Aug 08, 2022 News
…now saying deal not the “worst in the world”
…attacks critics who point out flaws in the deal
Kaieteur News – After repeating on record numerous times that Guyana has one of the worst oil deals in the world, Vice President Bharrat Jagdeo seems to no longer believe his own words.
On Saturday during an outreach in Patentia, West Bank Demerara, the VP told hundreds of Guyanese, seeking part-time jobs, that saying the contract is the worst in the world is simply not true. In his address, while admitting that Guyana has a bad deal and that it must be changed, the former Head of State on the same breath insisted that the People’s Progressive Party (PPP) now stands in the middle where the contract is concerned. According to him, “The contract was bad, we have to change it in the future but we are not going to renegotiate now… on the other hand you have Kaieteur News and a few others who say it’s the worst contract in the world, that’s not true too.”
Instead, Jagdeo said, “We stand in the middle and we are not going to be populists in orientation because government’s side that are populists in orientation and say things that people only want to hear, they can never craft a sustainable policy for the country…”
Jagdeo has been charting the way forward with regard to the management of the oil and gas sector in the country. He was keen to point out, “when I see the schizophrenia out there and almost the extremism that we notice in the newspapers everyday swinging from one end to the other in terms of policy making, the PPP cannot succumb to that because if we only succumb to that form of policy making then we’d lose sight of the bigger goal and the big goal is sustainability. The big goal is long term development, however hard it is.”
The Vice President has, during public meetings and press conferences cursed the 2016 oil contract signed by the former A Partnership for National Unity + Alliance For Change (APNU/AFC) Coalition. In fact, during his time as Leader of the Opposition in 2018, he told members of the media that the contract made him “depressed”.
He was reported as saying, “You know, all weekend, since this contract was released, I walk around and I am a little bit depressed. I feel sad without knowing why and then I think about it. Frankly speaking, when you work so hard to move a country from where it was – heavily indebted and no money to spend on itself to one of the lowest indebted countries in the western hemisphere … – to where we are today and just when we have the possibility of turning the corner, to have a Government come in and squander because of incompetence, a future that we could have by making bad agreements.”
Jagdeo is on record also noting, “When you compare what we got with what ExxonMobil is getting out of this contract, it seems as though the renegotiation (of the 1999 Janet Jagan oil contract) worked significantly in their favour, not in our favour.”
Not only him but other members of the Cabinet including Attorney General, Anil Nandlall and Natural Resources Minister, Vickram Bharrat are on record contending that the Exxon contract is the worst in the world and Guyana is left tied to such an agreement as a result of the former administration’s incompetence. Back in June last year, Minister Bharrat in describing the oil deal said, “The PSA which was signed in June 2016 is probably one of the worst agreements in the history of this world or among all oil countries in this world. That was probably the worst oil deal ever.”
Similarly, Nandlall in an interview aired in September last year by Globespan stated that the Product Sharing Agreement (PSA) that Guyana signed with American oil giant, ExxonMobil is one of the most lopsided agreements signed in the country’s history. To this end, the AG noted that the lopsided contract must be a mistake that Guyana learns from when going forward with signing future oil and gas agreements.
Provisions in the 2016 PSA
While both the PPP and former Coalition government are determined to stick to the lopsided 2016 oil contract, citizens in Guyana have mounted daily protest action, highlighting the need for changes to be made so that they can secure benefits from the deal. They believe that the present agreement only favours the oil company, as Guyana receives a mere two percent royalty for its sweet light crude and settled for 50 percent profit sharing, after Exxon takes 75 percent of the earnings to clear its expenses.
The deal that the oil company often brags about to its shareholders, also forces Guyanese to pay their share of taxes, amounting to millions of US dollars each year. This figure is likely to further balloon as more operations come on stream. In addition, the country is allowing ExxonMobil to operate offshore without full liability coverage in the event of an oil spill, which means that the risk is borne by Guyana. Another key provision that is lacking in the document is ring-fencing provision, which would avoid the oil company from using the petroleum revenue in one field to cover for expenses in another.
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