• Melissa D. Goolsarran Ramnauth, Esq.

The History of Guyana's Oil Industry

Melissa D. Goolsarran Ramnauth, Esq. | Trademark Attorney | Fort Lauderdale



Guyana is projected to become the highest producer of oil in the world by 2035, according to a research firm.


The statistics are based on a per capita ranking and are consistent with Exxon’s goals.


This is both important and concerning because Guyana was exploited by Exxon in its 2016 oil deal. On June 27, 2016, Guyana and Exxon signed the Stabroek Block Production Sharing Agreement, for production of the Stabroek oil block. The deal was to Guyana’s extreme disadvantage because it precluded Guyana from receiving $55 billion dollars. This estimate, by OpenOil, is based on similar contracts within the industry. Guyana is only receiving 52% of revenue compared to 73% that other similarly situated countries are receiving in their oil deals.


Exxon claims that the deal was based on Guyana’s status as a new frontier rather than a mature area with a lower risk, and the border dispute with Venezuela. Their stance has been criticized since Exxon announced a massive find only 3 days after signing. If the evidence was revealed sooner, Guyana would have had a stronger bargaining and negotiating position.


Moreover, the fossil fuels obtained from the oil deals are contributing to climate change. Guyana has experienced first hand effects of climate change, and most recently with intense flooding in villages like Mahaicony Creek.


Guyana and Guyanese are therefore encouraged to increase education and legal protections to avoid repeated exploitation akin to the Stabroek PSA and colonization.


History of Guyana

Guyana is located on the northern tip of South America, between Venezuela and Suriname, and north of Brazil. The Caribs, Akawois, and Arawaks were the most populous and most powerful natives, known as Amerindians. The Dutch were the first Europeans to colonize the area. After that, there were shifts in the reign between the British and the French. Britain ultimately prevailed and ruled “British Guiana” (as Guyana was known during that time) for over a century.

The British colonized Guyana in order to capitalize off of its sugar. To do this, they first enslaved Africans to labor in the fields. The British ended slavery in the 19th century and replaced it with a system of indentured servitude. The British began importing Chinese labourers for a short period and eventually began importing Indians. The Indians were told that they would work for a certain period of time and then return home to India. After importing hundreds of thousands of indentured workers to Guyana, the British ended this system because it was no longer profitable. Many Indians remained and formed the majority of Guyana’s population.


Guyana’s Politics

Britain allowed the Guyanese to hold elections in the mid-twentieth century; the elections, however, were not free and fully democratic. The crown colony system kept legislative power away from elected representatives. Britain also undermined the will of the Guyanese people by gerrymandering districts, suppressing opposition speech, promoting racial divisions, and underfunding education.

Dr. Cheddi Jagan eventually emerged as a leader of the laborers. Jagan’s People’s Progressive Party (PPP) won major victories in the 1953 election but the sitting governor suspended the constitution and replaced the winners with his own supporters. Jagan’s party reemerged in 1957 but faced funding barriers from the crown. The British attempted to undermine Jagan by pitting the Africans (then led by Forbes Burnham) against the Indians. The United States also interfered in Guyana’s politics and elections as a strategy to inhibit any nation apparently opposed to capitalism. The fraudulent elections (based on external and internal schemes) continued even after Guyana was granted independence in 1966.

Most recently, Guyana’s government was in an upheaval relating to its December 2018 elections. Former President Granger and his APNU-AFC [A Partnership for National Unity (APNU) and the Alliance for Change (AFC)] party suffered a vote of no confidence but failed to step down. General elections were finally held over a year later on March 2, 2020. This election was condemned from both inside Guyana and from outside states, and it remained uncalled officially for months. The election was plagued with fraud starting with alleged attempts by Region Four Returning Officer Clairmont Mingo to exclude votes from the most populous Region Four area, and inflate votes in favor of the APNU-AFC. President Granger initially claimed victory for the March 2nd election.


The votes were then recounted. The preliminary tabulation showed that the opposition leader, Dr. Mohamed Irfaan Ali of the PPP, garnered 15,416 more votes to win 33 seats in the 65 seat legislature. The release of the official recount report was delayed, and there was an attempt to have the judiciary prevent the release of this report. On June 22, 2020, the Guyana Court of Appeal, however, ruled that it lacked jurisdiction to enjoin the report from being published. It also held that the phrase “more votes cast” in Guyana’s Constitution meant “more valid votes cast” to determine the winner of an election.


On June 23, 2020, Chief Election Officer Keith Lowenfield submitted another recount report to the Guyana Elections Commission (GECOM) but discarded nearly 115,844 votes. The recount report claimed that the APNU-AFC received 171,825 votes and the PPP received 166,343 votes, contrary to the first report showing that the PPP received more votes than the APNU-AFC. CEO Lowenfield discarded the votes on the basis that he only counted votes which could be verified as “validly” casted.


