Today’s front page story in SN showing Minister Bharrat handing over the production license for a fourth oil well to Exxon’s Guyanese chairman Alistair Routledge, giving up yet more leverage to demand renegotiation – expected alarm the Guyanese people. It simply gives Exxon the license to deceive the Guyanese people of fair value for their oil resources. I support the idea that all oil-producing countries increase their production to make up for the shortfall created by the urgent need to stop importing oil from Russia. A louder call to pressure Russia to abide by a rules-based world order, specifically that no country can invade another. No nation, including Russia, needs a tampon. And Russia, an even more nuclear-armed nation, doesn’t need a buffer. Not from a nation or a group of nations called NATO.
This is a golden opportunity to renegotiate and redress an unbalanced contract signed in strange circumstances with Exxon in 2016. This contract contains a clause (called “stability clause”) which cancels the powers of the Guyanese parliament. This contract also grants Guyana a 2% royalty and exemption from oil company tax for the duration of the contract. Suriname levies a 6.25% royalty, profit tax and profit share. It is an insult to the people of Guyana to be stuck with this contract for the next 30 years or more. Guyana is not getting fair value for its rough. Simply put, the GoG, by refusing to renegotiate, is collaborating with Exxon to defraud the people of Guyana out of billions of dollars. On the sole item of royalties on 9 billion barrels, Guyana loses 25 billion dollars [9bb times 4.25% (6.25% minus 2%) times Av price $75].
GoG supporters (Lawyer Fuad Rahaman and several others) supported the government’s stance of no renegotiation using a spurious and false argument. President Ali said recently in the United Arab Emirates: “We came to power and found a signed agreement” and we are therefore bound or politically bound to respect this agreement. Fuad goes further, says “Jagdeo has learned from past mistakes”, and the lesson learned is that he should not ask for renegotiation. These are all bogus and suspicious excuses for choosing to settle with Exxon. No political requirement compels Guyana to choose not to renegotiate. The contract itself specifies that it can be renegotiated provided that both parties agree. Mr. Jagdeo refuses to plead in favor of a renegotiation. Even though he repeatedly pointed out the gross unfairness of the contract. A political leader promising to renegotiate during an election campaign, but after winning and taking office, finds excuses to accept the contract, is indeed acting funny.