Guyanese Online

Canje and Kaieteur Oil blocks given out under suspicious circumstances —September 17, 2020 In “News” (SEE ARTICLE BELOW)

Application for oil block and other company… Integrity Commission should probe if SARA, other public officials declared their business interests – Opposition —July 10, 2019 In “News”

SARA explores possibilities of rescinding Canje, Kaieteur Blocks  —June 2, 2019 In “News”

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GUYANA: Canje and Kaieteur Oil blocks given out under suspicious circumstances

 Sep 17, 2020  News  — By Kemol King  – 

Controversy continues to surround the suspicious giveaway of the Kaieteur and Canje blocks by the People’s Progressive Party Civic (PPP/C)’s Donald Ramotar administration just before the 2015 General and Regional Elections and ExxonMobil’s announcement of its first oil discovery in the Stabroek Block.

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Former Minister Robert Persaud

It has been over a year since former government officials, including former President Ramotar and former Minister of Natural Resources, Robert Persaud, were questioned by Kaieteur News about their involvement in the signing away of the oil blocks to companies who appeared not to have the sufficient track records or wherewithal to conduct deepwater drilling activity in those blocks. As if they recognised they were in over their heads, those companies sold stakes in the two blocks to oil major, ExxonMobil.

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This raised even more red flags about the situation, as ExxonMobil – now the operator – appears to have disregarded a policy which required it to conduct its due diligence before assuming control of the licences.

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Former President, Donald Ramotar

BACKGROUND
The Canje and Kaieteur blocks were signed away on March 4 and April 28 respectively, according to Global Witness (GW). The Kaieteur Block stakes were split 50/50 between a company called Ratio Energy, then represented by an Israeli-based lawyer named Richard Roberts, and Ratio Guyana, owned by the Israeli company, Ratio Petroleum which has some natural gas drilling experience, Global Witness said. The anti-corruption watchdog said that Ratio Energy was sold in February 2017 to Cataleya, a company run by two miners, the Canadian Mike Cawood and the Guyanese Ryan Pereira. It noted Pereira’s earlier involvement in the Kaieteur licence as the Guyanese representative for Ratio Energy in April of that year, when the company received the block.

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The NGO said that Exxon bought 50 percent of the Kaieteur Block in March 2017, paying US$455,000 to Ratio Guyana. GW said that Ratio Petroleum reported that Exxon also paid US$350,000 to Ratio’s joint venture partner on the block. Since Ratio Energy was bought over, GW believes that the money went to Cataleya which notably, bought over Ratio Energy just a few weeks before Exxon’s purchase.

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In its report ‘Signed Away’, the watchdog said that the deal between Exxon and Ratio was in the works since July 2016, shortly after the lopsided Stabroek Block production sharing agreement (PSA) was finalised by d former Natural Resources Minister, Raphael Trotman.

When GW sought explanations from the owners of Cataleya with questions about their histories in oil and their obtainment of the Kaieteur Block, Cataleya and Cawood appeared to skirt questions, insisting that they acted in compliance with the law. Pereira did not respond.

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Roberts, who represented Ratio Energy before it was bought over, did not take kindly to GW requesting a comment. He said that the “assumptions” in its report were “unfounded” and that his law firm plays by the rules.
The other shareholder in the block, Ratio Guyana, and its owner Ratio Petroleum, said that the Ratio group has been active in the industry for decades and touted assets in several countries in Asia, Europe and South America. The statement also pointed to its position on the Tel Aviv Stock Exchange and its “excellent reputation and corporate ethics”.

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As for the Canje Block, it was signed away to a company called Mid Atlantic, said to be run, at the time, by Guyanese businessman, Edris Dookie who went on to become the sole shareholder of the company in 2016. Later on, JHI Associates acquired a stake in the Canje Block. JHI’s website lists a Canadian, John Cullen, as the CEO and Director. GW said that Cullen founded the company. It also noted that public documents from JHI do not list its shareholders. However, GW did state that Dookie and Cullen “have a history together of holding Guyanese oil licences, but not a history of finding any oil in the country.”

