The People’s Progressive Party (PPP) intends to renegotiate, with the exception of the Stabroek Block Production Sharing Agreement (PSA), all oil contracts.
The party’s general secretary, Bharrat Jagdeo, said this during a press conference yesterday at the Office of the Leader of the Opposition, in response to a question posed to him by Kaieteur News.
ExxonMobil’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL), is the operator of the Stabroek Block, with a 45 percent working interest, while Hess and CNOOC hold 30 percent and 25 percent stakes, respectively.
But ExxonMobil also has interests in two other blocks, Kaieteur and Canje.
EEPGL is the operator of those Blocks, with a 35 percent stake in each.
Jagdeo was asked, after Kaieteur News pointed this out, whether those blocks would also be exempted from renegotiation. He said that they wouldn’t, and that it is necessary that they come into conformity with the planned, new standard PSA template.
The former President had previously said that the party would look to draft a new, improved PSA template if it wins next month’s general election. The new PSA template would reportedly have modernised terms, as the old template had not been rehashed for decades. As such, it also does not consider that, boasting 19 discoveries offshore in five years, Guyana is one of the hottest destinations in the world for oil exploration.
All of the current agreements, as a result, have been criticised as outdated.
They share weak provisions, including a meager one percent royalty, that the oil companies are essentially exempted from paying, as it is recoverable.
Jagdeo’s decision to make the Stabroek PSA an exception, by his own admission, is that ExxonMobil should be awarded for its “pioneering investment” in the Block. It had made the first discovery back in 2015. It now boasts 16 high quality finds, and is producing oil in the Liza field.
Yet, the Stabroek PSA has faced most of the fire over the past few years, and is currently at the centre of worldwide public discourse on its lopsided provisions, and the unfair share it gives Guyana.
Kaieteur News has taken a principled stance on that contract, and has demanded that it be renegotiated to give Guyana a fair royalty of 10 percent.
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