• 04 Dec, 2022

Stability of Oil Companies’ profits should not mean instability of incomes for the people of Guyana

Stability of Oil Companies’ profits should not mean instability of incomes for the people of Guyana

Stability of Oil Companies’ profits should not mean instability of incomes for the people of Guyana

In a recent article, the Exxon head was quoted as saying, “Investments with 20/30-year horizons require stable contracts – ExxonMobil Guyana President,” (ON, August 29, 2022). “We invest with a 20–30-year time horizon. It’s incredibly difficult to make any future decisions if you feel that the terms are constantly going to be changed,” Routledge said in the 26th episode of the Access ExxonMobil show. “So, it is fundamental to our industry, in particular, that has these long investment timelines, that we have stability in our contracts.” How about stability in insurance coverage, ring fencing, auditing of oil companies’ expense accounts, monitoring of production, environmental protection and end to flaring, elimination of “produced” water into the ocean, payment of all taxes and duties, stability in a depletion policy, etc. On all counts, Guyana is at a disadvantage because of poor governance of oil under both the PNC and now PPP. My response is that if we are going to have this contract in place for 20-30 years, we should not be getting robbed for 20-30 years. We need an income that can guarantee stability in our country too. One man’s stability of profits should not be a whole country’s instability. The majority of our people are poor and many are hungry, as the cost-of-living spirals out of control. We do not want a Sri Lankan-type situation to develop. While Exxon is concerned about the stability of its profits, the PPP Government must be concerned about the stability of its tenure and reelection in 2025, if it refuses to press for renegotiation. Exxon/HESS and CNOOC do not vote in Guyana ; it is the masses of Guyanese who elect and fire a Government. We are in the era of vote them in, vote them out, where one seat makes a big difference.

 

The Exxon head was referring to Article 32 of the contract, which lists conditions for ‘Stability of the Agreement’ at 32.1 that “ Except as may be expressly provided herein, the Government shall not amend, modify, rescind, terminate, declare invalid or unenforceable, require renegotiation of, compel replacement or substitution, or otherwise seek to avoid, alter, or limit this Agreement without the prior written consent of Contractor.” I call on our AG to give the nation an opinion whether this “Stability Clause” is in clear conflict with the powers of our Parliament and Constitution. When the PPP accused the PNC of signing a bad contract, which provisions did they have in mind? Now that they are in Government, the PPP seems quite comfortable with the contract and is vehemently defending it in court. They make it seem as if you call for renegotiation, you are anti-government.  

 

What the oil operators need to understand is that the oil is Guyana’s oil. The oil belongs to the people of Guyana, and we the people should derive the largest benefit from oil, not the oil companies and their investors. Guyana and Guyanese first. We want the oil companies as investors to receive a fair income from their investments, but we don’t want to be gouged and bullied for 20-30 years. The Stabroek Block is the largest block with the most oil. The Production Sharing Agreement (PSA) signed in 2016 by the PNC in secrecy and without parliamentary discussion and approval, is rigged against the people of Guyana. It’s a steal not a deal. It’s the worst oil contract in the history of oil. The “Global Witness” Report had outlined many questionable practices surrounding the signing of the agreement. The “Oil Renegotiation Movement” is not asking for the oil agreement to be constantly changed. We want to “review and renegotiate” as the PPP Presidential Candidate and top leaders had promised during their campaign. Western governments including President Biden had said oil companies should pay more taxes since they “made more money than God” with recent windfall profits given the surge in oil prices. Guyana did not make such a call. 

 

Nation, it’s our country and our wealth. Any new contracts must avoid all the loopholes of the Stabroek Block, but going forward, the Stabroek Block must be renegotiated too. No free pass to leave it, as is. We must care, and we all must join the Renegotiation Movement for a better deal so we may have the good life now. Please donate to the Oil Contract Renegotiation Fighting Fund!

 

Sincerely,

Dr. Jerry Jailall