Jagdeo challenges Norton’s oil and gas team to draft plan for renegotiation

Mar 01, 2024 News

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Kaieteur News – Vice President Dr. Bharrat Jagdeo on Thursday challenged Opposition Leader, Aubrey Norton and his ‘secret’ oil and gas advisors to draft a “sensible” renegotiation plan for the lopsided Stabroek Block oil contract.

In response to a question posed by Kaieteur News, the Vice President said that Norton’s refusal to reveal the identity of his oil and gas committee is “nonsense”. Norton in a press conference, held earlier Thursday, refused to name his oil and gas advisors.

Jagdeo labeled oil and gas issues as “serious developmental matters” and said “It’s utter nonsense you have to compete with your ideas, you have to compete with people, not on racism all the time.”

Kaieteur News later asked the Vice President if he will support Norton’s oil and gas advisors if they devise a strategy to renegotiate the Stabroek Block deal.

Jagdeo responded, “Let him come with a strategy and then I will speak about it” while noting that such a strategy would receive his support if the plan is sensible.

“If it is a clownish strategy don’t expect me to support it, if it’s sensible and it takes all the variables into consideration…” Jagdeo said his support would be forthcoming before listing variables Norton and his team must consider should they decide to take up the challenge and draft the plan.

The first variable is that “Net Zero” can be a “constraining factor” for the future of oil and gas.

Net zero refers to the balance between the amount of greenhouse gas (GHG) that’s produced and the amount that’s removed from the atmosphere.

According to Jagdeo, Net Zero is a global reality.  “…Every country speaks about it, every country in the world speaks about it, Saudi Arabia speaks about it UAE Qatar and we in Guyana behave as though that doesn’t exist, that variable, which is a constraining factor for the future” the Vice President told Kaieteur News.

The government is of the view that with the world moving away from fossil fuels to net zero carbon or green-house gas emissions, the demand for oil will significantly decline.

As a result, its current policy allows ExxonMobil to operate with a contract that favours it and to pump Guyana’s oil at an accelerated pace since it believes that demand for oil will decline in the future.

Many experts in the sector believe that this will not happen and the demand for oil will continue.

At the recently concluded, Guyana Energy Conference and Supply Chain Expo, Chief Executive Officer (CEO) of a Nigerian oil and gas company, Adewale Tinubu agreed that fossil fuels will still be needed even as the world seeks to transition to cleaner energy.

Jagdeo’s second variable is a decline in funding for fossil fuels related investments globally.

“In fact some countries are banning investments in fossil fuels or banks for financing those. So you are competing for scarce funds now. That is the second point,” Jagdeo said.

He continued: “Norton’s team will have to consider whether a renegotiation will kill the momentum for future oil and gas development in Guyana leaving it stranded with resources that it cannot develop.”

“I just give you an example of Suriname,” Jagdeo said while adding, “If those three variables are looked at in conjunction with what will bring more to our country then that would be a great Strategy”.

He noted that his government has already examined all of the variables he listed and has a keener understanding of them.

Both the Vice President and President Mohamed Irfaan Ali have repeatedly said the oil contract will not be renegotiated because of the principle of sanctity of contract and the possibility of losing investment in Guyana.

Meanwhile, the Opposition Leader has been evading the renegotiation of the contract but says he wants more from the lopsided Stabroek Block deal.

Kaieteur News Reported on February 23, 2024 that Norton said he believes the Production Sharing Agreement (PSA) with ExxonMobil can be amended for Guyana to benefit more, however he is unwilling to engage in a “renegotiation” of the deal.

Norton said, “I have said from the inception that we believe the law the contract provides for us to engage Exxon to get a better deal for the Guyanese people.  We have no problem with that. I have also said that no one will choose our language; we are not compelled to say renegotiate. It has connotations way past its appearance and so I want to make it very clear, no one is going to choose the language we use on this question.”

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• ExxonMobil, Jagdeo, Norton, oil deal, Stabroek Block Contract

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