Ratio contract outlines 50% profit oil, 1% royalty for Guyana

first_imgNew oil contract releasedA contract signed between an international oil firm and the Guyana Government has been released, which shows that Guyana has accepted royalty payment of one per cent and a 50/50 profit-sharing arrangement.The contract which was released on Wednesday is that of Israeli-based oil exploratory firm, Ratio Guyana Limited and Government that was signed on the April 28, 2015.Ratio Guyana commenced negotiations with the previous Government for a petroleum licence within the ultra-deep water Guyana Basin area in mid-2012. AtRatio Guyana Limited operates in the Kaieteur Blockthe time, that area was known as “Annex B”.Negotiations were nearly completed when the October 2013 Anadarko/Venezuelan incident occurred. It took until the first quarter of 2015 before negotiations resumed.On April 28, 2015, according to the Natural Resources Ministry, the production sharing agreement was signed by both the then Government of Guyana and Ratio’s principals. The concession was then renamed the “Kaieteur Block”, and totals approximately 13,535 square miles.Ratio Guyana is in a joint venture partnership with Esso Exploration and Production Guyana Limited (EEPGL), a subsidiary of US oil exploration giant ExxonMobil, in the Kaieteur Block, offshore Guyana.Ratio Guyana Limited has a 25 per cent stake in the Kaieteur Block. Ratio Energy Limited has another 25 per cent of the Kaieteur Block while EEPGL has a stake of 50 per cent.The Kaieteur Block is located to the North and adjacent to the Stabroek and Canje blocks, approximately 250 kilometres offshore in ultra-deep water, where a 3-D seismic survey is underway. The Ministry said the release of this contract is in keeping with its commitment to release major contracts between the Government of Guyana and companies in the extractive industries.Close to two weeks ago, the Government also released a contract signed on February 12, 2013 with Canadian-based company CGX Resources Inc (CGX Energy).The agreement with CGX energy stipulated a 53 per cent: 47 per cent profit sharing. Under the ‘Cost Recovery and Production Sharing’ heading of the contract, it was found that the Government will receive a 53 per cent profit after recoverable contract costs have been satisfied for either crude oil and natural gas. CGX currently holds an interest in three petroleum agreements – the Corentyne, Berbice and Demerara Blocks – covering approximately 3.3 million gross acres offshore and onshore Guyana. The petroleum agreements between the Government and ESSO Exploration and Production Guyana Limited, CNOOC NEXEN Petroleum Guyana Limited, Hess Guyana Exploration Limited, were also released. These agreements also provides for a 50 per cent profit sharing and a two per cent royalty.The first oil contract to be released was that between ExxonMobil in late December 2017. However, this contract was only released following heightened public pressure from the general public.When it was released, it was revealed that it contains clauses for the company to put aside millions for local content, and makes provisions for them to be granted sweeping tax concessions. The contract was signed in June 2017 between the coalition Government, ExxonMobil and its partners in the Stabroek Block. In Article 15 of the contract, Exxon is exempted from paying Corporation, Excise or Value Added Tax (VAT) on its earnings from petroleum.Article 15.4 also provides for the Government itself to pay the company’s Income Tax. To facilitate this, the oil company has to submit tax returns to the Government. Article 32 also stipulates that Government cannot modify the contract or increase any fiscal obligation the company has.In addition to that, information was leaked to the media that Government secretly received US$18 million as a signing bonus from ExxonMobil which was kept in a private account at Central Bank. Since the revelation of this secret signing bonus, the emerging sector has been mired in controversy. Government had failed to disclose this transaction to the nation, despite several officials, including Natural Resources Minister Raphael Trotman, being questioned about it by the media.last_img read more

