In an advertisement published on page two of today’s edition, USA oil giant, ExxonMobil attempts to mislead the citizenry on several aspects of oil deal it has with Guyana.
In the ad, ExxonMobil says that its US$460M bill for pre-contract costs is not a trap; that it is invested in discovering Guyana’s oil future. Yet, other nations like Chad, Tanzania, Ghana, Indonesia and Uganda have strongly rejected such bills as well as prevented oil companies like Exxon from recovering costs prior to the date of discovery.
Many nations have also guarded against the costs of unsuccessful exploration through the use of adequate ring-fencing provisions. Guyana does not have this in place.
The company went on to state that it enjoys “limited” Duty free concessions. But this is far from the truth. The company enjoys duty free concessions galore. It does not have this privilege in other countries.
Further, ExxonMobil says that the Government of Guyana has extensive rights to visit its operations. But what it fails to mention is that there are other nations which do not have to provide notice at all. Uganda for example, retains the right to visit the operations of oil companies at any time. This is also the case in Ghana, where ExxonMobil recently signed an oil deal.
ExxonMobil also says that Government has “strong” audit rights. What it fails to tell Guyanese is that the Government can only conduct one audit per year. It also fails to state that Guyana is not able to access documents about operations here which may be in nations with nondisclosure laws. Other countries have guarded against being prevented from accessing information in such jurisdictions.
What is also worse is the fact that Guyana’s royalty, rental and training fees, signature bonus and fees for an environmental fund represent a gross insult when compared to what ExxonMobil has given to other “frontier” nations.
Additionally, ExxonMobil continues to state that the contract does not exempt it from any new laws or otherwise. This is false. The oil contract specifically states, “After the signing of this agreement…the Government shall not increase the economic burdens of the Contractor under this Agreement by applying to this agreement or the operations conducted there under any increase of or any new petroleum related fiscal obligation, including but not limited to, any new taxes whatsoever, any new royalty, duties, fees, charges, VAT or other imposts.”
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