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JHI said that it purchased seismic data packages on the basin after it acquired its share of the Canje Block, though 35 percent of the licence was sold to Exxon less than a year after Canje was awarded, GW said. The anti-corruption watchdog is unaware how much Exxon paid for the share. It said that no such information is available.
As with the Kaieteur Block, GW wrote to Mid Atlantic, JHI, Dookie and Cullen about their history in oil and their obtainment of the Canje Block. They coordinated responses that pointed to their “transparent” operations which they said was played by the rules, when acquiring the block.

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CORRUPTION RED FLAGS & EXXONMOBIL
GW said that the awards exhibit red flags, when it considers the way ExxonMobil went about acquiring the stakes. It said that the Natural Resource Governance Institute (NRGI) published in a guide for identifying potential corruption in extractive licences, that such would include unqualified companies obtaining licences and quickly selling them to third parties without doing substantial work themselves. In this regard, Ratio Petroleum had said that no seismic work was done in Kaieteur before Exxon bought its share.

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GW wondered whether Exxon did sufficient due diligence before acquiring interests in the blocks, and insisted that Exxon should have known who owned Kaieteur and Canje to ensure compliance with Guyana and US anti-corruption legislation.

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In its report, the NGO stated, “Exxon’s Anti-Corruption Legal Compliance Guide states that the company should undertake careful due diligence when acquiring certain licences.”
When it reached out to the oil major for a comment, Exxon did not respond directly to the specific issues noted but rejected the “accusations” made by GW as unfounded and baseless. Also, as it tends to do in such situations, the oil major said that it is committed to the highest standards of business, and that it plays by the rules wherever it operates.

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ROBERT PERSAUD AND DONALD RAMOTAR
Persaud and Ramotar were two former officials who took the spotlight when this issue emerged in 2019. Persaud, as Minister, was legally responsible for the awards. Though it was Ramotar who signed the deals, he insisted that he did so based on Persaud’s advice.

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Persaud told GW that the awards were made based on “briefing reports” prepared by the Guyana Geology and Mines Commission (GGMC)’s lawyers, but that he did not remember the lawyers’ names and could not provide the documents, since he was not in government at the time of the 2019 interview. Notably, Persaud is quoted as saying that though he knew some of the persons who signed documents for the companies, such as Dookie, he did not know who the beneficial owners are, though it was necessary for him as a Minister to know.

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He is also reported as saying he cannot provide the reports, which informed the decision. Global Witness said the information it has published on the owners and directors of the companies named in its report, is publicly available. The anti-corruption watchdog is of the view that Persaud will have had access to more detailed ownership information, as the law required the applicants to list the beneficial owners.

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“It would be extraordinary,” GW said, “if the reports upon which Persaud made his Kaieteur and Canje awards did not include this critical information.

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In a published letter following Kaieteur News’ expose last year, Ramotar insisted that the awards, which he said dated back to applications made for the Kaieteur and Canje blocks in 2012 and 2013 respectively, were transparent and above board. He said that GGMC processed and approved the applications in accordance with the law around late 2013, and that all fees were received by the regulator. He said that the delays in the signing of the agreements were owed to the Venezuelan navy’s seizure of Anadarko’s contracted seismic vessel offshore Guyana in late 2013.

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Ramotar, he claimed, did not know Guyana had oil when he signed away the Canje and Kaieteur blocks. Yet, an advertisement appearing in the newspapers on May 8, 2015, published by the party, had specifically headlined “…U.S. OIL GIANT EXXON STRIKES OIL IN GUYANA…”
There is a photo of Ramotar in the ad, smiling and shaking hands with staff onboard a drill ship, Deepwater Champion, as it conducted hydrocarbon exploration in the Stabroek Block.
Ramotar claimed that there was no confirmed commercial discovery in the area at the time of approval of the licences, though the advert was published days after he approved the Kaieteur licence.

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In May 2019, the State Assets Recovery Agency (SARA) announced that it would investigate the awards. It said that it had first decided to do so after former Presidential Advisor, Dr. Jan Mangal, said that the awards amount to daylight robbery. Nearly a year and a half later, SARA has nothing to show for it.