Guyana’s State Assets Recovery Agency (SARA) Wednesday said it has launched a detailed probe to determine whether corruption played any part in the previous government rushing in 2015 to award two oil blocks to hitherto unknown oil companies and individuals days after American oil giant ExxonMobil signaled it had found large deposits of oil and gas and less than a week before general elections.
Deputy Director, Aubrey Retemeyer said authorities are determined to find out who might have profited from the sales of the Kaieteur and Canje oil blocks that lie right next to the Stabroek block where ExxonMobil has far found 13 wells flush with oil and gas as it rushes to begin oil production as early as November. Exxon estimates that the blocks so far contain nearly seven billion barrels of oil and has said that it has not experienced such a strike rate of successful wells anywhere else in the world. Only two have come up dry so far.
Retemeyer told this publication that two companies — JHI Associates of Toronto, Canada and Mid Atlantic Oil and Gas of Guyana — were formed only in the past five years and are not known as oil producers anywhere else on the globe. “Yet they were handed the blocks without any public auction, without parliamentary oversight as the house was dissolved to facilitate general elections. There were no consultations with the opposition. There was also no signing bonus. We have to find out what laws were breached here and whether there was corruption,” Retemeyer said.
He said that despite official denials, the PPP knew oil was found as it had run a full page advertisement in local newspapers a few days before the May 11, 2015 elections announcing that Guyana had found oil and encouraging voters to give it an additional five-year term. It lost the elections to a coalition led by retired army general David Granger.
He said SARA’s probe so far has shown that Exxon has bought into both companies and has become the main operator as these firms were small, have no big assets nor any major history in the sector to boast about.
Worse yet, the Canje and Kaieteur blocks are in the ultra deep portions of the Guyana Basin. Only companies like Exxon, British Petroleum and a few others have the technology and ability to work in such deep waters. Yet these were given to unknown firms.
“Therefore, it is astonishing that these two unknown companies were awarded blocks. The timing is significant. We want to be able to answer the questions nationally. After all, Exxon had derisked the basin. If the then government had held on to these blocks or had auctioned them off, the country would have gotten billions of dollars. Something does not add up here. We will drill deep to find out what happened.”
SARA said Exxon and Total of France as well as Ratio Oil, an Israeli company moved quickly to buy into the blocks without having to pay any signing bonuses. Guyana got $18 million as a bonus for the Stabroek Block, a figure that was roundly criticized in Guyana.
Company spokeswoman, Deedra Moe has said that Exxon “followed all applicable laws and regulations in acquiring its government approved license” and would cooperate fully with authorities.
SARA said it will look at the movement of Exxon’s stock around the time these two companies became major players in Guyana and will also go over its annual report and stockholder information to see if there were any spikes that coincided with that period
“SARA is responsible for recovery of state assets. We are creating a special unit to focus on oil and gas. We will work with international partners with expertise in this area. We are not investigating Exxon. Our focus is on Canje and Kaieteur blocks and how those blocks were awarded.”