Latest update March 25th, 2023 12:59 AM
Jan 26, 2018 News
Despite extensive criticisms about the 2016 Production Sharing Agreement (PSA) that Minister of Natural Resources, Raphael Trotman signed with ExxonMobil, Government has not seen the need for any further amendments to be made to the document.
At a press conference held yesterday, Trotman said that no review of the contract is envisaged.
“I am not presently advised that government has any intention revisiting that agreement, because when we weighed in the baskets and scales – what we are getting against what we are not getting – we decided that this is what we are going to content ourselves with,” said Trotman.
However, the Minister said that the Government will use the lessons learnt from the negotiation of this contract to ensure that it gets the best from PSAs that it may sign in the future.
“We will ensure a different regime for new companies coming,” said Trotman.
Trotman hinted that one of the reasons there was hesitation to release the contract in the first place was the foreseen criticisms.
“This is one of the reasons why governments and companies are loath to making them (contracts) public because they criticize every word. There is always a tension between with publication and the need for transparency.” Trotman boasted that the APNU+AFC government has aspired to a greater level of transparency than governments of the past, “We have broken from the past governments in Guyana from 1966 to now.”
Trotman said that ExxonMobil deserves the advantages it has been given in the contract. Essentially, he said, the company needed to be rewarded for biting the proverbial bullet and taking a chance in Guyana’s waters when other companies didn’t want to.
Trotman said, “Other companies had shied away from developing the resource offshore.”
This, he said, is because “oil, at the time, was trading at US$30 per barrel and the prospects, given renewable energy, were not all together favourable. We needed a multinational company with strong credentials given. We had a company keen on forging production and we felt this was a partner to develop a long firm relationship with.”
Trotman said that ExxonMobil will now act as an “anchor” and will bring other companies into Guyana’s waters “then we will apply different terms.”
Further, Trotman said that ExxonMobil is a blessing to Guyana.
He said that the Petroleum Directorate in Norway told him, “You should be lucky you have Exxon to deal with, because they are lots of other terrible countries out there, so Guyana should be lucky. I was startled by those words, but I remember them today. I am reminded that in Norway they felt that this is a good company and these are good terms to start the industry on.”
The criticisms about the contract are wide-ranging. Even the International Monetary Fund (IMF) spoke about the PSA having many loopholes. It was noted by the IMF that Guyana could end up standing the cost of unsuccessful exploration by ExxonMobil.
Locally, there have been criticisms about the signing bonus, the royalty rate, the stability clause, the uncapped importation, the force majeure clause and the cost recovery provisions, where almost everything is included.
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They are being paid while we are being played…your pain is their gain!
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Trotty is a class act….the arrogance…haughty…heavily loaded phrases….boy o boy…great things in store for the natives…wow!