Kaieteur News – The Front Page Comment in yesterday’s edition of this newspaper repeated the call for renegotiation of Guyana’s oil and gas contracts. It pointed to what is taking place in Mozambique, where it is reported that agreements are being renegotiated.
These agreements, however, which are being renegotiated relates to the use of gas. Both Exxon and Total are seeking to extract more gas in order to cut their costs. So, it is not a question of the country insisting on a better deal. In fact, three days ago, it was reported that the government of Mozambique was not even aware of the talks, which were taking place between Exxon and Total.
This is how the oil companies operate. They make their plans behind your backs. And then they present you with a fait accompli.
In the case of Guyana, the ship of renegotiation has left the harbour. The people were not on board and therefore the governments (APNU+AFC and the PPP/C) have piloted the craft out to sea.
The governments have betrayed the people during the opportunities, which were presented for renegotiation. The Coalition government had the best opportunity to extract a good deal for Guyana. Exxon’s permits had expired and it had to seek a production licence to begin production. But instead of pressing Exxon for better terms than what was obtained at a time where the basic was not de-risked, the Coalition got a paltry one percent more, no ring-fencing, cost recovery with a cap of 75 percent and a suite of concessions which amounts to more freeness than Santa Claus.
Guyana was shafted by the Coalition. It has long been suspected that this agreement was signed behind the back of then President David Granger. His petroleum advisor has publicly said that when he told Granger about the agreement, the President seemed surprised.
A decision of this magnitude would have had to been sanctioned by Cabinet. The PPP/C now should be in possession of the Cabinet records of the APNU+AFC administration. They should inform the nation as to whether the contract was considered by Cabinet and whether it received the blessings of the President.
Under the Constitution of Guyana, all executive power is vested in the President. And while it is true that the President can delegate these powers, again in accordance with the Constitution, when it comes to the signing of an oil contract any such delegation would have to be specified by fiat. The broad responsibilities granted to the Minister of Natural Resources does not allow for any signing of any major agreement without the expressed consent of the President or Cabinet.
When the PPP/C in 2015 handed out oil blocks, it was signed by the President. Unless the President authorized, specifically, the signing of the Production Sharing Agreement between the Government of Guyana and ExxonMobil, then this agreement is not legally binding and should be so challenged in our courts of law.
The PPP/C also betrayed the people. Instead of moving to strike a better deal, it said it would review, rather than renegotiate the contract. That review came up far short of expectations. In fact, it represents a disappointing sleight of hand on the part of the PPP/C.
The ship of renegotiation has sailed because our leaders were either at ‘sea’ when it came to the agreements or they were not inclined to seek a superior deal for the country. Guyana was shafted twice, first by the APNU+AFC and then by the PPP/C’s so-called review instead of renegotiation.
A better deal will not originate from the country’s political leaders. It is therefore useless to be looking towards the government to extract better terms from ExxonMobil. That ship has sailed without the cargo intact.
The only option now open to Guyanese is to demand that the government determine whether the Production Sharing Agreement was signed with the consent of the President. If it was not, then its legality can be challenged on the grounds of lack of capacity to contract. Unless the people come on board and demand a better deal, this ship too will likely sail.
(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper.)
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