October 17, 2018 issue | |
Opinions |
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More on Oil |
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The news from Guyana on the evolving issue of managing the oil resource that could emancipate Guyanese, while providing a good return for investors, is troubling. The exploitation of oil should benefit the general population and not reigning politicians, family and friends. Local journalists have long noted Government’s lack of transparency, and questioned the secrecy of the agreement with Exxon-Mobil (EM). The Company declared no objection to its release, but Government stalled, for questionable reasons, and finally released it last December. It confirmed the suspicion |
that EM had paid US $18M to Government as a signing bonus, which was deposited in a secret account, not the Consolidated Fund. Recently, the parties signed a new secret agreement, with allegations of a US $20M bonus, again not disclosed, Finance Minister Harmon offering snide responses to lawyer Christopher Ram’s enquiry. There is an overwhelming need for a strong legal base to regulate the industry; define its ethical and moral behaviour, its obligations; manage the revenue; secure its sovereign wealth fund, guided by the Santiago Principles; specify the responsibilities, duties and actions of each partner; audit finance, compliance with the laws and the agreement; and define severe penalties for corruption and other wrong-doing. Too many industrial contracts lack teeth. EM is not the only player in the game. ECO Atlantic (Toronto) has a 15% share in the Orinduik Block with Tullow (UK) 60%, and Total (France) 25%; they have identified close to 3 billion barrels, which they propose to drill next year ahead of EM. Will the underpowered APNU government be able to handle all this? I doubt this, as it effectively draws mainly from its supporters. Has it really shed the divisive Burnham doctrine of “paramountcy of the party”? To their credit, the local media have insisted on transparency, and have noted the many avenues for corruption and blatant self-aggrandisement, nurtured by successive governments in the last 50 years, and likely to increase, lubricated by oil. An obvious one is the use of Guyanese companies – middlemen or lobbyists – to get government favours for overseas oil service companies. The numbers of new faces in the hotel lobbies or Ministry waiting rooms should tell. How many non-white faces are there? If any, make sure it’s not a Tobiang, with a suitcase full of cash and jewels, as he recently revealed in Brazil. The scene is repeated all over the developing world, where leaders fatten on payola by rich industrialists who couldn’t care less about the people or the environment. This has not changed since the dawn of imperialism and laissez faire capitalism. But one can be alert and create strong laws and an ethical justice system to deal with corruption. For a year President Granger has had an expert in off-shore petroleum mining, Dr Jan Mangal, an expatriate Guyanese with 18-years’ experience, 13 working with Chevron on offshore oil, completing his projects on time and under budget, in the Philippines, USA and elsewhere. But his contract was terminated earlier this year, most likely for speaking bluntly, at a UG seminar and elsewhere, on Guyana’s unpreparedness, noting the misplaced trust in EM, and that the 2% royalty was below world standards. He had urged the hiring of “experts” on offshore oil, besides him, and suitable technical staff for the Ministry of Natural Resources, complaining that none had been procured in two years. He opposed a National Oil Company, despite positive comments from Chatham Consulting of London. He had advised on structuring the industry, management, and the need to safeguard the National Fund, e.g. by engaging an experienced and trustworthy Bank to assist the Bank of Guyana and other financial institutions, in an area where they had no experience, and the regional models e.g. Trinidad and Jamaica, were failures. Despite a century of oil wealth, Trinidad lacks necessities for over half the population, and loses skilled people by migration. It gutted its agriculture and abandoned sugar in 2007. Its economy is lopsided, heavily reliant on petroleum, now mainly gas, and has had negative growth in the last few years. Like Guyana, its politics is based on race, although eliminating race will not guarantee success; witness Jamaica, where both major parties are similar racially, by people and philosophy. The project needs an independent oversight, outside of EM and Government. The industry needs stability, and therefore must not be run by intermittent politicians. Hopefully, the pending legislation to govern it will be thoughtful and comprehensive, giving a solid base for regulation and financial management. |
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Photograph a window to the past |
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There are a few early photographs of the family that I recall. There is “The One”, meaning it is our very first photograph of family members, as far as I know, that goes back to late 1950s with my auntie wearing her wedding dress. She is obviously the centre of attention; standing next to her is a phlegmatic and unimpressed grandfather, and then my young uncle, who is looking warily into the camera with eyes wide and appears ready to flee, his young body tense in the micro-moment, anxiously awaiting the unexpected. |
This photograph is the only window the family has that captures a major early event, which was the wedding day of my auntie. The details are few that have been passed down on the how, and why, this photograph came to be taken. |
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