Latest update March 29th, 2024 12:59 AM
Mar 15, 2018 Features / Columnists, Peeping Tom
The best of public relations (PR) often cannot change the worst of situations. First, it was ExxonMobil, and now it is the government undertaking a PR counteroffensive to stave off adverse reaction to the production sharing agreement between ExxonMobil and Guyana.
The latest PR blitz is all too futile. The facts that confirm that Guyana got a lopsided deal are unassailable. PR and spin are not going to change anything.
It is just like having a top-notch lawyer defence lawyer in an unwinnable case. If the evidence is overwhelming, there is nothing which will change that fact.
However, the government persists in repeating certain falsehoods in the hope that eventually some people will believe it. It is like throwing shaving cream at a wall. Eventually some of it will stick.
People are not all walls. Some are able to objectively assess a situation for themselves and arrive at their own conclusions, regardless of their political affiliation.
The government is holding on to lifelines that have long been cut loose. The government’s justification of the contract it signed is based on the following arguments. First, that the contract must be assessed in light of the Venezuelan claim to the area under exploration. Second, is that the investor could have walked.
Third, that Guyanese must be more concerned with what they do with the revenues the country will earn rather than the take the country got from Exxon. Fourth, is that the government was shackled by the 1999 contract signed by the PPPC.
The first excuse has been rejected and proven as a falsehood. But some additional points can be made. The Venezuelan factor does not mean that Guyana should have given away its resources so cheaply. It is for the investor to assess the political risks of its investments, not for Guyana to shortchange itself because of these risks.
But there is an added dimension. Exxon has an interest in making this investment. It wants to get back into Venezuela, which has the largest oil reserves in the world. Guyana’s discovery in no way compares to the reserves of Venezuela. Exxon may very well be ‘playing’ Guyana, so as to regain a foothold in Venezuela. Negotiators who are politically savvy would have used this fact to extract a better deal from Exxon.
Exxon was never going to walk from Guyana. Guyana is strategic to Exxon in its end game with Venezuela. The elephant in the room is Venezuela. Exxon wants to get back into Venezuela and Guyana may be a pawn in Exxon’s end game.
Guyana is also important to Exxon’s financial bottom line. As has been pointed out by more than one commentator, the discoveries in Guyana have boosted the asset value of Exxon and thus it share value.
Exxon has and is making millions of United States dollars without having to drill a single well. It was never going to walk.
The argument that the government was shackled by the PPPC’s 1999 agreement is pitiful. What are the facts? The facts are that under the petroleum laws of Guyana, an exploratory licence can only be extended twice, each for periods of 3 years. Exxon’s licence under the 1999 PPPC contract therefore had to have been expired by the time 2016 came around. Exxon therefore had to come to the negotiating table.
More importantly though, Exxon, having claimed that it discovered oil, had to come to the negotiating table to obtain a production licence. It was Exxon, not Guyana, which asked for the renegotiation.
There are different parties to the two contracts. The 1999 contract was between Exxon and Guyana, while the 2016 contract was between three companies and Guyana. The 1999 contract, therefore, did not bind the government.
The money that the government is spending on its PR counteroffensive could be put to better use. Good money is going to waste while the government struggles to convince the Guyanese people that it maximized the benefits which Guyana got from Exxon.
THIS IDIOT TELLING GUYANA WE HAVE NO SAY IN THE 50% PROFIT SHARING AGREEMENT WE HAVE WITH EXXON.
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