Leader and presidential candidate of the Liberty and Justice Party (LJP), Lenox Shuman made it clear at a press conference, yesterday, at Duke Lodge, Kingston, that he is not in favour of the “rush” to produce oil quickly.
He said that if given the opportunity to govern Guyana, ExxonMobil, the oil giant will have to “slowdown” oil production.
His main reason was that Guyana is not prepared to handle the Oil and Gas Sector. If Exxon is allowed to speed up production, then Guyana will lose the opportunity to benefit heavily from its new found industry.
The LJP presidential candidate said that he was made to understand that the Energy Department is hiring experts to assist Guyana in key parts of the sector.
As a leader, he said even though it is necessary for Guyana to seek assistance because of its inexperience, Guyana should be given ample time learning the business of oil and gas.
He highlighted that these experts will be foreigners and it is not guaranteed that they will look after the best interest of Guyana.
Shuman added that with the current pace of ExxonMobil to empty Guyana’s wells, the oil would be finished long before Guyana can learn how to obtain maximum benefits from its resource.
With a controlled pace he said, the life time of our oil industry will be extended and Guyana will have the opportunity to educate itself on how to benefit greatly from its wealth.
Shuman also said, if his party wins the upcoming March 2020 elections, it intends to renegotiate the entire Production Sharing Agreement (PSA) that Guyana has signed with ExxonMobil.
When asked what would be a good royalty for Guyana, he responded that based on his party’s investigation a reasonable royalty is anywhere between 12.5% and 22%.
He emphasised that globally the norm for royalty ranges from 12.5% to 22% and promises that he will settle for anything between these two figures.
“This renegotiation will not only be with ExxonMobil and its Subsidiaries but it goes for Tullow also,” stated Shuman.
Apart from royalty, Shuman said, Guyana is not safeguarded by the current PSA if there is to be mishap resulting in spills.
He made mention that if we are not safeguarded and such a disaster occurs, then Guyana and its future generation will be indebted to its neighbours. This is because the countries that can be affected will have to be heavily compensated for the devastating effects an oil spill can cause.
Shuman said that Guyana is currently a poor country and the PSA signed does not guarantee Guyana a significant amount of revenue. Without the provisions in the contract to safeguard Guyana from having to compensate its neighbours, then most definitely we will be left bankrupt or probably even worst.
He made reference to the devastating effects of an underwater explosion that occurred 10 years ago in the Gulf of Mexico.
This explosion saw 4.2 million barrels of crude spill into the gulf.
According to a New York Times Article, the British Multinational Oil and gas Company, BP, the operator, paid some US$65Billion to clean up the spill.
Kaieteur had reported that the current PSA allows ExxonMobil and its subsidiaries to self-insure. This means that if there is to be an accident causing damage to the environment, the companies will be allowed to take money from their own reserves to cover these expenses.
With this being established, if Exxon cannot cover the costs of a major environmental damage, then Guyana will be left to bear the financial consequence.
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