The Messy Business of Exxon’s Ogle Head Office
Introduction
Today I return to the matter of Esso’s new head office at Ogle, first addressed in Part 104 on 9th. March. The story of this mega building is rife with misrepresentation, secrecy, complicity, abuse of power, possible illegality, and a touch of mystery. It involves Ogle Airport Inc. (OAI); Ogle Airport, a privately owned public facility; Exxon’s Guyana operations; the Ministry of Public Works; and the once all-powerful former Minister of State, Mr. Joseph Harmon. It is also one of how state resources are transferred into private hands, and a mix of business, an oil giant and a strategic, national asset of security importance.
Ogle Airport Inc.
This company traces its beginnings to a 2001 Lease Agreement signed by then Prime Minister Samuel Hinds for the Government of Guyana, and newly incorporated Ogle Airport Inc., for the development of Ogle Aerodrome, previously owned by the Guyana Sugar Corporation. The Agreement was sweetened in 2004 when the company was granted a series of concessions by Mr. Anthony Xavier, Minister of Works including a five year waiver of duties and Consumption Tax on capital goods and spares; waiver of duty on share capital; accelerated depreciation; unrestricted loss relief; and a 50% reduction of the Minimum Rent payable to the Government under the original agreement.
Ogle Airport Inc. was formed one year earlier with five equal shareholders: Trans Guyana Limited, Air Services Limited, Roraima Airways Inc., Kayman Sankar Aviation Ltd. and Hinterland Tours Ltd., each holding 100,000 shares. That equality has changed dramatically. According to the company’s latest annual report, there are 747,200,364 shares in issue with the Correia Group, comprising Trans Guyana Ltd, Correia Mining Ltd. and Caribbean Aviation Maintenance Services Ltd., holding a dominant 60% of the shares while Air Services (16%), Roraima (2%) and some newbies holding the rest. Among the new shareholders are a foreign owned company PFHG PLC (6%) and F. J. Comacho (Guyana) Inc. (9.4%).
Mr. Michael Correia, Executive Chairman of OAI from its inception, is also chairman of the Correia Group which controls all organs of OAI. There is provision for an no participatory role for the Government in the airport, the second largest in the country and for which the Government provides immigration, customs, weather, security, and air traffic control services.
The only obvious relationship between the Company and Correia Mining Services Ltd. is the name Correia, while it is unclear why the directors would have issued 45 million shares to PFHG PLC, a foreign company. Former directors included Messrs Yacoob Ally, Mazahar Ally and Beni Sankar but these too have been replaced over the years.
OAI and Exxon/EEPGL
Fast forward to 2017 to 27th July to be exact, a rather significant day for OAI which on that day, signed a Memorandum of Understanding (MOU) with Esso for a 30-year lease of 435,700 sq. ft. of land. It was no ordinary MOU, but one which was binding and so drawn up, only because such a sub-lease required governmental approval. Unlike a typical non-binding MOU, this one provided for disputes to be referred to arbitration before three arbitrators in accordance with the arbitration rules of the International Chamber of Commerce.
So, on the same day, chairman Correia wrote Mr. David Patterson Minister of Public Infrastructure (MOPI) that Exxon, not Esso, had identified the airport as an ideal location to “establish their main administrative offices”. Emphasising the importance of the matter, Correia confidently sought an early “no objection” to what he presented to the Minister as a fait accompli, a done deal.
I am not aware how Mr. Trevor Benn, CEO of the Lands and Survey Commission became involved, but on August 29, 2017, he wrote to the Permanent Secretary of MOPI on OAI’s application and the renewal of the 2001 Lease, identifying some issues and requesting a meeting. The clear impression was that ESSO and OAI were attempting to exert both direct and indirect pressure through the malleable Ministry of the Presidency, to achieve the early “no objection” response which ESSO and OAI assumed would be a mere formality.
Patterson tries caution
To his credit, Patterson was commendably professional, instructing his PS to seek legal advice on the request. On 27 October 2017, the Permanent Secretary responded to Mr. Benn advising him that the Government lease runs until 2028 and that it would be premature to address an extension “at this time”. Someone, it seemed, did not take no for an answer and so on 8 January 2018, Patterson followed up the PS’s letter with his own, addressed to Harmon’s Political Advisor, highlighting several issues, including a number of provisions that were “manifestly unsuitable for inclusion in the land lease.”
Patterson, in polished and polite language, assured the political adviser that his Ministry would keep the request for a renewal of the Government lease and for a meeting “in its purview”, and promised to address them later.
If Patterson thought that was the end of the matter, he clearly misjudged OAI, Esso and Harmon. On 5 April, Harmon replaced Patterson as the competent Minister in respect of the Airport, prematurely substituting the 2001 Agreement with a new 5 April 2018 Agreement but backdating certain provisions to 1st. January 2018. Poor Guyana will have to live with that for another thirty years at least. Thanks Joe, your legacy lives on.
Like it did with the infamous Bridging Deed of 2016, Exxon was once again, and not for the last time, able to subvert our politicians, our laws, our people and our resources. There are issues arising from Correia’s letter, Harmon’s arrogation of Patterson’s authority, the security issues regarding the use of the ten acres, the role of the current Administration and the financial operations of the Airport. I will conclude with these in my next column.