ExxonMobil contract as oppressive as GTT monopoly deal- Ramson

Apr 15, 2018 News

Attorney-at-law, Charles Ramson

Attorney-at-law, Charles Ramson, has said that the 2016 contract inked between ExxonMobil and Guyana is reminiscent of the Guyana Telephone and Telegraph (GTT), which allowed that company to stifle the nation.
In 1990, the People National Congress government and Atlantic Tele-Network (ATN) signed an agreement in which ATN acquired 80 percent shares in GTT and the government retained 20 percent. GT&T subsequently commenced operations on January 28, 1991.
According to Ramson, the ExxonMobil contract is just as oppressive as the GTT contract and will see generations suffering the consequences, “but the effects of this contract (ExxonMobil’s) will be worse.”
Ramson said, “The contract with Exxon will trap Guyana for decades to come even after the APNU+AFC loses power; the situation with GT&T’s 40-year monopoly of Guyana’s international voice and data traffic awarded by the PNC.”
Ramson noted that the GTT contract has severely restricted the liberalization of the telecommunication sector in Guyana for decades causing Guyana to have about the highest telecommunication rate in the world.
The money that GTT has been able to make off Guyana is well known. In the operating year 2007/2008 alone, GTT raked in $21M of which $9M was declared as profit. This sort of profit was recorded despite the fact that GTT was paying $100M per month, accumulating to $1.2B per year, to its parent company, ATN as “advisory fees”; an expenditure that stunned authorities.
Many questioned, how can a company operating in a nation as poor as Guyana make such a large turnover and profits?
While Guyana wanted to wriggle itself out of the vice of GTT, the contract was binding and little could have been done. As a result, 27 years later, telecommunication in Guyana is still to be liberalized.
Just last year, when the Guyana Consumers Authority was advocating liberalization, it had this to say, “For 26 years, the Guyanese consumers have funded all investments by GTT within and outside of Guyana. This funding is the formidable basis of a company that uses internal interest-free funds to expand and then claim increased rates from double dipping.”
Ramson said that 27 years from now, Guyana will still be feeling the squeeze of the ExxonMobil contract which the APNU+AFC Government is not willing to renegotiate.
“In fact, Article 32 of the contract (the stabilization clause) with ExxonMobil has already trapped Guyana since it states that there can be no re-negotiation of the contract unless ExxonMobil agrees. This, it goes without saying more, is flaw number one and will see not only the lost revenue amounting to billions of US dollars from the unfavourable fiscal terms of the contract but the loss of an opportunity for another government to correct the flaws in the now extant contract.”
The oil and gas consultant said that no contract should have a stabilization clause without a term limit.
Ramson further noted, “Recently, we heard the Minister of Natural Resources saying that the contract will be reviewed in four years, but review doesn’t mean renegotiate. I hope Guyanese note that.”
The lawyer said Guyana will definitely not be getting the kind of revenue it deserves from ExxonMobil.
Ramson opined that decades after Guyana signed the GTT agreement, “there is no way we should have been making the kinds of mistakes made in the ExxonMobil agreement. Our politicians should have learned. Now we all have to live with the consequences of mistakes made over and over again.”

Discover more from Kaieteur News

Subscribe to get the latest posts sent to your email.

Latest News