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Review all oil contracts signed by us; get better value for the people – Jagdeo to Govt.
Opposition Leader, Bharrat Jagdeo
By Abena Rockcliffe-Campbell
As circumstances and times change, so do agreements. Noting this fact, former President, Bharrat Jagdeo says that there should be nothing stopping the current government from renegotiating all oil contracts signed under the People’s Progressive Party/Civic (PPP/C) administration.
Jagdeo, the Leader of the Parliamentary Opposition, said this on Thursday during his weekly press conference. He recalled the “public outcry” over the provisions in the renegotiated contract that the Granger-led Administration signed with ExxonMobil.
“Our government said that future contracts will not enjoy the same benefits as ExxonMobil did.”
Jagdeo said, “So let us just say that the ExxonMobil contract is sanctified and it cannot be changed. That contract was signed when there was a small quantity of proven reserves. But now we know that there are at least 4 billion barrels of proven reserves. So that changes the entire debate. So if government could have renegotiated the 1999 agreement and make it more favorable to the company, why could it not review any other agreement signed by the PPP now that the circumstances have changed, to ensure that more accrues to the people of Guyana?”
Jagdeo said that government had originally indicated that all contracts would have been reviewed. He said that the PPP/C was looking forward to that. He asserted that this was the reason the PPP/C was not in favour of Government handing concessions to Mid-Atlantic Oil and Gas Inc. on Wednesday last.
Jagdeo told the media, “We heard them saying that they will do it (review contract). So we were saying why not defer this proposal to the Parliament until you come up with a policy position. Assuming the ExxonMobil contract is a done deal and we have to respect the sanctity of contract, we want to know what about the other contracts.”
Jagdeo said that the opposition desires clarity, “Are you going to review the contracts or not? If not, just let us know now. But if you are going to do the review we need to know what will be the general terms, what will be given, what will not.”
Jagdeo noted, “We are moving ahead with sanctifying contracts when the entire situation has changed. We are on the world map now as a major reserve for petroleum. But this government seems very unwilling to do anything and we wonder why. The same reason 1999 was reviewed, let us review all.”
Jagdeo said that it would not make sense giving concessions to companies like Mid Atlantic when the contracts will have to be reviewed. He noted that when government was seeking to approve the concessions, Ministers stressed that Mid-Atlantic is a local company. But Jagdeo said he understands that “the big guys already started buying up these companies (like Mid-Atlantic).”
Mid-Atlantic will receive tax concessions for its oil and gas explorations in the Canje and Kaieteur blocks.
The motion for such, tabled by Finance Minister Winston Jordan, was approved on Wednesday during the 96th sitting of the National Assembly.
Jordon said Section 51 of the Petroleum Exploration and Production Act No. 3 allows for the Minister of Finance to approve certain concessions.
He noted that it was under the very section of the act US oil giant ExxonMobil benefitted.
“The Mid-Atlantic Oil and Gas Inc may not be Exxon or any of the other majors that we are so accustomed to, but it is important from Guyana’s standpoint. It is small, it is unknown, but it is in the oil and gas sector.
“Importantly for Guyana is that it is a local company comprising many enterprising and well-known Guyanese,” Jordon put forward.
Mid-Atlantic Oil and Gas Inc was granted operations licence under the former Government on March 4, 2014, with a Production Sharing Agreement signed on the same date.
During the debate on the motion, People’s Progressive Party (PPP) Member of Parliament (MP) Irfaan Ali proposed that the finance minister defer the motion until the Government reviews ExxonMobil’s Production Agreement and design a framework to guide the new negotiations.
The motion was taken to a vote and was approved by a majority vote from the Government’s side of the House. The Opposition abstained from the voting.
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