Diaspora body condemns Govt.’s unwillingness to ask for renegotiation of ExxonMobil’s contract

Jul 08, 2021 News

Kaieteur News – On July 2, 2021, the Attorney General, Anil Nandlall, addressed two separate congregations of the Guyanese Diaspora in Queens, New York. At the smaller of the two meetings, Mike Persaud, MBA, a member of the Oil and Gas Governance Network, an overseas-based organisation that addresses issues relating to Oil and Governance, posed several questions to the Attorney General as it relates to the Stabroek Block Production Sharing Agreement. Among his questions, he asked, “Why don’t you and your government ask ExxonMobil to come back to the table to review the terms of the Contract?”
According to Persaud, the AG in reply inferred no intention on the part of the PPP/C Government to attempt to renegotiate. Persaud stated, “Mr. Nandlall began talking about the ‘four corners of a contract’ that must be respected. He said the contract had been negotiated in 2016 by the previous government…He [also] said from now on, his government shall negotiate new PSAs on all future oil blocks – ‘on our terms’.”
Prior to this pronouncement, Persaud had stated that “Guyana is losing US$24 billion on nine billion barrels reserves in the Stabroek Block – nine billion times average price of US$60 times 4.25 percent.”
The promise of the AG to negotiate future oil blocks “on our own terms” was met with doubt from Persaud, who noted that PSAs have been concluded and signed by the Government for the following oil blocks: Berbice, Canje, Corentyne, Demerara, Kaieteur, Orinduik, Stabroek and Roraima. He further posited that “The problem the Oil and Gas Governance Network has with the Government of Guyana, is that it has thus far stubbornly refused to simply ask ExxonMobil to come back to the negotiating table. Not demand, not threaten to litigate the contract, just ask.”
This rationale, according to Persaud, is rooted in the notion that “ExxonMobil is interested in a long-term harmonious, stable relationship between the oil company and the host government – and would therefore be amenable to work out fairer terms to make both parties happy to sustain a long-term relationship.” He further noted that the Guyanese Government, by resolving to simply ask for renegotiation, would consequently place the onus on Exxon to officially refuse to renegotiate. “Let ExxonMobil go on the record and say no. Let ExxonMobil seek refuge in “sanctity of contracts. We do not know how ExxonMobil would respond,” he added.

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