Lo­cal com­pa­nies seek­ing stake in re­main­ing oil blocks

-Trot­man says gov’t wel­comes in­ter­est

Stabroek News Sunday - - FRONT PAGE -

Al­though gov­ern­ment favours the pres­ence of oil ma­jors here for strate­gic pur­poses, it is also wel­com­ing the in­ter­est be­ing shown by Guyanese com­pa­nies in the coun­try’s re­main­ing oil blocks, ac­cord­ing to Nat­u­ral Re­sources Min­is­ter Raphael Trot­man, who says it is also im­por­tant that lo­cal firms have a stake in the de­vel­op­ing oil and gas sec­tor.

Cur­rently, the gov­ern­ment is seek­ing to find an in­ter­na­tional firm to ad­vise on the best way to mar­ket the coun­try’s re­main­ing oil blocks, which have at­tracted sig­nif­i­cant in­ter­est due to the hy­dro­car­bon dis­cov­er­ies that have been made by ExxonMo­bil and its part­ners.

Trot­man has al­ready said that US oil ma­jor Chevron, Brazil’s Petro­bras and France’s To­tal are among com­pa­nies seek­ing the few re­main­ing oil blocks here.

In an in­ter­view, he told Sun­day Stabroek that in ad­di­tion to the ex­pres­sions of in­ter­est from in­ter­na­tional com­pa­nies, lo­cal com­pa­nies have also come for­ward, which has been re­fresh­ing for the gov­ern­ment.

He noted that the ad­min­is­tra­tion be­lieves that al­though lo­cal com­pa­nies may not have the fi­nan­cial where­withal to ex­plore and pro­duce, this should not dis­qual­ify them from con­sid­er­a­tion as they could find in­vestors and en­sur­ing lo­cal con­tent is crit­i­cal.

Last week Sun­day Stabroek re­ported that two lo­cal com­pa­nies, JHI and Mid At­lantic Oil and Gas, had been granted con­ces­sions on the eve of the last general elec­tions by for­mer pres­i­dent Don­ald Ramo­tar, who said that while the com­pa­nies did not have the ac­tual fi­nances, the fact that they were lo­cal and had the ca­pac­ity to bring in in­vestors were con­sid­er­a­tions.

Ramo­tar told this news­pa­per that then Min­is­ter of Nat­u­ral Re­sources Robert Per­saud had made a case for JHI and MidAt­lantic Oil and Gas Inc., say­ing that they were lo­cal com­pa­nies, whose prin­ci­pals had lengthy as­so­ci­a­tions with the nascent oil and gas sec­tor.

‘A chance’

Trot­man said that while the grant­ing of the con­ces­sions looked “strange,” Ramo­tar’s ar­gu­ment for hav­ing lo­cals was sound and pa­tri­otic.

“On the face of it, it did look strange. On the other hand, you are look­ing at a cri­te­ria that is not a fi­nan­cial abil­ity but if you have the abil­ity to bring other ma­jors with you. From what I read last Sun­day, some of the play­ers were not un­known to Guyana. I think you want to en­sure that there is some lo­cal con­tent—some coun­tries have leg­is­lated this. You don’t want to find that you have given away and given ev­ery­thing to the su­per ma­jors and Guyanese are left with­out hav­ing a chance or a stake. Guyanese may never have a chance and there is some be­lief of that as well. I’ve since seen names as­so­ci­ated with JHI—Mr. [Edris Ka­mal] Dookie, of course [and] I’ve seen for­mer for­eign min­is­ter Rash­leigh Jack­son as a spokesper­son for them, so there seems to be some kind of lo­cal con­tent with this com­pany that may have in­flu­enced the for­mer pres­i­dent,” he said.

“As I have said, we want com­pa­nies that have a strong track records, in­so­far as their ca­pac­i­ties, tech­ni­cal and fi­nan­cial, which would in­clude they em­brace Guyanese…,” he added, while say­ing that there has been no di­rec­tive per­tain­ing to an in­ves­ti­ga­tion of any of the con­tracts signed with the lo­cal com­pa­nies.

Trot­man added that the gov­ern­ment would love to see Guyanese com­pa­nies in the up­stream oil and gas in­dus­try and was pleased to see the Be­harry Group sub­mit­ting a pro­posal but also noted that it would re­quire find­ing ma­jor fund­ing.

“We would love to know that there are com­pa­nies indige­nous to Guyana. I know that one group, the Be­harry Group, had shown an in­ter­est. There is an­other, NABI, but to put down a deep well off­shore, you need fund­ing. Hun­dreds of mil­lions… it re­quires find­ing a way to give Guyanese a way of par­tic­i­pat­ing,” he said.

Trot­man also pointed out that com­pa­nies buying into sec­tors then seek­ing in­vestors is com­mon in the ex­trac­tive sec­tor.

“You have squat­ting on lands for min­ing. Small min­ers com­plain that a few big [min­ers] are given most of the min­ing land. It is the way the ex­trac­tive sec­tor has worked for decades. It is not al­ways in the best in­ter­est of the sec­tor but it is how the sys­tem works some of the big com­pa­nies go out and sell and find oth­ers and go find in­vestors,” he said.

“It is not al­to­gether an im­moral thing, I think it just has to be man­aged bet­ter. Quite frankly, I be­lieve that every gov­ern­ment has a duty and re­spon­si­bil­ity to em­power Guyanese, sep­a­rat­ing em­pow­er­ment from greed or fos­ter­ing greed. But I do be­lieve that we do have a duty to in­form Guyanese… there is noth­ing im­moral in hav­ing lo­cal peo­ple in­volved in the value chain but I be­lieve it should be struc­tured and man­aged,” he added.

‘Tak­ing time’

Mean­while, Trot­man said that in seek­ing the help of an in­ter­na­tional firm to ad­vise on the mar­ket­ing of the re­main­ing oil blocks, the gov­ern­ment is tak­ing care in choos­ing one that is rep­utable.

“There seems to be the in­di­ca­tion that every day some­thing should be hap­pen­ing. I think we need to take our time choos­ing the firm and also in al­lo­cat­ing what is left. We are look­ing at in­ter­na­tional law firms and in­ter­na­tional ac­count­ing firms… of re­pute,” he said.

“We do have a list which was gen­er­ated from sev­eral min­istries but I don’t have it in front of me now. The idea is other coun­tries—Brazil, Mex­ico [for ex­am­ple]— they would have done auc­tions etcetera and would have done in­ter­na­tional ne­go­ti­a­tions, so the idea is to get the ben­e­fit of that… to dis­cuss what it is we want to of­fer, when and where,” he added.

Trot­man stressed that for the David Granger-led ad­min­is­tra­tion, it was not “only how much money we can earn. We are also look­ing for a com­pany that has a good en­vi­ron­men­tal track record, good [cor­po­rate so­cial re­spon­si­bil­ity] cre­den­tials… we look for com­pa­nies that have the ca­pac­ity and the courage to stand up [for] those con­cerns,” he em­pha­sised.

Raphael Trot­man

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