarily quashed.
“The Government seems to believe that they are not bound by contracts entered into under the previous Government. That is a terribly flawed view. Contracts with the State of Guyana, entered into by the Government of the day, continue to be enforced, notwithstanding that there may be a change of government,” the expert highlighted.
The Government and the company have not officially commented on the termination of the contract.
Only recently there were reports of fuel smuggling in Guyana with prominent businessmen names being called din the illicit ring. In one instance, the High Court granted an injunction after several local businessmen moved to the court following accusations of inducement to smuggle fuel from Venezuela.