Fri | Jul 19, 2019

Norris McDonald | Deutsche Bank, Caribbean ‘Hunger Games’ and the GOJ trust deficit!

Published:Friday | May 17, 2019 | 12:24 AM
Tullow Oil plan for the Caribbean
Norris McDonald
Petroleum Geochemist Chris Matchette-Downes is one of the authors of a study, ’The Realization of the Hydrocarbon Potential of Jamaica’. He set up, and promoted, Jamaica’s first and second gas rounds on behalf of the Petroleum Corporation of Jamaica. He visited a live oil seep, on fire, in Northern Jamaica. This oil-fire, reportedly “has been on fire for over a hundred years.” This study was Commissioned by the Petroleum Corporation of Jamaica.
Tullow Oil interest in the Caribbean
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“This exciting discovery of live oil onshore Jamaica, based on our – (CGG) – study with PCJ, builds a strong case for the island – (Jamaica) – as an attractive region for future oil exploration within the Caribbean.”

So said Sophie Zuquiyah, senior executive vice president, Geology, Geophysics & Reservoir, of CGG Geo Consulting. Zurquiyah was reporting on a joint study done with the Petroleum Corporation of Jamaica (PCJ).

This ‘Robertson Study’ (Red Book) examined Jamaica’s onshore and offshore oil potentials. “Oil and gas have been seen in ten of the eleven wells drilled to date,” a February 20, 2018 new release in Paris, France from CGG said.

WHY THE PANIC?

The PCJ has more explanation to do. In fact, the PCJ commissioned “a multi-client study” with CGG GeoConsulting in 2018 entitled, ‘The Geological Evaluation of Jamaica’, to be submitted to investors.

In my article in the Sunday Gleaner on May 12, 2019, titled ‘Tullow and Jamaica: Why The Silence Over The Big Oil and Gas Find?’ , there were a number of issues raised regarding oil and gas exploration in Jamaica.

Following the publishing of the article, the PCJ called an emergency press conference on Monday, May 13, 2019. Then it was cancelled for reasons unknown.

The PCJ then issued a carefully worded statement from Mr. Brian Richardson, the acting general manager, saying that: no oil or gas has been found; the signs are positive, but the seismic data is being reviewed by Tullow and United Oil and Gas.

The PCJ has not answered all the questions raised or that in the public’s mind, especially in light of the wave of corruption allegations surrounding Petrojam, the Ministry of Education, among others.

CARIBBEAN HUNGER GAMES

The issues I raised in the May 12, 2019, Sunday Gleaner article said oil and gas was discovered. It never said when production was expected to start onshore or offshore. It never said whether it was commercially viable.

Despite PCJ’s denial, however, a February 21, 2019 report by offshoreenergytoday.com reveals that Jamaica is in focus as Tullow competes “for capital for drilling in 2020”.

This would mean, in my opinion, that there is a level of commercial interest in the Walton-Morant stake, with Tullow Jamaica owning 80 per cent and United Oil and Gas owning the other 20 per cent.

Tullow Oil Plc also told their shareholders, at their April 25, 2019 annual general meeting, that they have a ‘2019 GUYANA FOCUS’, but a chart included in 2018 shareholders report prominently features Jamaica on a Caribbean map.

The PCJ talks of the disappointment of nearby territories which drilled and came up empty-handed but they did not mention that ExxonMobil has partnered with Hess Corporation and STATOIL, to develop a 500 million barrels discovery in Guyana’s offshore waters. ExxonMobil is expected to drill 40 wells in Guyana’s waters.

Tullow is also drilling in Guyanese waters. In the meantime, for 2019, they are focusing on West Africa, expecting to produce between 90-98,000 barrels per day.

The oil slicks are clear: Tullow and United Oil and Gas have now wrapped up their exploratory work, since the seismic surveys show and have confirmed a Jamaican oil and gas offshore find of at least 229 million barrels. It is rated as “low risk” and capital is now being raised by Tullow Jamaica.

DEUTSCHE BANK

Deutsche Bank and BNP Paribas, in the meantime, have financial links to both Tullow Oil and the Jamaican Government.

There may be nothing wrong with that, but is this really true?

Deutsche Bank and BNP Paribas helped to float a US$1 billion loan for Jamaica, at an amortising rate of eight per cent. US$400 million of this loan is due in 2019.

Tullow was bailed out in November 2012 by BNP Paribas and Deutsche Bank, which helped to cover for a US$3.5 billion credit rescue for Tullow Oil Plc.

Deutsche Bank also covers American Depositary Receipts (ADR) – stocks buy, sales or placement – for Tullow Oil Plc with the US Securities and Exchange commission.

Even more, Deutsche Bank touts Tullow stocks on the American stock market, rating them as a buy on Wall Street.

If I am right, there appears to be multiple of conflicts of interest with:

n Deutsche Bank being responsible for American Depository Receipts for Tullow.

n Their stock analyst touting the stock like a racehorse bookie.

n Holding a loan portfolio for Tullow Oil.

n Being responsible for a bond of US$1 billion loan placement for Jamaica which, coincidentally, has a financial relationship with Tullow Jamaica.

Deutsche Bank may well be ideal to do business with, but right now they are being probed by the State of New York regarding possible illegal financial transaction by President Donald Trump.

In 2018, German police officers and tax investigators raided the Deutsche Bank headquarters in Frankfurt, Germany in connection to money-laundering allegations raised in the 2016 ‘Panama Papers’.

Deutsche Bank was fined billions of dollars for money laundering. Now, behind oil and gas exploration in Jamaica, we find the haunting shadows of Deutsche Bank with extremely strong financial ties to Tullow Oil Plc.

TRUST DEFICIT

Things like these create a trust deficit.

When we have incompetent, self-serving national managers, as proven with the many Petrojam scandals and more, we have a right to ask probative questions.

n Is Deutsche Bank, either directly or indirectly, an investor in Jamaica’s oil and gas exploration?

n Are the connections between Deutsche Bank, Tullow Oil and Jamaica merely coincidental?

n Are there any conflicts of interest between Jamaica, Tullow Oil and Deutsche Bank?

n What about the unanswered questions on the terms of the production sharing agreement signed regarding oil exploration.

The Jamaican people are the stakeholders who vested the Government with the legal power to do business on their behalf.

These stakeholders are the urban and rural poor people, middle class, small business people and national industrialists who are working for the good of the nation.

A trust deficit exists when we have a dark veil of secrecy, dishonesty, misleading statements, half-truths, incompetency and corruption that overshadow the government.

It is my opinion that this Government has a serious trust deficit problem that must be removed.

That is just the Bitta Truth!

Norris McDonald is an economic journalist, social researcher and political analyst. Email feedback to columns@gleanerjm.com and miaminorris@yahoo.com