Grenada’s Quest To Find Oil – No Simple Matter

years after saying that he wanted to resume talks with Grenada on a maritime boundary separating his country from its northern neighbour, Trinidad and Tobago Prime Minister Patrick Manning has sealed the deal.

During the talks with a delegation from St George’s, Manning stressed his desire to return to the negotiating table to deal with the issue of delimitation.

“When he said that, we countered by saying ‘yes we would like to resume’,” recalls Dr. Carlisle Mitchell, a member of the delegation, who later chaired the Grenada’s boundary negotiation team.

“But we don’t want it to be resumed on the old process of the negotiations because negotiations take time and they are costly,” Mitchell remembers saying.

It took just three rounds of negotiations and late last month Prime Minister Tillman Thomas of Grenada and his Trinidadian counterpart were at the Diplomatic Centre in Port of Spain signing the historic treaty that effectively draws a line between the two Caribbean Community (CARICOM) countries.

In recent weeks, Grenada has been abuzz with discussions over the prospects of oil and gas in its exclusive economic zone. “The question of moving forward will be the subject of much discussion over the next couple of days,” Foreign Affairs Minister Peter David announced.

“Various divisions will become involved in discussion over the next couple of days and weeks to determine how we move forward with exploitation and exploration,” David said.

St. George’s is already eyeing an area described by Trinidad and Tobago as Block 21, which under the treaty is almost 40 percent owned by Grenada.

Adjacent to Block 21 is Block 22, a lucrative area leased out to Petroleum Company of Trinidad and Tobago (Petrotrin) and Suncor Energy, which generated millions of dollars by sending gas for processing to Point Fortin in southern Trinidad. “The nice thing about that is that Block 21 is something they can move into very, very fast. Block 21 could be exploited very quickly in two, three or five years,” Mitchell explains.

“They will have to put it on the open market for bidding and we think that Petrotrin and Suncor would move across and get the lease for it as soon as it is available.”

Already, Russian-owned oil company Global Petroleum Grouping, anxious to carry out exploratory work in Grenadian waters, has projected that the state could earn nearly a billion US dollars each year.

“When you put all those commercial and economic features together, according to some estimates, based on market conditions, it might well represent close to 900 million (US) dollars in state revenue per year for Grenada” said Marco Angeli, the Commercial and Operations Director of GPG, in an exclusive interview with the Caribbean Media Corporation (CMC). But maritime lawyer and member of the Grenada negotiating team Senator Arley Gill warns not to count chickens before they are hatched

“We would not be able to count dollars until we start to work in the area. You have to start drilling to know if there is a well and the depth of the well to know what is in there,” Senator Gill explains.

“We are a little way off. I hear all sorts of figures being bandied about and so on. We need to be careful we don’t count our chicken before they hatch.”

The treaty also gives Grenada legal ownership of a share of the South American continental shelf for the first time as a result of changes in international law.

Initially, the 1958 United Nations Convention of the Continental shelf made Grenada’s claim for a share difficult, since Trinidad and Tobago did not have to relinquish any that fell in its jurisdiction.

However, under the 1984 law of the Sea Convention, that was eventually ratified a decade later, coastal states were entitled to an exclusive economic zone which could be 200 nautical miles from their coastlines.

Under article 74 of this new convention, archipelagic states like Grenada and Trinidad and Tobago were required to draft a boundary based on the principle of equidistance, a provisional economic zone, before negotiating a boundary on equitable principles.

The provisional line had put Grenada halfway into the continental shelf. However under the treaty, the country’s legal share has declined to about 38 percent.

“It was real rollercoaster times because at one time we thought we had won once Trinidad agreed on the equidistance point because Trinidad’s opening position was to get us of the point. Four miles north … we are back into deep water … no shelf area,” Mitchell explains.

“We told Trinidad if they are serious about economic unity with Grenada and the OECS (Organization of Eastern Caribbean States), we had to start with equidistance because if they move us four miles north we will be losing that amount of space on the Venezuela side because we are setting the boundary for Venezuela.”

There are reports that Americans have been conducting seismic surveys in the waters around Grenada since 1905. But Grenada’s quest to find oil and gas may have begun under the Eric Gairy regime, which leased waters between the mainland and the sister isle of Carriacou to at least two American companies whose time has since expired.

However, controversy has hounded Grenada’s renewed efforts to debut into the oil and gas industry.

The main opposition New National Party had launched a series of public meetings to voice objection to the signing on the grounds that the 21-month-old National Democratic Congress administration has signed-away Grenada’s birthright without knowing what lies beneath the sea. Opposition Leader Dr. Keith Mitchell wrote to both Thomas and Manning calling for a postponement of the signing. He also wrote to the leader of the opposition bloc in Port of Spain, Kamla Persad Bissessar, who immediately released a statement calling for the agreement to be shelved until after the Trinidad and Tobago general election on May 24.

But with the treaty now fully ratified, the biggest obstacle to Grenada’s search for oil and gas could come from the law courts. The Russian company GPG and the American company RSM are both claiming rights to search for hydrocarbons in Grenadian waters.

GPG’s website says it was given 11 blocks of water under a deal with the previous administration that was led by Keith Mitchell, while RSM has sued Grenada for half a million US dollars after the Mitchell regime reneged on a contract.

“It is a big problem because what happened unfortunately is that the last administration went contrary to legal advice not to enter into a relationship with Global,” says former attorney general Jimmy Bristol.

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