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Why has NGC failed to disclose gas contracts?

Published: 
Thursday, June 22, 2017
BPTT Regional President Norman Christie,left, speaks with Energy Minister Franklin Khan, BP's Upstream Chief Executive Bernard Looney, National Gas Company Chairman Gerry Brooks, and BP Chief Operating Officer, Strategy and Regions Andy Hopwood following a press conference hosted by the bpTT at the Trinidad Hilton, St. Ann's earlier this month

Earlier this month, the Government of Guyana reiterated that a “legal consideration” was preventing it from providing the full disclosure of the contract it signed with the US oil giant, ExxonMobil.

Minister of State Joseph Harmon, speaking at the weekly Cabinet news conference, said that the David Granger government will not at this juncture make full disclosure on the contract.

Harmon said the Petroleum Act provides for a “confidentiality clause” in contracts like Exxon’s “which says that during the course of the negotiations that certain things have to be kept in a confidential way.”

That act, according to a CMC report, stipulates that “no information…by a licensee shall be disclosed to any person who is not a minister, a public office or an employee of the Guyana Geology and Mines Commission except with the consent of the licensee.”

Earlier, Prime Minister Moses Nagamootoo, in defending the accord, said the agreement “will be made available in due course.”

Responding to a call by the Transparency Institute Guyana Incorporated’s (TIGI) for full disclosure on the accord, Nagamootoo said that Guyana’s unresolved border row with neighbouring Venezuela was one of the government’s reasons against full disclosure.

“We have a situation right now with Venezuela and we have entered into the last six months of a very delicate process involving the United Nations (UN). We have to, in this final six months, decide if there is no resolution that the matter should go to International Court of Justice,” Nagamootoo said.

So Guyana has taken a position, citing its long-running territorial dispute with Venezuela, not to disclose the salient details of its engagement with ExxonMobil.

In the last month or so, the wholly state-owned National Gas Company of T&T has signed two natural gas supply contracts: one with bpTT and the other with EOG Resources Trinidad Ltd.

The first contract, with bpTT, renews a 20-year supply contract that was due to expire next year, while the contract with EOG Resources was for a continued supply of natural gas to the domestic market from 2019.

In signing the EOG Resources contract, NGC president Mark Loquan said that it “paves the way for increased collaboration for both companies to stimulate increased gas production to the domestic market.”

In signing the bpTT contract—which NGC described as a “milestone” in a statement—Loquan said that it represented a different operational and commercial relationship for the two entities.

“The days of long duration contracts and low pricing when compared to past contracts are over,” he said, adding that these components now depended on exploration and further development.

In neither case has NGC disclosed the specific details of the contract in terms of volume of the natural gas that NGC has contracted to purchase, the amount of money it has agreed to pay bpTT and EOG Resources for the natural gas or the length of the contracts.

All that Mr Loquan did disclose was that “the days of long duration contracts and low pricing when compared to past contracts are over.”

One assumes that all of the significant details of these agreements are well known within the local natural gas community.

The question is: why have NGC, bpTT and EOG Resources failed to disclose even the basic elements of these contracts, which will have a profound impact on the liquefaction facilities at Point Fortin and the petrochemical and process plants at Point Lisas?

I think that the public of T&T deserves to know what NGC has agreed to with these companies on behalf of the population of T&T, specifically the country’s taxpayers.

Is this veil of secrecy that has been pulled over these very important contracts appropriate in 2017, when T&T’s natural gas industries have suffered nearly five years of gas curtailments?

Would it not be appropriate for everyone if NGC were to provide the public with some idea of how these contracts will impact the gas-curtailment situations?