NDC labels Government/MX Oil PLC MOU as reckless

The main opposition National Democratic Congress (NDC) has described the Memorandum of Understanding recently signed by government with London stock exchange listed oil explorer, MX Oil PLC as an act of recklessness on the part of the Keith Mitchell administration at this point in time.

Political Leader of Congress, Senator Nazim Burke addressed the oil agreement during the party’s end of year press conference on December 22, at the NDC headquarters’ in St. George’s.

Sen. Burke accused the ruling New National Party (NNP) regime of signing the oil deal in secret as the information surrounding the agreement was discovered online in a news item posted on “www.naturalgasworld.com”.

“Interestingly, no information is available on the Government of Grenada website to suggest that Grenada has entered into an MOU with MX Oil,” said Sen. Burke as he questioned government’s motive for entering into an agreement with the company at this particular time.

“As far as we are concerned this is an act of recklessness and really is deserving of strong criticism by all Grenadians,” he added.

Sen. Burke alluded to the oil exploration deal that a former Keith Mitchell-led government had signed in the mid-90’s with United States-based company, RSM Corporation of Jack Grynsberg that went sour and “caused the country severe embarrassment”.

According to the NDC Leader, the NNP/RSM conflict “tied up our resources for a long period of time, caused an arbitration proceeding to be brought against Grenada, (in which) millions of dollars had to be spent by Grenada to defending that arbitration (which) led to the charges being brought against (former Energy Minister and current Works Minister) Gregory Bowen and in a related suit the Prime Minister (Dr. Keith Mitchell)”.

Burke also pointed to another dispute which emerged with a Russian outfit, Global Petroleum Group (GPG), surrounding an agreement signed with Bowen prior to the 2008 general elections.

Following the 2013 general election in which NNP was returned to power, Minister Bowen accused the previous Congress administration of Tillman Thomas of preventing GPG from undertaking its research work related to oil and gas exploration in Grenadian waters.

Bowen had informed the nation that GPG was conducting tests and awaiting results to determine if commercial products lie within the island’s territorial waters.

According to Minister Bowen the report regarding GPG’s findings was expected in January 2014. However, to date no information has been forthcoming in this regard.

Sen. Burke told reporters that the NNP government has an obligation to tell the nation what is going on with its oil and gas resources and called on the regime to reveal the status of things with the Russian oil outfit since “the marine resources of the country represents the last real economic frontier.”

“This is of grave concern to us knowing that we have already tied up our hands for so many years by the New National Party’s conduct and the opportunities that we had to explore Grenada’s oil and gas potential has been severely constrained by what the NNP government has done.

“As far as we know MX Oil has an indirect stake, it does not operate an oil field anywhere in the world (but) has an indirect stake in a small producing Aje offshore field in Nigeria (and) has some interest in gas acreage in Mexico.

“The shares of the company appears to be of insignificant worth from what we are picking up and it is perceived by some persons that the company is signing memorandum agreements in other countries as well in order to raise their stock prices.

Meanwhile, approximately one (1) hour after the NDC press conference concluded the Government Information Service (GIS) issued a press release dismissing Congress’ claims that government has signed a secret oil deal with MX.

The release said that “MX Oil and Government, through the MOU, will engage in three months of discussions to ascertain whether conditions can be reached for MX Oil to enter into an exploration arrangement with GOG. If an agreement is reached after the three month period of discussions, then the Government of Grenada will be able to say it has an investor”.

It stated that the area covered by the MOU includes the under-explored prospective Grenada and Tobago Basin acreage adjacent to the Venezuelan/Trinidadian Patao-Poinsettia gas trend.

According to the GIS release, the MOU with MX Oil PLC does not guarantee that the company will be successful in securing a production sharing agreement and that the company will update the market in due course in the event of any significant development.

The GIS release did not indicate exactly when the MOU was signed.

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