KN Bombshell: Jagdeo secretly agreed with Coalition Govt to waive taxes for Exxon

Although the People’s Progressive Party (PPP), particularly, Bharrat Jagdeo, as Leader of the Opposition, berated the A Partnership for National Unity and Alliance for Change (APNU+AFC) for “signing away the nation’s patrimony” as he puts it. But he actually supported the waiver of taxes to the oil giant. The PPP campaigned on a promise to renegotiate the contract. When the party returned to government in August 2020 its call was supported by the Opposition, APNU+AFC, and civil society.

Raphael Trotman, the Natural Resources Minister in the APNU+AFC government, who signed the Exxon contract on Guyana’s behalf, supported the re-negotiation call. Jagdeo now seeks to avoid honouring the PPP’s campaign promise, inspite mounting calls to renegotiate the contract. Information reveals Jagdeo was no innocent bystander and played a crucial role in the contract awarded to Exxon.

Read below the exposé in Kaieteur News today that unearths his role, duplicity and divisive political motivation:

Jagdeo as Opposition Leader secretly agreed with Coalition Govt to waive taxes to ExxonM

—-Raphael Trotman reveals  

Kaieteur News- The People’s Progressive Party (PPP) has always stoned the APNU/AFC Coalition for signing onto the lopsided oil contract, often using this to its political advantage in comparing its own management of the sector.

Although the blame is usually casts on the previous government for binding Guyana to the terms of the 2016 Production Sharing Agreement (PSA), the PPP also played a role in “signing away the nation’s patrimony” as Vice President, Bharrat Jagdeo puts it.

In fact, Attorney-at-law and Chartered Accountant, Christopher Ram, in his most recent column ‘Every Man, Woman and Child Must Become Oil Minded’ made a shocking revelation about the VP’s part in the lopsided deal with American oil supermajor, ExxonMobil.  Ram in describing the actions of both the VP and President Irfaan Ali as betrayal, cited an excerpt of former Minister of Natural Resources, Raphael Trotman’s book, From Destiny to Prosperity.

The lawyer said, “we recall that in his book From Destiny to Prosperity,  Raphael Trotman, then oil Minister, revealed that Jagdeo, as Leader of the Opposition, had secretly agreed with the APNU + AFC Government not to oppose the Legislative Order granting the ultra-generous tax measures in the 2016 Agreement.”

In Chapter Five of his book, Trotman explained that weeks after signing the deal, it was agreed between the Ministry of Finance and Exxon, that the Minister of Finance would table a Motion for a Resolution under Section 51 of the Petroleum Act, to be adopted by the National Assembly.

“In essence, this provision, permits the Minister of Finance to exempt a petroleum company, engaged in exploration and production, to be exempt from the payment of taxes, as per the provisions of its agreement with the Government of Guyana,” Trotman detailed.

He was keen to note that this provision had been utilised by previous PPP administrations for petroleum companies, as similar Orders can be found under the hands of Sasenarine Kowlessar and Dr. Ashni K. Singh as Ministers of Finance.

The former minister noted that while there is great objection to this concession being given to Exxon, it is neither unprecedented to Guyana, or in other jurisdictions in the developing world where nascent petroleum industries were encouraged and incentivised.  In the case of Exxon and its partners, the Order was introduced on August 8, 2016, and gained the unanimous approval of the House, he said.

“Interestingly, I had been previously informed that the Leader of the Opposition had been “briefed” and would offer no objection, and further, that I should not elaborate too much on the specifics of the June 27 agreement (Exxon deal); except to note that it had been signed and to list some of the provisions. This advice I followed,” Trotman revealed in his book.

The former Natural Resources Minister under the David Granger presidency, said his presentation to the National Assembly on the evening of August 8, 2016 is a matter of public record, along with the proceedings of the day, as recorded in the Hansard.

Notably, in May 2019, the Finance Minister, Winston Jordan, at the time extended these same concessions to Repsol, Tullow Guyana B.V. and Total E&P Guyana B.V., which hold concessions in the Kanuku and Kaieteur offshore blocks respectively.

VP Jagdeo, who now manages the petroleum sector, has on multiple occasions distanced the PPP from the 2016 deal, arguing that the Coalition is responsible for the contract.

Although the PPP government accepts that the country is not gaining a fair share of revenue as a result of the Petroleum Agreement, it has refused to engage the Contractor for a renegotiation of the contract.

Instead, it often boasts of the new PSA which demands 10% taxes, 10% royalty and a 65% cap on cost recovery.  These terms however, do not apply to the Stabroek Block where Exxon pays no taxes, hands over 2% royalty and is allowed to deduct up to 75% of the country’s oil for costs.

Back in 2019, Jagdeo, while being interviewed on 94.1 FM said, “They sold us out to the foreigners – the oil companies. Every time there is a find there, our people should be sad because nothing comes our way.  We are going to renegotiate those contracts because that’s not what we had in mind.  When we were in the early days, we were coaxing the people (ExxonMobil and partners) to go along. They (APNU+AFC) came into office (and met) 3 billion barrels of proven reserves and then gave up zero royalty, no taxes, no ring-fencing, no local content for these people to spend any money here.”

He continued: “Paying our people GY$72,000 a month when the foreigner is getting US$10,000. Bringing water from California to drink here. We are paying for all that. Landscaping – they wanna contract it to a company coming from abroad and the Trinidadians and others are just walking in not only in the oil sector but they are getting all the prime lands too… So that is why I got back into politics. I’m not prepared to see this happen; I have no desire to be President again.”

Although Jagdeo’s comments at the time were focused on the lopsided nature of the Exxon contract, he now claims that the statements were meant for the other oil blocks.

The original article can be seen here