Kaieteur and Canje block owners set the stage for secrecy before selling majority shares to Exxon
Transparency is important to Guyana, but the companies that sold the Kaieteur and Canje blocks to ExxonMobil made sure to hamper full disclosure of information before they conducted those transactions.
They decided to register their businesses in countries notorious for being secretive tax havens, requiring no disclosure of vital financial information.
The Kaieteur block was split 50/50 by Ratio Energy and Ratio Guyana (owned by the Israeli company, Ratio Petroleum) on April 28th, 2015, when it was awarded by the Donald Ramotar administration. The ownership remained that way until stakes were sold to ExxonMobil in March, 2017.
Global Witness said that Exxon bought 50 percent of the block from the Ratio group. Because Ratio Energy was sold a month earlier to a company named Cataleya, GW believes the money went to Cataleya, a company run by two miners, Canadian Mike Cawood and the Guyanese, Ryan Pereira.
Some countries, like the United Kingdom, require financial disclosures. So if a company is registered there, it will be required to report the financial details if it makes a purchase.
Both Ratio Energy and Ratio Guyana were registered in Gibraltar, a British overseas territory known as a tax haven, at the time of the sale to ExxonMobil. So they were not required to make disclosures which would tell Guyana, among other things, how much money passed hands in the transaction, and who benefitted. The only information publicly available is that which Ratio Petroleum chose to make public.
It was later announced in April 2018 that Hess acquired a 15 percent stake in the Kaieteur block from ExxonMobil.
As of today, the Kaieteur block is split between four companies: ExxonMobil (35 percent), Ratio Guyana (25 percent), Cataleya (25 percent) and Hess (15 percent).
The Canje Block was awarded to Mid Atlantic on March 4th, 2015. The application for the block was made in March 2013. The company was incorporated in Guyana in April of 2013, which means Mid Atlantic made an application for a block when it was not even formed.
JHI Associates registered in Guyana on May 4, 2015 and farmed into the block just over a week later, on May 15.
JHI’s website was created after it bought into the block, on June 10, 2015 and bears limited information on the company and its purported employees. JHI’s website says it is run by the Canadian, John Cullen. Public documents, however, do not list the company’s shareholders.
According to documents held by the Extractive Industries Transparency Initiative (EITI) Secretariat, JHI was only incorporated on June 17, 2015, in the British Virgin Islands. BVI is a tax haven, like Gibraltar.
The Canje block is the only asset owned by these two companies.
Additionally, JHI and Mid-Atlantic, which participated in Guyana’s EITI reporting process, failed to submit their audited financial statements for review.
JHI also failed to submit information on its beneficial owners. An EITI report lists Dookie as the beneficial owner of Mid-Atlantic.
Less than a year after the Canje award in 2015, a 35 percent stake was sold to ExxonMobil. There is no public information about how much was paid. Total announced it farmed into 35 percent of the block in February, 2018.
Currently, four companies have stakes in the Canje block: ExxonMobil (35 percent), Total (35 percent), JHI Associates (17.5 percent) and Mid Atlantic (12.5 percent).
When it comes to secrecy, one should look no further than the company to which stakes in both these blocks were sold to.
ExxonMobil has had its own involvement in controversial secrecy in Guyana.
Apart from the suspicious awards of the Canje and Kaieteur blocks, the oil company’s kinship with secrecy had placed Guyana in a scandal over the US$18M signing bonus it gave to the Guyana government for the Stabroek block deal.
The government had hid the bonus from the Guyanese public for more than a year after it was awarded. . This could have been avoided if ExxonMobil was required in the US, at the time, to make timely disclosures of payments to governments.
A section of the US Dodd Frank Act had required companies to declare their payments to governments, but oil companies like ExxonMobil fiercely advocated against the implementation of the provision.
ExxonMobil, however, made the disclosure in Europe through its Luxembourg subsidiary, where it is required by an EU directive. But, Global Witness said that the payment was published in Luxembourg 18 months after the Stabroek block agreement was signed.