Guyana should not auction remaining oil blocks – Oil Attorney

– says Constitution sets limits on use of natural resources

By Samuel Sukhnandan

A local attorney who has extensive experience working with many oil companies is cautioning the current Government against making rash decisions when it comes to the remaining oil blocks offshore Guyana. This attorney, Melinda Janki, has said there should be no auction of the remaining blocks.
Janki, who worked as an in-legal counsel for British multinational oil and gas company BP at its head office in London, said the first priority of the Government now should be to change the Petroleum Sharing Agreement (PSA) that Minister Raphael Trotman signed with Esso, Hess and Nexen. “The Government did not obtain competent legal advice. They did not obtain competent financial advice.

Obviously, the Government failed in its legal duties to the people of Guyana. They need to fix that before they do anything else,” Janki told Guyana Times on Sunday in an exclusive interview. Opposition Leader of Guyana, former President Bharrat Jagdeo, has called for the implementation of competitive bidding for the remaining oil blocks, or for the blocks to be kept for future generations.
Jagdeo has been extremely critical of Government’s handling of the PSA with these oil companies. However, Government has said that a process of both direct engagement and selective bidding would be used to allocate the remaining blocks. Minister Trotman has expressed that direct engagements with other State-owned companies, such as Brazil’s Petrobras, would be sought in the future, but Janki has reminded that the Constitution of Guyana sets limits on what can be done with Guyana’s natural resources. She pointed to Article 149 J, which states: Everyone has the right to an environment that is not harmful to his or her health or well-being; the State shall protect the environment, for the benefit of present and future generations, through reasonable legislative and other measures designed to prevent pollution and environmental degradation; promote conservation; and secure sustainable development and use of natural resources while promoting justifiable economic and social development. “Present and future generations” means that one cannot use up everything now. They must take into account children, grandchildren. You must put aside things for the future. This is not about infrastructure and other projects. That is out of date economics based on GDP (Gross Domestic Product) growth,” she opined adding that there is a legal duty is to hand on to the next generation an intact natural capital base.
According to her, this is clear from Article 36 of the Constitution, which also states that, “The wellbeing of the nation depends upon preserving clean air, fertile soils, pure water, and the rich diversity of plants, animals and eco-systems.” Janki maintains that money can’t be eaten, nor can oil be drunk.
“The Government has to comply with Article 36. They have to preserve clean air, fertile soils, pure water, and the rich diversity of plants, animals and eco-systems. Before they auction any blocks, they must correct the mistakes they have made in the deal with Esso, Hess and Nexen,” she added.

Oil contract
On the issue of the largest oil contract signed with Government, the British-trained Guyanese lawyer told Guyana Times that most people have failed to realize that the PSA is not with ExxonMobil, but with Esso, Hess and Nexen. “The focus is on Exxon, (but) the focus should be on these 3 companies. Who are they? What are their assets? Do they meet the requirements of the law? Has the Government carried out a proper due diligence investigation of these 3 companies?” she lamented. Janki said the criticisms about this agreement are too many for the Government to simply ignore. “These criticisms have to be taken seriously on the financial aspect of the deal… From a legal perspective, the contract is very unbalanced. The Government of Guyana has agreed to terms and conditions that give these 3 oil companies (an) unusual amount of benefits. For example, there seems to be no real mechanism to check what is happening. How will Guyana know something as basic as how much oil comes out?”
The attorney said the contract should be replaced by something that is fair to Guyana and the people of Guyana. She said it is not a matter of being pro- or anti-Government, but a matter of the national interest. “This is a matter of law. The Government owes a legal duty to the people of Guyana. If the people of Guyana are not satisfied with this deal, if they are not satisfied with what the Government has done, then the people are perfectly entitled to object to the deal, and to insist that the terms of this deal are altered,” she explained. She said ministers cannot just sign any deal that they like. A minister, she said, must exercise his or her power for the benefit of the country. Therefore she believes there is scope to change the contract.