Latest update May 21st, 2024 12:59 AM
Apr 02, 2024 ExxonMobil, News, Oil & Gas
Kaieteur News – Attorney-at-Law and Chartered Accountant, Christopher Ram has called on ExxonMobil Guyana Limited (EMGL), the operator of Guyana’s prolific Stabroek Block to inform the nation on how much revenue it has lost due to the lack of a ring-fencing provision.
The prominent anti-corruption activist in his weekly column, published in the Stabroek News, ‘Every Man, Woman and Child in Guyana Must Become Oil-Minded’ compiled a list of 30 questions for EMGL’s Country Manager, Alistair Routledge.
In an invited comment, Ram told Kaieteur News he was forced to raise his concerns with the oil company since the government does not feel it has any obligation to provide Guyanese with answers to the questions that are fundamental to the economy and the country. He said, “Surely they (Exxon) have the resources to enable them to obtain and pass on the answers.”
In his column published on March 29, 2024, Ram asked Routledge to provide an estimate of how much Guyana has lost annually in Profit Oil since 2020, in the absence of ring-fencing.
A ring-fencing provision would require each oil project to pay for itself and allow Guyana to benefit from 50% of all the profits after the cost of the development has been repaid. In the absence of this key provision, ExxonMobil has been using the country’s profits to fund the development of other projects that are yet to commence production activities.
The 2016 Production Sharing Agreement (PSA) allows Exxon to deduct 75% of the country’s oil each month towards cost; the remaining 25% is then split with Guyana as profits. This means that the country’s profit share is significantly reduced to allow for the recovery of costs.
In his 30 questions addressed to the President of ExxonMobil Guyana, Alistair Routledge, the transparency advocate asked Routledge to say whether the current or previous administrations ever formally raised the subject of ring-fencing with the company.
Ram also enquired, “Whether Exxon accepts that the Government of Guyana has the power to set conditions on the granting of a Production Licence, including ring-fencing.”
In his preamble of his column, the Attorney-at-Law reasoned that Routledge entertained a brief interview with Mr. Stephen Sakur, a renowned BBC journalist on Exxon’s operations in Guyana, on the sidelines of the Guyana Energy Conference and Supply Chain Expo.
Ram however noted that the limited nature of the engagement did not allow Sakur the high standard which viewers across the world associate with his flagship programme ‘Hard Talk’. To this end, he challenged the Country Manager to remove some of the more serious suspicions and accusations against the company by providing direct responses to issues in his column.
The Lawyer reasoned, “Mr. Routledge is aware that Exxon will be the dominant player in Guyana for the next forty years or more and is no doubt concerned about the negative image associated with the company and its operations. It is in the interest of Guyanese to have answers to burning questions about the 2016 contract, the company’s operations and the unconscionable situation of a country with a high poverty rate paying the taxes of one of the world’s top companies.”
He added that the Country Manager must also be aware that Guyanese have a right to have their questions and concerns addressed, by those who are enjoying the benefits of the people’s patrimony. “It cannot be too much to ask a major beneficiary of that patrimony to provide responses that will allay the fears of the people,” Ram concluded.
Listen what Ring Fencing means to your foot table!
May 21, 2024
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