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Jan 01, 2022 News
Kaieteur News – Stand up! Speak out! Be Loud! This oil Wealth belongs to us!!! — are just some of the slogans which headlined the campaign for the renegotiation of the oil contract. The campaign which started in June 2, 2021 is part of a bold step taken by Kaieteur News’ publisher and ‘better oil deal’ advocate, Glenn Lall.
Kaieteur News would have exposed that Guyana’s PSA for the Stabroek Block has some of the world’s worst provisions when compared to 130 other deals. For example, the PSA sees the government paying the contractor’s income tax out of the country’s share of the profits. However, none of the 130 PSAs examined shows this arrangement.
Further, Guyana’s PSA is the only one out of 130, which has very moderate work obligations for contractors who are vested with offshore licences. Additionally, the Guyana-ExxonMobil PSA is the only one out of 130 contracts, which has no ring-fencing provisions to prevent costs of unsuccessful wells being carried over to that of successful wells.
There is also no sliding scale for royalty to increase as production improves. And that is not all. Guyana’s PSA is the only one out of 130 that allows insurance premiums to be fully recovered as well as interest on loans and financing costs that are incurred by the contractors
Lall has been very vocal about his views on the current oil contract and the need for a better deal in which all Guyanese can benefit. He has been unrelenting in efforts to ensure that country patrimony is protected by organising protests and taking his message on Radio, Facebook, YouTube and even Tiktok.
The newspaper publisher has been adamant that the two percent royalty deal for which oil giant ExxonMobil has inked with local politicians is not carved in stone and as such can be changed in favour of the citizens of Guyana.
Commenting recently on the oil contract campaign, Lall said that, “To date the fight that Kaieteur News and several other media houses have been waging against this lopsided oil contract and the way that both governments have been dealing with the business aspect of the oil industry to say it saddened the heart, is putting it mildly.”
He compared the deal to a road to complete disaster not only for this present generation but for future generations. “We are heading straight into an oil curse darker than the entire Africa where it stands today, whether the citizens want it to continue this way is another story,” Lall added.
Nevertheless, the newspaper publisher vowed that as “we enter 2022, the fight for a fair share of our resources will continue every day.”
In the first half of 2021, Kaieteur News published a series of articles and photographs which highlighted the need for the renegotiation of the contracts.
Since the beginning of the protest, Guyanese locally and in the Diaspora have joined the calls to have the contract changed. Many citizens, local and abroad, have lent their voices to the issue. Even before the official campaign organised by Lall got underway, Guyanese had started to speak out on the lopsided and unfair oil deal. In January of last year, this newspaper published a piece headlined “Suriname secures three times Guyana’s Royalty for latest oil find”. In that piece, Kaieteur News had reported that Suriname was able to obtain a 6.5 percent royalty from operators, Total and Apache, for its Maka-1 Well.
This percentage is three times the royalty Guyana obtained from ExxonMobil for its Stabroek Block and six times the royalty it obtained from Tullow for its Orinduik Block. Suriname was also able to negotiate a deal that allows it to benefit from a 36 percent tax on income from the operators.
The report angered vendors of the La Penitence Market who expressed their views on the matter.
For one, Mr. Chunilall, who owns a stall in the market, said that he is “very disappointed in his leaders for signing such a lop-sided deal” with ExxonMobil’s Subsidiary Esso Exploration and Production Guyana Limited (EEPGL). The businessman said as a Guyanese, he is feeling very ashamed that Guyana’s neighbour, Suriname, got a far better deal.
He added that Guyana should have sought advice from countries with experience in order to avoid such a “raw deal”. Chunilall told Kaieteur News that he refuses to believe that all is lost.
He called on Guyana’s leaders to pressure ExxonMobil and Tullow for a renegotiation of the Production Sharing Agreements (PSAs). Another stall owner, Margaret, who operates in the La Penitence Market, said that she too supports the call to renegotiate Guyana’s oil contract.
However, she told this publication that she has lost tremendous faith in political leaders from both sides of the political divide.
She believes that Guyana’s leaders cannot be trusted to negotiate any deals on its people’s behalf because they are “too corrupt”. She also said “even if Guyana is successful in obtaining a better deal, its people will still be neglected since political leaders will fill their pockets.”
