Opposition says Govt ignoring Constitution, Parliament in using oil money to fund gas-to-shore project

The Opposition, A Partnership of National Unity and Alliance For Change (APNU+AFC), says the Government’s intention to fund the acquisition of a stake in the Wales gas-to-shore pipeline (and eventually full ownership of the pipeline) from the Production Sharing Agreement (PSA) with Esso, bypasses the Constitution of Guyana and Parliament.

According to the Opposition, such funding and procurement arrangement raises serious legal and constitutional red flags—a matter on which we here wish to alert the Guyanese people.

The Coalition says “if the pipeline is intended to be government-owned national infrastructure, it must be financed through the national budgetary process. This process allows the existing oversight bodies to carry out their functions—first and foremost, the National Assembly, but also encompassing the Public Procurement Commission, Auditor General’s Office and Public Accounts Committee.”

Funding such national infrastructure directly from the cost oil arrangement in the PSA sidelines these institutions, which are constitutionally mandated to ensure national discussion, public accountability, and transparency, warns the APNU+AFC

Going further, the opposition says it is vital to draw a distinction between the offshore FPSOs, which ExxonMobil and its partners own, and a Natural Gas Pipeline that the Government of Guyana would own. “If Exxon develops a pipeline that it owns and then costs recovers that pipeline, it is within its rights under the PSA. This is exactly the same process we see currently with the FPSOs.”

On the other hand, according to the Opposition, if the Government of Guyana seeks to acquire that pipeline from Exxon, whether in whole or in part, it must approach Parliament for funding.

Direct cost oil funding opens up the possibility that under the PSA, Exxon could be empowered to construct a wide variety of government-owned and operated public infrastructure projects, from roads to wharfs, completely bypassing Guyana’s existing laws and constitution, the opposition warns

And given these grave concerns, some key points that need to be urgently addressed, the Opposition says are:

1. The Government must immediately make public the agreement it has made with ExxonMobil for this pipeline, in whatever form it exists.
2. The Government must immediately make public the agreement it has made with ExxonMobil for the supply of natural gas, in particular as it relates to the price at which this gas will be supplied.
3. The government must state what law allows it to bypass the Natural Resources Fund Act and Consolidated Fund in this way.
4. The government must state what procurement procedures ExxonMobil will use in building this pipeline.
5. The government must state what law empowers Exxon to procure in a way that is not monitored by the public procurement commission, which is also a constitutional body.
6. The government must state the interest rate that Guyana will be charged by ExxonMobil for funds used to construct this pipeline.
7. The government must state whether this project would create a contingent liability on the Government of Guyana, if Exxon is unable to repay its creditors.
8. The government must state the source of ExxonMobil’s financing and what the terms and conditions of that financing are.
9. The government must state the final cost of the pipeline and what provisions exist to finance cost overruns, should they occur.

Member of Parliament, Mrs. Volda Lawrence, laid the above questions in the National Assembly. Further, the Opposition intends to table a motion for the National Assembly to call on the government to release all contracts and agreements on the project and for the Parliamentary Sectoral Committees on Natural Resources and Economic Services to jointly review them in the public’s interest.

“If this move by the PPP is not nipped in the bud, it opens the door to hundreds of billions of dollars being continuously borrowed and spent on infrastructure projects unlawfully and unconstitutionally. Moreover, Guyana would be saddled with costly oil bills that severely restrict the size of the NRF and the nation’s ability to spend on health, education, and a wide range of public services.”

Warning if the current situation prevails it would be exactly what Hugo Chavez did in Venezuela, asking PDVSA, the state-owned oil company, to fund his “missiones” programmes. “These programmes were awash with corruption, drained the nation’s resources and helped ensure Venezuela’s Sovereign Wealth Fund only had US$3 million in its accounts as of 2021. If national institutions are bypassed, it doesn’t matter how much oil a nation has, it can all turn to tragedy in a heartbeat.”

Informing PDVSA is notorious for not publishing financial reports, the Opposition says as it stands Guyanese are yet to see the audit of Exxon’s US$7 billion costs-recovery bill and the audit US$400 million pre-contract costs. All right-thinking Guyanese must make it clear to the government that a single dollar must not be spent, much less billions upon billions, without the approval and oversight of Parliament, the APNU+AFC says.

The Opposition advises “Guyanese need to recognise that this project is in the hands of Vice President Bharrat Jagdeo, who is accused of bribery and corruption and has not been involved in one successful project in his disastrous political career and therefore we are likely to have another failed project with wide-scale corruption.”