Latest update April 17th, 2024 12:59 AM
Jun 26, 2022 News
– bring changes to Exxon contract now – Glenn Lall
Kaieteur News – Amid growing discontent over the lopsided contract Guyana signed with ExxonMobil, Kaieteur News Publisher, Glenn Lall continues his advocacy for changes to be made to the deal, saying that Guyanese cannot wait on government’s promised model Production Sharing Agreement (PAS) for future contracts before reaping the benefits of their oil resources.
Using the courts, where he has launched a challenge to the tax waivers granted to the oil companies, as well as daily street protests, Lall said he is confident that his objectives will be achieved at the end. “I am confident that things will change and we are already seeing changes…more and more citizens are coming out to the protests. People are waking up and are becoming more aware of the wholesale robbery of our oil resources,” Lall said recently.
His optimism is also premised on recent statements made by Vice President Bharrat Jagdeo, who agreed that changes has to be made to the contract, citing grey areas such as: lack of ring-fencing provisions in the deal; tax waivers and the lowly two percent royalty Guyana is receiving for its oil. “These are things we have been calling for all these years,” Lall noted as he referenced a recent news conference with Jagdeo during which he made the comment.
“When Jagdeo uttered the words at the news conference I wanted to interrupt him and ask, ‘well then why the government has not acted to ensure that Guyana does not get rip off further with the lack of ring-fencing, taxes and royalties. But when you sitting at a press conference I was told you cannot interrupt a speaker while he is speaking. Since he agreed with me, I also wanted to ask him why his Attorney General in his government is fighting me in the tax case I brought to say stop this robbery going on to the people of this country…”
However, where Lall and Jagdeo differ is that the Vice President is adamant that any change to the current Production Sharing Agreement (PSA) with ExxonMobil will be a breach of contract and his government is adamant that it will respect the sanctity of the deal. Jagdeo also assured that the government is working on a model PSA outside of the Stabroek Block.
In fact, earlier this year, government set aside in the National Budget GYD$22.4M for the hiring of a law firm to assist with the crafting of the new model PSA. During the examination of the budget, Natural Resources Minister, Vickram Bharrat had told the Committee of Supply the funds will assist gove
rnment with enhancing Guyana’s legislative and regulatory framework for the sector, in addition to the revision of the PSAs to internationally recognised criteria and standards.
The objective, he repeated, is to have a model PSA/oil contract for future deals with oil companies operating in Guyana’s Exclusive Economic Zone EEZ, offshore in order to, “bring far more fiscal benefits to the people of Guyana. “Work will have to continue to ensure we have a model PSA than the Stabroek PSA,” he said.
He indicated to the Members of the House that under the provision “we promise to (also) look at the Petroleum Production and Exploration Act of 1986,” saying it needs to be updated, and “this provision will start that process.” During the discourse, Minister Bharrat lamented that up until recently there had not been any commercial discoveries of hydrocarbon outside of the Stabroek Block by any of the other operators, a situation which changed recently when CGX Energy Inc. announced that it discovered crude in commercial quantities in the Kawa-1 Well in the Corentyne Block. Jagdeo had said before that government is prepared to rise to the occasion to ensure the model PSA will address issues such as higher royalty rates, the need for ring fencing provisions, as well as those related to taxes.
Changes now
However, speaking during one of his recent radio programmes, Lall said the changes must be made now, noting that the Stabroek Block is Guyana’s richest oil field and Jagdeo should not be allowed to say that changes could only be made in future contracts. Referencing Jagdeo’s news conference where he repeated the position, Lall said: “…as soon as I hear the VP used that word differ I know this country is in trouble, more trouble than you can dream of and the answer he gave made it clear as to what is in store for us. The man said he is not touching at all anything with the Stabroek Block that ExxonMobil has, which is squeezing the life blood out of this country…”
“He agreed with me that changes must be made, but now he is saying changes will only be made away from the Stabroek Block, is this a sellout Mr. Jagdeo? What is in it for you Mr. Jagdeo, for not touching or wanting to change anything in that Stabroek Block deal that benefits ExxonMobil so much and robbing every single citizen of this country? The Stabroek Block is the mountain where three quarters of Guyana’s oil money is on. Now you tell me man, I need help, I will go crazy, why this man don’t want to touch that, don’t want to do a single thing on that massive oil field in which the whole world is boasting how rich Guyana is…”
Lall said Jagdeo has been repeating that mantra as if it is his religion or his god, “maybe that’s his scripture from the holy books that ExxonMobil give him to keep repeating. He said we are making over new contracts, but is only for the other oil blocks, those outside the Stabroek Block. Why not the Stabroek Block Mr. VP?”
On the issue of ring-fencing, Lall said that Jagdeo, while agreeing that there needs to be changes in this area, cited that any adjustment there would be a breach of contract. “That is not so, that is not so Mr. Jagdeo, ring-fencing provision does not add any expense on the investor, it is just keeping them honest and more money for the poor citizens of this country. Why you don’t want that Mr. Jagdeo, what utter nonsense you telling this nation that ring-fencing provision will run afoul of the contract. No sir, ring-fencing is protecting Guyana’s pocket, without it, you are allowing ExxonMobil to rob us blindly, every drop of oil out there.”
Lall reiterated that he told Jagdeo to stop approving any new projects, so that Guyana can fix the four already approved, “but Jagdeo saying that will shut down the oil industry…how that is so, when you have four projects that will bring up 800,000 barrels a day, you see the kind of games Jagdeo playing with this nation. Nobody says to shut down the oil industry and if that is so, then what is wrong with that…” Lall queried, saying that Guyana was not benefitting from the resources. “No full cover insurance, no ring-fencing provision, allow the people to walk away without paying taxes on the 3rd and 4th projects, having US$30+B in bills to verify and audit which you ain’t even start yet, why are you going to approve any more projects knowing that you will continue to get robbed without correcting that.”
Oil curse
Only last week, International Lawyer, Melinda Janki said Guyana might already be in the middle of the oil curse called the ‘Dutch Disease’. She cited the daily debts that continue to rack up as Guyana forges ahead with the production of its oil, coupled with the “astonishing” deal it accepted from the oil company.
Janki gave this view recently while appearing as a panelist on a Moray House discussion on a review of oil, gas and the environment. She explained during her presentation that four years ago when she pronounced that oil would make Guyana poorer, rather than richer, the population was opposed to her comments. However, Janki said today, the reality could not be clearer as it is quite evident that the promised wealth from the oil and gas sector is yet to arrive. In fact, she pointed out, “Guyana is racking up debts that have to be paid to Exxon out of Guyana’s oil and so this vast wealth that we were promised will never arrive. We are seeing the environmental harm, Liz (the moderator) referred to the loss of livelihoods for the fishermen, the cost of living has gone up but not wages and we are now probably in the midst of the oil curse. A tiny elite is getting richer but the majority of people look to be getting poorer. The government is over spending, borrowing money (and) burdening future generations with debt…”
To top it off, the lawyer reasoned, “We have a contract that is inequitable, unjust and it is astonishing that any competent Minister could have signed such an agreement.” She pointed out that Jagdeo while in Opposition had called the then government “incompetent” for gluing Guyana to such an agreement. She, however, noted that nothing has changed leaving Guyana with the same lopsided deal.
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