The renegotiated contract between US oil giant ExxonMobil and Guyana has been termed a “bad” by international non-governmental organisaiton, Global Witness.
The report names Minister of Natural Resources Raphael Trotman as the one who overlooked the poorly negotiated terms of the contract back in 2016.
The report on the oil industry in Guyana is titled: “Signed away: How Exxon’s exploitative deal deprived Guyana of up to US$55 billion”.
It states that evidence “suggests that Guyana got a bad deal because it may not have been well represented in subsequent negotiations by Minister Raphael Trotman and his team.”
The 28-page report was highly anticipated after leaked findings suggested that Guyana could lose up to an estimated US$55B because of the deal.
Global witness repeatedly described the deal as an “exceptionally bad one”, noting that Guyana could have benefitted tremendously if Natural Resources Minister, Raphael Trotman had capitalized on the country’s strong bargaining position.
“Trotman also failed to capitalize on Guyana’s strong bargaining position. During negotiations, he knew that the company was analyzing a new possible oil find,” the report stated.
ExxonMobil announced its first discovery of oil in 2015 and had its 1999 contract renewed in June 2016.
The oil giant has since announced the discovery of 16 oil wells which contain an estimated eight billion barrels of oil.
Global Witness also said that the deal was rushed, and had Minister Trotman waited for these results, Guyana could have benefitted from a better deal.
“Global Witness believes Trotman presented Exxon with feeble negotiation terms and ignored expert advice that more financial information was needed before he signed the license. 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, Trotman signed Exxon’s license” the report states.
The NGO also hinted at a possible conflict of interest involving Trotman, citing the fact that he shared the top leadership position in the Alliance for Change (AFC) with Nigel Hughes, whose law firm was at the time representing Exxon.
“As Natural Resources Minister, Trotman was legally responsible for assessing and approving or rejecting Guyana’s oil licenses. However, during the 2016 Stabroek negotiations Trotman had a possible conflict of interest. Trotman’s main political partner – Nigel Hughes – had served as one of Exxon’s lawyers on other matters, and Hughes’ firm periodically represents Exxon as a client” Global Witness wrote.
But the preliminary reports of these findings did not sit well top government officials who have since defended the integrity of the Executive.
On Sunday, Foreign Secretary and former Foreign Affairs Minster shared that “the attack [Global Witness] suggests that the government has somehow engaged in arrangements that are improper; arrangements that will not bring the maximum benefit to Guyana.”
He added that the government “has gone to great efforts to ensure that the works carried out by its ministers are fit and proper and that the ministers themselves are fit and proper ministers.”
The Government is expected to release a detailed response to the findings of the report today.
Guyana started oil production in December and the country’s economy is expected to see growth by more than 80% this year.