Who are the “anti-corruption advocates”? − Jordan questions

first_imgFinance Minister, Winston Jordan has taken to task, Former Auditor General, Anand Goolsarran over his recent claims that “the Government has not been moving swiftly enough to bring criminal charges against who abused the laws and public resources of Guyana, making specific reference to the former Chief Executive Officer of the National Industrial and Commercial Investment Limited (NICIL).Goolsarran in an article published in the tabloid-like Kaieteur Newspaper on September 9, 2016, titled “Govt must seriously commit to prosecuting those who abused laws, public resources – Goolsarran”, stated that Anti-corruption advocates were questioning whether Jordan has truly displayed an interest in seeing the former CEO of NICIL face the full extent of the law.Finance MinsiterWinston JordanBut, Jordan in a strongly-worded letter to the press queried who are the anti-corruption advocates raising the concerns.“I do not know who these “anti-corruption advocates” are. Do they include Anand Goolsarran who, in recent times, has set himself up as a transparency and accountability czar?,” Jordan questioned.The Finance Minister went on to remind the former Auditor General that regards to criminal proceedings against The former CEOor another official who is accused of a crime, there must be due process.“I am not a lawyer. Most of my professional life has been devoted to economics and finance. But even without the benefit of substantial legal training, I know that everyone is presumed innocent, until proven guilty. Facing the full extent of the law is a function of the outcome of police investigations and the judgment of the Director of Public Prosecutions, not the bleating of the anti-corruption advocates,” Jordan arrested. He noted too that even though there have been repeated explanations from the government that the Cabinet had established a process to deal with the forensic audits, there still seem to be unnecessary questions.Former Auditor GeneralAnand GoolsarranIn March of 2016, a Sub-Committee of Cabinet was appointed, consisting of Hon Khemraj Ramjattan, Vice President and Minister of Public Security, as Chairman; Hon Basil Williams, Attorney General and Minister of Legal Affairs and Hon Jaipaul Sharma, Minister within the Ministry of Finance to scrutinize the forensic audit reports to determine which of them dealt mainly with administrative irregularities and which entered the sphere of criminality.Forensic AuditGoolsarran was the auditor hired by the Government back in July 2015 to conduct forensic audit into the affairs of the NICIL and to make recommendations.The audit was completed and Goolsaran recommended criminal and/or disciplinary actions against all those responsible for violations, including failure to properly account for state resources under their control. This included the former Finance Minister, Ashni Singh, who was also the Chairman of NICIL. However the audit was said to have lacked credibility and integrity, since the recommendations against the holding company were shrouded with biasness and prejudice.In December 2015, Guyana Times was able to obtain a report which contained NICIL’s response to the forensic audit which was conducted by Goolsarran. These responses were not included in a copy of the audit report, “leaked” to pro-government media entities.In the report, NICIL made the point that the findings stated the audit report do not provide any evidence to any instance of a constitutional breach. In fact, Guyana Times was able to see the various legal opinions issued in favor of NICIL, from prominent local lawyers, that clearly contradict the assertions of Goolsarran in his report. NICIL’s response pointed to the existence of these opinions, including the fact that Goolsarran is not a lawyer. It also pointed out that there was no evidence of self-enrichment, that all the prior audit opinions of NICIL were clean audit opinions, and that there was a body of evidence showing that all major matters, Cabinet’s or the NICIL’s Board approval was evident. NICIL further pointed out that as a company, all actions were consistent with its incorporation documents which dated back to 1990.Bias and PrejudiceAdded to that, NICIL contended that Goolsarran’s position as former Auditor General gave him access to information and knowledge about the entity that would have been based on pre-2002 matters and circumstances thereby introducing potential risks for bias and prejudice in the forensic process where there is a conflict with his predispositions and the status quo. NICIL highlighted that this potential risk for bias and prejudice was demonstrated by Goolsarran’s emphasis on pre-2002 events in his executive summary and his minimal and “sometimes dismissive” reference throughout the report to the audits and clean audit opinions for every year from 2002 of the current Auditor General Deodat Sharma. Goolsarran audited NICIL from 1990 to 2002. NICIL had highlighted also that its contention of potential risk and prejudice was further supported by the forensic auditor’s two-part newspaper publication called “Accountability Watch” where Goolsarran, in his personal capacity, prior to conducting the audit, opined on several matters involving NICIL and made recommendations in his concluding remarks about what course of action he believes government should take regarding NICIL. These very conclusions were repeated in the recommendations of the report, NICIL posited.Meanwhile, NICIL opined that the forensic auditor failed to satisfy the main objective of the forensic audit by failing to provide any evidence which substantive law, accounting principle or government policy was broken, violated, breached or ignored. NICIL refuted all references by Goolsarran to his “so called legal positions”, to indicate NICIL possessed substantial legal advice to the contrary on these matters.Additionally, NICIL stated that the report fails to distinguish clearly, which matters are legal matters and which matters are policy matters. Moreover, it noted that in almost every case, there was no support to show where the law had been breached or the many cases of previous audits that do not reach this conclusion.It has been widely observed and commented, that without the former NICIL CEO and his team having sight of the final report, which they were promised before the start of the forensic audit, that the final audit report by Goolsarran was serially leaked to KN and SN. One KN reporter at a public press conference with Brassington in December, while on camera, stated that Goolsarran was speaking to her on what she was publishing on the NICIL report when the report had not even been shared with Brassington. Goolsarran subsequently denied this allegation to this newspaper. But observers have said that this KN reporter along with the leaked audit report, suggest that Mr Goolsarran independence and credibility can be seriously questioned and that perhaps the Institute of Chartered Accountants of Guyana and its overseas body, be formally invited to investigate these matters of Mr Goolsarran commenting in the media on matters when the Government is his client. The opposition has called on the Government to officially release the audit reports along with the responses of the responsible officials. To date, this has not happened.last_img read more