Guyana and ExxonMobil: When a wrong is promoted as right – By Adam Harris

When a wrong is promoted as right – By Adam Harris

 

Oct 08, 2017  Features / Columnists, Adam Harris

There is a basic rule that states, “If something accrues from an illegality then that thing is also an illegality.” Simply put, you cannot do something wrong and claim that the end product is right. The end product may be acceptable but certainly not right.

Robin Hood was the epitome of doing something wrong and claiming that what he did was right because he would rob the rich and give to the poor. He was glorified. The society chose to ignore the wrong because the end result was what mattered to them. The Sheriff of Nottingham, however, wanted Robin Hood for the wrong.   

Two weeks ago it transpired that Minister of Natural Resources, Raphael Trotman, renewed an arrangement with ExxonMobil for the continued occupation of 600 oil blocks. There should have been nothing wrong with that but it turned out that the oil giant should not have been given more than sixty blocks in the first instance.

The upshot is that ExxonMobil has made some significant oil discoveries that could only redound to the good of Guyana. That is a good thing for this country that has been wallowing in poverty for all of its existence.

The then President Janet Jagan allocated the 600 blocks when she should have allocated 60. Christopher Ram made this disclosure even as he criticized Trotman for failing to correct a wrong. There was talk in some circles about Trotman being unaware of the conditions; that he did not study the law.

Interestingly enough, Opposition Leader Bharrat Jagdeo said that the country should praise Janet Jagan for doing what was palpably wrong. This is the position that leads to serious problems in other areas. We often ignore wrong things for reasons best known to ourselves only to regret them later when these wrongs morph into even greater wrongs. Laws should be respected regardless of the outcome.

I am one who appreciates the operations of the oil giant. For starters, others had explored the area in which the oil giant is working and came up with nothing. Using its vastly superior technology ExxonMobil drilled to unimaginable depths. The company drilled to a depth of almost five miles.
Last week it announced another significant discovery making Guyana a country with a bright future in oil. The major issue is that the oil giant, given its reputation in other countries, would take the lion’s share. Some believe that it would fudge the books to expand its expenditure and thus claiming expenses beyond what it spent.

I don’t think that is possible in this day and age when there are so many ways of determining the cost of the exploration. It is not that Exxon is the first company to explore for oil so there would be comparative records.

In addition, the company has partners who would be aware of what is happening. These partners would have had to approve the various expenditures which are no doubt humongous. In its wildest dreams Guyana could not have achieved anything like what the oil company has achieved.
Guyana is promised two per cent in royalties from every drop of oil that is extracted. It is also promised 50 per cent of the profits. The government has since said that it would take its fifty per cent in oil.

Guyana has had approaches from other countries offering their refineries. I am not aware that a decision has been taken. I also know that there has been talk about setting up a refinery in Guyana. From my layman’s point of view, such an expenditure would not be wise when we could use that money to do so many other things that we wanted to do.

What I do know is that the oil discovery has created a condition where destabilization is a distinct possibility. The political opposition is said to be doing its best to destabilize the government because it is seeking a return to power.

This is a political party that became filthy rich when Guyana had its meagre resources. Imagine what would be the state of affairs in an oil economy. Trinidad is a classic example. Over the years there have been prosecutions for massive corrupt activities largely because that country changes its government ever so often.

Guyana has said that it would not make the mistake of forsaking those sectors that it has. Agriculture is one of the mainstays of the economy. To forsake it would be to condemn the people of Guyana to revert to the days when they imported just about everything. Trinidad is in that bind. The oil caused the people to splurge.

Today, with the lowering of the oil price, Trinidad no longer has the kind of sporting money so it has gone back to the basics. Guyana says that it has learnt from all those countries that had an oil fortune and are crying today.

But back to the initial granting of excessive blocks to the oil company. That effectively shut out any other oil company that might have developed the technology and could have challenged the oil giant. Further, it would have been better to have the oil giant apply for more concessions as it progressed.

We should appreciate that something was wrong. For Jagdeo to suggest that Mrs. Jagan should be sanctified is sending the kind of message that this country should not tolerate. Indeed I am thankful that things worked out but at the same time, principles must be adhered to.

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Comments

  • Janet James  On October 10, 2017 at 6:55 am

    This Agreement wirh Exxon oil and Janet Jagan can be changed by a novation. The names of the parties to the Agreement just have to be changed. A reputable commercial lawyer should know this. They do not have to agree to 600 oil blocks.
    Without a good, experienced commercial lawyer Guyana will be ripped off.

  • Janet James  On October 10, 2017 at 8:34 am

    Novation, in contract law and business law, is the act of either: replacing an obligation to perform with another obligation; or. adding an obligation to perform; or. replacing a party to an agreement with a new party. This Agreement can be changed by novation.

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