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Oil deal requires Govt. to formally write Exxon to request renegotiation – Dr. Adams
…says President Ali, VP Jagdeo cowardly refusing
Kaieteur News- Although the 2016 Production Sharing Agreement (PSA) requires the prior written consent of the Contractor for any amendments, the Government of Guyana (GoG) has cowardly refused to engage the company in dialogue for better benefits for Guyanese.
Former Executive Director of the Environmental Protection Agency (EPA), Dr. Vincent Adams recently pointed out that the talks must commence at the request of government.
Former Executive Director of the EPA, Dr. Vincent Adams (Oil deal requires)
He said, “Why is the Vice President (Bharrat Jagdeo) and the President (Irfaan Ali) making excuses for not asking Exxon about renegotiation? What are they scared about? They are talking that they are gonna renegotiate every contract except for Exxon. The clause is there very clearly that says the only way you can get them to understand that you want them to renegotiate is by putting it in writing. What are they afraid of to put it in writing?”
Article 32 of the PSA states, “Except as may be expressly provided herein, the Government shall not amend, modify, rescind, terminate, declare invalid or unenforceable, require renegotiation of, compel replacement or substitution, or otherwise seek to avoid, alter, or limit this Agreement without the prior written consent of Contractor.”
To this end, Dr. Adams asked, “Is this the kind of leadership that we want in this country who is afraid to even approach an international company to ask for renegotiation for a better deal for its people?”
President Ali during his end-of- year press conference told Kaieteur News that he has no interest in writing to ExxonMobil to seek a renegotiation of the contract. He explained, “No, we don’t need an official response (from Exxon). We have made our position very clear that future PSAs, and we have stuck to that and existing PSAs, the sanctity of contract, we respect that. You know this, we have discussed this, many times before.”
Meanwhile, when the VP was asked to say whether Exxon formally indicated in writing that it does not agree to a renegotiation, he skillfully dodged the issue. Instead, he responded, “As I said before, we’re not dealing with the optics. We’re dealing with substance. If you want to deal with optics, you can ask this question to another party…The AFC and the others can deal with optics. They did that before. They’re the ones who signed the agreement. Now, suddenly they think, oh, we should renegotiate the agreement.”
Stakeholders have argued that due to the drastic changes in the Stabroek Block, Guyana would be well within its right as a sovereign nation to demand greater benefits for its resources. In 2016 when the agreement with ExxonMobil and its partners were made, the country’s oil reserves stood at a just three billion barrels. Fast forward to seven years later, the Stabroek Block is now estimated to hold more than 11.6 billion barrels of oil.
This means that the reserves have almost quadrupled while the country continues to receive a thin slice of the pie, with the oil companies enjoying over 85% of the revenue generated each month. According to the 2016 PSA, Exxon can deduct up to 75% of Guyana’s oil monthly to cover its expenses. The remaining 25% is split with Guyana equally as profits, with the country earning an additional 2% from the contractor’s share as royalty.
(Oil deal requires Govt. to formally write Exxon to request renegotiation – Dr. Adams)
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