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Gov’t minister supports signing bonus, advance borrowing

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While not confirming whether or not a signature bonus was paid to the Guyana government when a new Production Sharing Agreement (PSA) was signed in 2016 with US oil major ExxonMobil, Minister of Public Security, Khemraj Ramjattan, says he would be in full support of a sizeable signing bonus from the company in pursuit of oil production.

The Chairman and co-founder of Guyana’s third largest political party; Alliance For Change (AFC), was asked during an exclusive interview with OilNOW to weigh-in on the views shared by Presidential Petroleum Advisor, Dr. Jan Mangal, and speculations of a US$20M signature bonus purportedly already paid by ExxonMobil to the Guyana Government.

Dr. Mangal had recently suggested Guyana engage in upfront borrowing, in order to repair its ailing infrastructure.

Mr. Ramjattan told OilNOW, “I am in agreement (with Dr Mangal)… it’s important we do that as a matter of urgency in my opinion.”

Mr. Ramjattan, who also holds the portfolio of Guyana’s Second Vice President, insisted, “I am off the view we should take some advances to set up better infrastructure in Guyana.”

On the matter of a signing bonus, he reminded, “…other countries which have found oil have asked for big signature bonuses or advances.”

The Nigerian PSC, for example, contains signature and production bonuses. This bonus is a fixed fee which is paid by the oil company to the Nigerian government at differing stages of the project. Signature bonuses are paid immediately after the completion of negotiations and signing of the PSC while production bonuses are paid when the production from a specific contract area reaches a particular threshold.

The Second Vice President told OilNOW he is cognizant of the fact, “we have to do some major projects,” and suggested if private partners and companies are unable to finance the projects with their own funds, “we will have to do it.”

He pointed to the need for a new bridge across the Demerara River that could possibly extend into the canfields on the Eastern Bank thereby opening up a way for an alternative East Bank Demerara (EBD) Highway.

He was at the time lamenting the congestion on the existing EBD roadway and noted, “You can’t tell a young professional he can’t go and buy a car,” signalling that the congestion will only be amplified.

These projects, Mr. Ramjattan said, “call for big money.” Monies that could be had “only from advances.”

Advisor to the President on Petroleum, Dr. Jan Mangal had in recent days advocated the country obtaining loans in order to fix its crumbling infrastructure and to support existing industries.

Dr. Mangal told reporters in a recent interview the extent to which the revenues are utilized to support existing industries, will also determine the inherent benefit to the Guyanese people.

“The focus should be on taking the revenues from oil and spending and investing it in existing industries…It is about spending it on all the things that Guyanese have been complaining about for years, example; roads, bridges schools, hospitals…,” he said.

Mr. Ramjattan’s comments also come amid speculation that a US$20M ‘signature bonus,’ was already paid over to the Guyana Government. The notion was first raised by Chartered Accountant and Attorney-at-Law, Christopher Ram.

Opposition Leader Bharrat Jagdeo , on Thursday last vowed that his Peoples Progressive Party (PPP) will probe deeper into the matter, since he was in a position to “reasonably confirm” the payment of US$20M signature bonus by ExxonMobil.

Finance Minister Winston Jordan, when recently asked if a signing bonus was paid said he would seek to find out, while ExxonMobil has declined to comment on the matter.

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