Ramon Gaskin calls for judicial review of Esso Production Sharing Agreement
Local activist, Ramon Gaskin, last night called for support to challenge the legality of the Production Sharing Agreement (PSA) between the Government of Guyana and ExxonMobil affiliate Esso Exploration and Production Guyana Limited by way of judicial review.
“They does carry plenty things to court…we can carry this to court”, said Gaskin during a meeting organised last night by a group referring to themselves as “A Fair Deal for Guyana A Fair Deal for the Planet”, and held at the Critchlow Labour College.
Gaskin said he has been advised that judicial review proceedings are likely to cost approximately $1 million, as he pledged $100,000 toward the legal fees, and invited others to contribute. One member of the gathering noted that if one thousand persons contributed $1000, enough funds will be raised. By the end of the meeting, several persons had made individual $1000 contributions, while one attendee contributed $5000.
Gaskin said the basis of the legal challenge would be the illegality of the 2016 PSA, but more specifically, the fact that several terms in the contract are contrary to the Petroleum (Exploration and Production) Cap Act, 65:04, which was promulgated to regulate the prospecting and production of petroleum, and all connected matters.
Section 5 (1) of Guyana’s Judicial Review Act sets out several possible grounds on which judicial review will be entertained, while Section 5 (2) states that the grounds stated in Section 5 (1) do not represent an exhaustive list of all available grounds.
Illegal distribution of oil blocks
Gaskin iterated that Esso has been given 600 blocks under one licence, whereas the law only permits 60 blocks to be given out under any one licence.
Royalties
Regarding royalties, he noted that the agreement provides that royalties are only payable on petroleum which has been produced, and sold, arguing that this is contrary to the Act, which provides that royalties are to be paid on any petroleum produced.
Section 45 (1) provides that the holder of a production licence shall, in accordance with his licence and the Act, pay to the government royalty in respect of petroleum obtained by him in the production area to which the licence relates.”
Meanwhile, Article 15.6 of agreement states that “the contractor shall pay… a royalty of two percent (2%) of all petroleum produced and sold, less the quantities of Petroleum used for fuel or transportation in Petroleum Opertations, from all production licences subject to this agreement.” Insurance
Gaskin also said that while the Act proscribes a company being allowed to self-insure, the agreement allows Esso the opportunity to do so, which opportunity it had taken.
Article 20.2 (b) of the agreement provides that “subject to the Minister’s approval…the Contractor shall have the right to selfinsure…”
Operation
Gaskin also said that Esso will be permitted to recover more operational costs than it is legally entitled to due to the fact that the term ‘operation’ is given a wider application in the agreement, when compared to the Act.
The Act, under section 2, defines production operation as meaning “operations carried out for, in connection, or with the production of petroleum.” Meanwhile, Gaskin says, the manner in which operation is explained (under Article 11 of the agreement) makes it applicable to operations not contemplated by the Act.
These points were also presented by Frederick Collins of Transparency