The PPP then moved the Caribbean Court of Justice (CCJ) to strike the Court of Appeal’s June 22nd order. On July 1, 2020, the CCJ announced that it would issue a ruling as to whether it had jurisdiction to hear the appeal regarding the meaning of “votes cast.” On July 8th, the CCJ proceeded to rule that (1) the Guyana Court of Appeal did not have jurisdiction, (2) the Constitution's clear language did not need interpretation of the phrase “votes cast” to mean “valid votes cast”, and (3) held that the June 23, 2020 Report was invalid for excluding votes deemed not “valid.” The matter returned to GECOM to declare the winner of the recount.


The CEO then sought clarification from GECOM regarding which results to utilize. The CCJ ruled that he must use votes and information furnished by “Returning Officers” of the election. However, the CEO pointed out that the recount was not conducted by Returning Officers. On July 11, 2020, the CEO presented a report that showed a win for the APNU-AFC despite the GECOM chair’s order to utilize the recount tabulation showing that the PPP obtained the most votes. The GECOM Chair then ordered the CEO to submit a (fourth) report utilizing the recount votes.


On July 14, 2020, the day the fourth report was due, key officials left a GECOM meeting because a third court case was filed to prevent GECOM from declaring the election. An APNU-AFC supporter sought to have the election results based on the initial 10 declarations showing that the APNU-AFC received the most votes. The APNU-AFC supporter also contended that the order requiring the National Recount was unconstitutional, and consequently the recount data was improper. The Chief Justice Roxane George-Wiltshire dismissed the suit. On July 22, 2020, the voter’s counsel filed a formal petition with the Court of Appeal to challenge this ruling. One point of appeal was that GECOM officials altered ballots during the recount. On July 30th, the Court of Appeal denied the petition.


That same week, the OAS Secretary General commented that the election and recount were transparent but the issues stemmed from Region Four Returning Officer Clairmont Mingo, and his alleged attempts to alter the voting results of that district. He then said that the multiple court actions were continued attempts to suppress democracy. The European Union also echoed the same sentiments in an effort to finalize the election.


In late July, the APNU-AFC released a press statement again calling for only valid votes to be tabulated. They claimed that GECOM should not consider what they assert are fraudulent votes. Two private criminal charges were also filed against the Chairperson of GECOM, Justice (Ret’d) Claudette Singh, for alleged malfeasance in public office.


On August 2, 2020, five months after the election, Dr. Mohamed Irfaan Ali was sworn in as President after CEO Lowenfield submitted a report utilizing the recount tabulation.


The recent election’s scandal was likely related to the infamous ExxonMobile oil deal.


Oil in Guyana

There are oil reservoirs all over the world but several of the largest known reservoirs are in the Middle East and the United States. ExxonMobile, America’s largest oil company, initially discovered crude oil off of Guyana’s coast in 2015. Since then, there were 16 extraordinary oil finds. Five of the six largest oil discoveries in 2019 were in Guyana.

Exxon and Guyana’s oil deal raises concerns as to whether the contract is disproportionately in favor of Exxon to the extreme disadvantage of Guyana and its people. Of note, the parties entered into an oil contract and three days later Exxon announced a major discovery. Some claim that Exxon purposely withheld evidence of the find to minimize Guyana’s negotiating power. As a result, Guyana would receive a below-average share in oil production. The deal was also made hastily during heightened tensions with Venezuela over the Venezuela-Guyana border, with hopes that Exxon’s presence would deter Venezuela’s attempts to expand their borders.


As for the specifics of the Stabroek deal, Exxon is paying $1 million per year to lease the oil block, and $600,000 per year to promote employment, environmental, and social development in Guyana. Exxon also paid an $18 million signing bonus.


Last year, Exxon’s Country Manager, Alistair Routledge, stated: “Guyana is one of the better opportunities for us in the ExxonMobil portfolio (but) it is not the only one. And indeed, if we don’t get the agreement as we are looking for on Payara (the company’s third Field Development Plan), the investment money will go elsewhere in ExxonMobil’s portfolio.” Such comments were likely made to intimidate Guyana and prevent it from renegotiating the Stabroek PSA. Hopefully, Guyana will forge ahead and negotiate an equitable contract for the benefit of the Guyanese citizens.


Altogether, Guyana is encouraged to renegotiate the Stabroek PSA with Exxon in order to receive fair terms that were precluded at the time of signing. Guyana should not succumb to pressure from the oil magnate as it could receive terms in accord with industry standards or explore its other renewable energy projects instead. Lastly, the Guyanese are encouraged to promote education and legal protections to minimize the risk of manipulation.



 

Weekly articles on Caribbean empowerment through history education and legal protections.


Melissa D. Goolsarran Ramnauth, Esq. is a trial-winning trademark and business attorney. She primarily helps new and small businesses with trademarks and contracts. She writes articles on the importance of trademarks, trademark law updates, and also West Indian history (with an emphasis on India, Trinidad, Guyana, and the United States).


Melissa D. Goolsarran Ramnauth, Esq. is of Trinidadian and Guyanese descent. She graduated magna cum laude from the University of Miami with a Bachelor of Arts degree in Political Science, a minor degree in History that focused on the slavery and indentured servitude eras, a minor degree in Criminology, and a Juris Doctor degree.

MDGR Law, P.A.

PO Box 101794 Fort Lauderdale, FL 33310-1794

(754) 800-4481

melissa@mdgrlaw.com

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