Jan 03, 2018 News
By Abena Rockcliffe-Campbell
The government has finally released the oil contract it signed with ExxonMobil over a year ago and the views about the contract are now being aired far and wide.
Some commentators have condemned the government for signing on to such a contract. However, political scientist, Dr. David Hinds, is of the opinion that the government really could not have done better for the nation.
He said that ExxonMobil is very much aware of Guyana’s desperation and knows that the country would be hard pressed to do much better.
He said, “I think we got the kind of contract that any government which negotiates from a position of relative weakness would be able to squeeze out—from the royalty to the signing bonus, to the tax and other concessions, we have guaranteed ExxonMobil.”
Dr. Hinds said that as much as Guyanese would have liked to see a better contract, “We have to be realistic.”
The political scientist noted that the government went into the negotiations as an inexperienced actor on these matters.
“Further, we negotiated as a country that is politically divided, desperate for something to get our foot in the door and desperate for revenue that we would not normally have. And, our government understandably wanted something big before the next election.”
He continued, “When the company sitting at the other side of the table knows that, they would logically offer as little as possible and demand as much as possible. As the Exxon man hinted, the new kid on the block is never in a position to demand much. We just have to live with that reality and move on.”
Dr. Hinds admitted that the government could have got at least a few better provisions were it better prepared, better informed and adopted a more national approach to the matter. But, from Hinds’s view point, that reality “is now water under the bridge.”
He said, “I think we should give the government a break on this first contract. However, going forward, they have to learn from the errors here. This, for me, is the test—given what you now know; how do you set yourself up for better?
“How do you now develop the kind of leverage that is needed to negotiate with multinational corporations? In other words, how do you use the little you now have to get more as you move forward?”
Dr. Hinds said that Government would do well not ignoring the opportunity it now has to redeem itself. He said that in future negotiations, the government must place emphasis on having a strong national front.
“I still think that small countries like ours are always vulnerable in these negotiations but that vulnerability is exaggerated when you do not have a strong nationalist front at the negotiating table. I still believe a negotiating strategy and team that have the support of the broad political spectrum stand a better chance of getting more for the country.
“This was the biggest error with this first contract and should not be repeated. The other big error was of course the secrecy surrounding the entire process,” said Dr. Hinds.
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