AP NEWS

Guyana state agency gives details about oil blocks probe

May 29, 2019

GEORGETOWN, Guyana (AP) — Guyana’s State Assets Recovery Agency said Wednesday it has launched an investigation into whether corruption played a role in the previous government’s 2015 decision to award two oil blocks to little-known companies days after ExxonMobil signaled it had found large deposits of oil and gas.

The decision, which came less than a week before general elections, awarded the blocks to JHI Associates of Toronto and Mid Atlantic Oil and Gas of Guyana, which had been formed in the past five years and were not known as oil producers anywhere else on the globe, said agency Deputy Director Aubrey Retemeyer.

“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 told The Associated Press.

Retemeyer said authorities want to find out who profited from the sales of the Kaieteur and Canje oil blocks that lie right next to the Stabroek block where U.S. giant ExxonMobil has so far found 13 wells flush with oil and gas as it rushes to begin production as early as November. Exxon estimates the blocks so far contain nearly 7 billion barrels of oil and has said it has not experienced such a strike rate of successful wells anywhere else in the world. Only two wells have come up dry so far.

Retemeyer said Guyana’s previous administration 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 the government an additional five-year term. It lost the elections to a coalition led by a retired army general, David Granger.

The agency’s probe so far has shown that ExxonMobil bought into both of the small companies and has become the main operator as the firms had no large assets or major histories in the sector, Retemeyer said. He said the Canje and Kaieteur blocks are in the ultra-deep portions of the Guyana Basin and only companies like ExxonMobil, British Petroleum and a few others have the technology and ability to work in such deep waters.

“It is astonishing that these two unknown companies were awarded blocks. The timing is significant,” Retemeyer said. “If the then-government had held on to these blocks or auctioned them off, the country would have gotten billions of dollars.”

The agency said ExxonMobil and Total of France as well as Ratio Oil, an Israeli company, moved quickly to buy into the blocks without having to pay signing bonuses. Guyana got $18 million as a bonus for the Stabroek block, a figure that was roundly criticized in Guyana.

ExxonMobil spokeswoman Deedra Moe has said the company “followed all applicable laws and regulations in acquiring its government approved license” and would cooperate fully with authorities.

The state agency said it will look at the movement of ExxonMobil’s stock around the time the two small companies became major players in Guyana.

“We will work with international partners with expertise in this area,” Retemeyer said. “We are not investigating Exxon. Our focus is on Canje and Kaieteur blocks and how those blocks were awarded.”