December 12,2017
US oil company ExxonMobil did pay a signing bonus following the new agreement it clinched with the government on June 27, 2016 and why this was kept secret will pile pressure on the Granger administration over its claims to transparency particularly given concerns over accounting for revenue from the petroleum sector.
Stabroek News has seen correspondence (reproduced on this page) dated September 20, 2016 from the Ministry of Finance to the Bank of Guyana (BoG) pertaining to arrangements for the signing bonus. The letter did not specify the quantum of the bonus but commentator Christopher Ram said in October that he was told that US$20M was paid. This
statement was not contradicted by the government. Pressed for answers, Minister of Natural Resources Raphael Trotman would only say that that Cabinet would deliberate on the question of making the June 27 contract available to the public. On November 30, Minister of State Joseph Harmon said that the contract and presumably any information on the signing bonus would be made available sometime this month.
Aside from the secrecy over the bonus, the depositing of the funds at the BoG and outside of the Consolidated Fund would raise grave concern as this government when in opposition had been critical of monies kept outside of the Consolidated Fund and the accountability framework.
In the correspondence seen by Stabroek News, Finance Secretary in the Ministry of Finance, Dr Hector Butts wrote to the Governor of the BoG, Dr Gobind Ganga with the reference line ‘Signing bonus granted by ExxonMobil – Request to open bank account’.
Butts said in the letter “I shall be grateful if you would arrange for the under-mentioned Foreign Currency Account to be opened at Bank of Guyana, in order to receive a deposit in the form of a signing bonus to be given by ExxonMobil. This account should not be treated as part of the Bank’s reserves. Instead, the proceeds should be held in the currency of the deposit, that is, United States dollars, and invested in secured interest-bearing securities”.
Butts went on to say that the authorized signatories to the account were himself, his deputy, Louise Bouyea, Accountant General Jawahar Persaud and his deputy Jennifer Chapman.
The letter was copied to the Minister of Natural Resources, Raphael Trotman.
Who negotiated the signing bonus, the terms of such a payment and what has since become of the money are questions the government will likely face pressure over.
In February of this year, Trotman informed that minor modifications to the original contract with ExxonMobil subsidiary Esso Exploration and Production Guyana Limited (EEGPL) were made and had justified the non-disclosure by saying that only “salient points” of the contract agreement will be made public for security and other reasons.
“In so far as full disclosure at this point in time, I think government is of the view that full disclosure would not be to the best of the national benefit or national interest,” Trotman had told a media breakfast where his ministry and ExxonMobil provided updates on the nascent oil and gas sector.
The issue attracted additional public scrutiny when columnist Ram stated in October this year in Stabroek News that he understood that some US$20M was paid to the government as a signing bonus.
With Stabroek News consistently probing as to why the contract could not be made public, Trotman then said in October that he would take the issue of disclosure to Cabinet for discussion and guidance on the way forward.
“Nothing on the contract I am discussing. I would like to take this whole issue of the publication of the contract to Cabinet for guidance because it is not a Trotman issue it is a government position and I won’t be able to discuss it,” he said when asked about whether government had collected a signature bonus from ExxonMobil when a new agreement was signed with it.
Following Trotman’s position, in early November, Government’s Petroleum Advisor, Jan Mangal, said that he had advised government to make the contract public but believed with public pressure the contract would be released quicker.