Uncle Buddy who sells clothes said that he wants his “leaders to go to Suriname and learn how to make a contract.” He continued that after Guyana’s leaders consult with Suriname, they must return and renegotiate the deals they had previously signed.
Uncle Buddy said that he recently read in a news article that the government signed on to such a one-sided deal because of threats from neighbouring Venezuela. He said that “Guyana does not need friends; it needs money.” He gave an example of selling a pair of pants and preparing a plot of land to plant.
Buddy said, “You and your neighbour have a piece of land of the same size. Both of you want to prepare the land to plant the same crop. A man tells you that he will prepare your land for $20,000. You agree and pay that price. Your neighbour who has better sense finds a man to do the same job for $10,000. Who is in a better position? You or the neighbour? Guyana is the stupid one and Suriname got better sense.”
In his next example, he said, “You and your neighbour sell pants, so both of you go to the Chinese and buy a pair pants for a $1000. You now decide fuh give away you pants fuh $1,500 but your neighbour decide fuh sell he pair a pants fuh $2000.”
“Who is in a better position, you or the neighbour? The neighbour because you pants gon sell out first year cause it cheap but when you pants sell out, the neighbour get a chance fuh sell he pants. So in the end, you only win $500 but the neighbour wins $1000. Guyana gave away the oil fuh $500 and Suriname sell dem own fuh $1000.” Uncle Buddy said, “No! This is nonsense. We must get a better deal, at least four percent royalty if not six percent.”
The vendors are just a faction of Guyanese who voiced their frustration at the issue.
In support of calls made by Kaieteur News’ Publisher for renegotiation of the oil contracts, the Diaspora Group – The Oil and Gas Governance Network (OGGN) launched their campaign in June under the slogan “Renegotiate Oil Contract Now.”The group hosted a petition drive in Little Guyana, Queens, NY. Their goal is to collect thousands of signatures from Guyanese residing in New York, Canada and elsewhere to support the call for renegotiation that will result in Guyana getting more money to fund its long list of urgent needs such as flood control, sea defences, education, health, housing, a living wage for the working poor.
The petition addressed to President Irfaan Ali reads, “Dear President Irfaan Ali, The Oil Contracts are very lopsided against Guyana. Global Witness calculates Guyana loses $55 billion on 8 billion barrels when compared to a fair contract. Compared to Suriname’s, on the Royalty alone, Guyana loses $25 billion on 9 billion barrels.
These sums of money are a windfall to the shareholders of the Oil Companies at the expense of Guyanese citizens. The Contract provides for renegotiation providing both parties agree. Just ask ExxonMobil to come back to the negotiation table. We, the signatories urge you to take the first steps to get a FAIR DEAL CONTRACT.”
A release from the group outlined further that New York-based members of OGGN had set up a table in the northwest corner of the intersection of Liberty and Lefferts Boulevard in the heart of what is now known as “Little Guyana”. The intersection is the last stop of the elevated subway line – where upwards of 75 percent of the passengers are Guyanese.
“OGGN members were there to greet them with banners and placards containing messages of a lopsided contract. Many Guyanese walked over to a table setup on the sidewalk and were happy to sign the petition,” the statement said.
Additionally, the release said that some Guyanese New Yorkers held placards which compared the Suriname and Guyana contracts and there were also other placards – one in particular read, ‘Global Witness calculates Guyana loses $55 billion on 8 billion barrels’.”
The statement added that most of the folks who signed the petition expressed satisfaction that a convincing case has been made to support the call for renegotiation.
In the interim, OGGN said it will continue their campaign in New York every Friday from 3:00 – 7:00 pm for the rest of the summer. The group promised that campaigns will be launched in other countries with a high Guyanese concentration. The petition drive followed previous OGGN online petitions that garnered a few thousand signatures.
According to the release, OGGN’s goal is to encourage the government to renegotiate one of the worst oil contracts in the world and support the Government fully as it becomes empowered and emboldened to request Exxon to renegotiate.
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Where is the BETTER MANAGEMENT/RENEGOTIATION OF THE OIL CONTRACTS you promised Jagdeo?
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