Legal challenge looms over ExxonMobil-Guyana contract -Melinda Janki
Petroleumworld 03 26 2018
The ExxonMobil-Guyana contract could be facing a legal challenge. Several local critics are of the view that the grounds upon which the Government granted ExxonMobil a production licence last year are against the law.
One of the lawyers working on the case is Melinda Janki. Funds for the matter are being raised through the website:
Janki said that there are indeed enough grounds for the matter to be challenged in the courts. She noted, however, that one must be clear on who is on the other side of the deal.
The lawyer said that Minister of Natural Resources, Raphael Trotman, did not sign a deal with a big company called ExxonMobil. Minister Trotman signed a deal with three much smaller off-shore companies which are being represented by ExxonMobil.
These companies are Esso Exploration and Production Guyana Ltd, Hess Guyana Exploration Ltd, and CNOOC Nexen Petroleum Ltd. These three companies are all subsidiaries of other companies. Esso, for example, is a subsidiary of ExxonMobil.
Janki was also adamant that a minister cannot just do what he likes. The lawyer said that there are legal restrictions to his power.
She contended that if citizens believe Trotman has not acted correctly they can challenge him; they can challenge whether the Minister had the power to agree to all of the things that he agreed to in the petroleum agreement.
As for the Production Licence granted to the said companies, Janki said that this too can be challenged.
She noted that the Petroleum (Exploration and Production) Act Cap 65:04 says that the Minister has no power to grant a petroleum production licence unless the company has adequate financial resources and technical and industrial competence.
Janki asserted, “We know that in June 2016, Esso, Hess and Nexen did not meet the said requirements because the Petroleum Agreement says that Esso, Hess and Nexen ‘will have or will acquire the financial resources, the managerial, technical and industrial competence to carry out Petroleum Operations.”
She continued, “Did Esso, Hess and Nexen meet the legal requirements a year later when the petroleum production licence was granted? People are entitled to ask the Minister to show that these three companies met the legal requirements and if they don't think that he acted in accordance with the law, people can challenge him in court.”
Janki added that the law states that these three off-shore companies must make the most efficient and beneficial use of the petroleum resources concerned or they can't get a licence.
The lawyer queried, “Is there evidence that these three off-shore companies met this legal requirement for the most efficient and beneficial use?
“Again, people can ask the Minister to produce the evidence that this oil venture meets the requirement of being the most efficient and beneficial use of the petroleum resources.”
Janki emphasized that “beneficial use” does not mean “beneficial to the oil company.” The lawyer stressed that it means beneficial to Guyana – a point she believes that Minister Trotman appears to have missed.
News of this looming court challenge was first reported by the UK Guardian. Janki was also quoted by that media outfit as she provided additional reasons as to why the matter ought to be taken to court.
In light of the aforementioned, the Ministry of Natural Resources released a statement yesterday, categorically stating that it has fulfilled all legal requirements in the award of the production licence to ExxonMobil.
The Ministry noted that the Government is prepared and willing to present all facts in this regard to any court with jurisdiction.
The Ministry of Natural Resources further said that “this sort of action” is not unusual in emerging oil economies, particularly during the stage leading up to first oil at which Guyana currently is.
The Ministry said it is satisfied that its partners engaged in exploration and preparation for production, are taking every precaution in ensuring that there is minimal effect to the environment and that they are diligently putting systems in place to guard against any spills or mishaps.
The Ministry also sought to assure that it will continue to engage its partners – ExxonMobil, Hess and CNOOC Nexen – in ensuring that the interest of Guyana's waters and environment remains top priorities.
Story from Kaieter News
Kaieteurnewsonline.com 03 24 2018
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